Fiscal Federalism: Sanwo-Olu reacts to northern governors

As the northern governors and their amplifiers continue to hit at the Lagos, Rivers for leading in the push for fiscal federalism in tax collection, Lagos Gov. Babajide Sanwo-Olu who likes to maintain his cool has reacted.

Katsina Gov Bello Masari, weeks ago, decribed the two states as jokers who cannot be as prosperous as they now if the north doesn’t contribute to the two states.

Rivers Gov Nyesom Wike led the rebellion against the federal government agency FIRS collecting VAT in his state, with a bill signed into law to that effect. Sanwo-Olu followed suit.

The FIRS appealed a lower court ruling empowering the states, and the two took it higher.

While the matter has been escalated to the Supreme Court, and the northern governors are rooting for the FIRS , the defender in the case, Sanwo-Olu has renewed a call for another demand.

According to him, the demand—for Review of Revenue Allocation Formula –is self-justifying and never controversial.

Sanwo-Olu stated these in his remarks at the opening of a two-day Southwest Zonal public hearing on the review’

The event was organized by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) in Lagos.

He said the review of the current formula is long-overdue, as the prosperity of Lagos State directly or indirectly has its multiplying effect on the southwest region and on the entire country as a whole.

“The best way to guarantee national progress and development is by paying attention to subnational development because the national is a summation and a reflection of the subnational,’’ he stressed.

Sanwo-Olu re-emphasised the request by Lagos State to be accorded “Special Status’’ in recognition of its huge financial obligations to infrastructure and provision of basic amenities for the increasing population of its residents and its preeminent contribution to national coffers.

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He added it will be unfair to expect Lagos to bear the heavy burden on its own and, therefore, it is necessary to give due consideration to all the variables that support its advocacy for a special status.

“Lagos State was the epicentre for COVID-19, the same way it was for Ebola virus some years ago.

“The management of these unforeseen occurrences come with huge responsibilities and financial commitments on the part of the state government.

He added that the call for Lagos to be accorded special status was not a selfish proposition.

It is in the best interest of the country and all Nigerians for Lagos State, which accounts for about 20 per cent of the GDP and about 10 per cent of the nation’s population to continue to prosper.

Sanwo-Olu stressed that it was in no doubt that Lagos State is the nation’s commercial capital, and population centre.

The governor stated that the level of funding required to service the state’s social and public infrastructure was so significant that it would be difficult for the state to bear the burden for much longer under the present revenue sharing arrangement.

Sanwo-Olu explained that Lagos is more than just another state in the Nigerian federation as there is no tribe in the country that has no significant stake in the state.

He said as the former capital of the country for 77 years (compared to the 28 years that Abuja has been the FCT), Nigeria’s largest metropolis still bears the heavy brunt of being home to all Nigerians, irrespective of age, class, gender, religious affiliation or tribe.

“There are several statistics that show the number of people that come into Lagos every day; there are clear indications that most of these people migrate with the intention to make Lagos their new home and in pursuit of personal dreams the city-state seemingly possesses.

“This portends additional responsibilities on the government.

“Additionally, Lagos still harbours a huge number of federal establishments which could not be moved to Abuja.

“These include military cantonments and barracks, Police, Customs, Immigration, Civil Defence, Prisons, Road Safety and security/intelligence establishments,’’ he said.

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Sanwo-Olu appealed to all stakeholders to approach the review process with open minds and ensure that the right parameters were factored in.

In his address, Chairman RMAFC, Engr. Elias Mbam, lauded Gov. Sanwo-Olu and Lagos State for accepting to host the public hearing.

Mbam said RMAFC began the process of reviewing the subsisting Vertical Revenue Allocation Formula in line with changing realities as the last review was done in 1992.

He enjoined stakeholders to participate actively and effectively as the commission would take all views and recommendations into consideration.