Lagos State seeks special status, wants 1% of Nigeria's revenue

The Lagos State Government is advocating for a 1% share in the federal revenue allocation formula and a special status recognition due to its significant impact on the revenues of the southwestern region and Nigeria as a whole. Sam Egube, the Lagos State Commissioner for Economic Planning and Budget, highlighted the rationale behind this demand in an interview with CNBC Africa. Lagos State, known for its diverse population, economic prowess, and status as Nigeria's commercial capital, plays a crucial role in the country's economy. Egube argued that Lagos should be viewed as a national asset, as its success contributes to Nigeria's overall prosperity. With over 75% of the country's manufacturing capacity, 70% control of the maritime sector, and essential infrastructure such as airports and highways, Lagos shoulders a considerable burden in supporting national interests. Despite generating a substantial amount of corporate income tax and VAT for the country, Lagos faces challenges in infrastructure development and maintenance. The state believes that a special status and additional 1% allocation would alleviate the strain on its resources, ensuring sustainable growth and benefiting the entire nation. The ongoing public hearings by the Revenue Mobilization Allocation and Fiscal Commission to review the allocation formula will determine the feasibility of Lagos State's request. Egube emphasized the importance of fair and equitable distribution of resources, urging all stakeholders to consider Lagos' vital role in Nigeria's economic landscape. He called for a collaborative effort to support Lagos' development and ensure a conducive environment for businesses and residents. The outcome of this request holds immense significance for Lagos and the country at large, with potential implications for economic stability and growth. Considering Lagos' pivotal position in driving economic activities and revenue generation, stakeholders must carefully assess the merits of granting the state's plea for enhanced support and recognition. The value-added tax (VAT) debate between Lagos State and the federal government further underscores the need for clarity and consensus on fiscal matters. As the legal battle unfolds, businesses are caught in a state of uncertainty, unsure of their tax obligations and responsibilities. Egube stressed the constitutional and economic principles guiding VAT distribution, emphasizing the importance of deriving revenues from consumption activities. He highlighted Lagos' significant contribution to VAT collections and the imperative for proper investment in infrastructural development to sustain economic progress. The resolution of the VAT dispute and the decision on Lagos' revenue allocation request will shape the future trajectory of economic governance in Nigeria. As Lagos continues to spearhead economic growth and innovation, its call for fair treatment and enhanced support reflects broader aspirations for a more equitable and prosperous nation. The discussions surrounding these issues are pivotal in defining the path towards sustainable development and inclusive economic growth for Lagos and Nigeria.