The Lagos special status bill

ON Wednesday, October 5, 2016, the Senate, for the second time in three years, rejected proposals to grant Lagos a special status or secure a special federal grant for the state. During deliberations on a bill sponsored by Oluremi Tinubu, an All Progressives Congress (APC) senator representing Lagos Central, for an Act to make provisions for federal grants to Lagos State in recognition of its strategic socio-economic significance, the Senate Chambers was thrown into a rowdy session.

A similar bill was first presented to the seventh Senate, but the lawmakers turned it down at the committee stage. On June 5, 2013, the Senate Ad-hoc Committee on Constitution Review, in its report, noted that “while it appreciates the peculiar needs and challenges of Lagos, it is our considered opinion that such special status should be a matter of political decision, which should be kept out of the Constitution.”

The latest bill, which was in its second reading, had sought to secure one per cent of federal allocations to Lagos. The grant, according to Senator Tinubu, would enable the state to handle the heavy burden of humanitarian and socioeconomic challenges arising from its situation as the nation’s former capital. Proponents of the bill tried to justify the need to provide a special grant to Lagos by citing its huge tax contribution to the federation. They further argued that where this is  not done, the principle of derivation should be extended to the value added tax and so on, for which Lagos contributes a relatively significant amount to the Federation Account.

Those opposed to the move maintained that Lagos is not the only former federal capital, and so such a special grant could not be given to it alone.  If it is to be considered, it should be extended to Calabar  and the current Federal Capital Territory, Abuja. Still, some senators considered the bill untimely.  According to this reasoning, the bill fails to recognise the situation of states that are finding it difficult to pay salaries. Putting additional burden on the central pool, they argued, would make the already poor states poorer.

It is unfortunate that the bill’s very important proposals are flaring tempers and have failed twice. This was not inevitable. Indeed, the proposals have very clear justifications. Federal intervention in Lagos stands to benefit all segments of the Nigerian population. This is the basis for which the proposals should have been sold in the first place.  It is indeed curious that such a bill is presented as if the case for federal grant is another move to get a cut from the controversial federation pool that has been underlined by free riding. The bill is more national development oriented than the parochial argument that is apparent to those who have so far opposed it.

In the first place, the idea of a special grant for Lagos is not hinged on its status as a former capital, but on its current status as Nigeria’s commercial capital of Nigeria. It is Nigeria’s quintessential global city and pivot of growth. While developing Lagos will be directly beneficial to all states since they have indigenes permanently residing in Lagos, the more important argument is that Lagos as a pivotal city will catalyze development in other cities across the country.

Researchers have observed a historical trend from the developed, industrialised countries suggesting that growth and development start from points of accumulation and concentration within a geographic area called growth poles.  Growth poles have the potential of giving birth to or enhancing other centers of accumulation and concentration. The process is seen as a natural progression in the urbanisation process, where relative growth in a country’s urban population is accompanied by an even faster increase in the economic, political, and cultural importance of cities.

Pivotal cities are the engines of growth for an economy because they are dense interactive locations where knowledge is exchanged, innovations spurred, and sophisticated skills developed. Thus, it is important to ensure that such cities are equipped with infrastructure and strong institutions to enable them to realize their potential. Free standing, transparent legal system to enforce contracts, a transparent, competitive financial sector including open securities markets, transparent accounting practices, and credit rating systems enable the cities to compete for international business that will benefit the entire country.

Apart from its economic and cultural dynamism as Nigeria’s pivotal city, Lagos has peculiarly high problems of urbanisation. If these challenges are solved in Lagos, the experience will make it easier to deal with similar, less complicated challenges elsewhere in the country. Environmental problems, traffic congestions, slums and poverty are challenges that Lagos bear in utmost complexity, and solving these problems in this most challenging context will provide an opportunity  for the nation to learn. It will not only enable Lagos to play its pivotal role, the experience will render similar problems less challenging in other parts of the country.

However, the real issue with the bill is not its desirability, but the way and manner it has been handled.  Proponents of the bill must demonstrate its benefits to the rest of the country. Nigeria’s revenue arrangement, one of the most contentious issues in its federal politics, must be recognised as informing the reactions to the proposal for a special grant.  We call on the proponents of the bill to go back to the drawing board with a view to re-presenting it at the next opportunity. A special grant for Lagos is in the overall interest of Nigeria.