Deputy Senate President Ike Ekweremadu, who presided, banged the gavel several times for calm.
As the disorder persisted, Ekweremadu sprang up from his seat, pleading for calm.
“A Bill for an Act to make provision for Federal grants to Lagos State in recognition of its strategic socio-economic significance and other connected purposes” was sponsored by Senator Oluremi Tinubu (Lagos Central).
Senator Tinubu meticulously laid out the framework and the spirit behind the bill. She noted that as a city which caters for the welfare of residents and visitors, Lagos is placed under a huge strain that affects its infrastructure.
The proposed legislation attracted unsavory comments from senators who felt Lagos State already had enough to sustain itself.
Three times the bill was put to voice vote and three times it appeared the nay sayers carried the day.
Senator Tinubu said: “Today Lagos serves as the commercial capital of Nigeria and its major nerve centre.
“The strategic importance of Lagos State is inherent in several sectors of the economy.
“Available statistics indicates that six out of 10 international passengers arrive in Lagos. Eight out of 10 depart from Lagos. This shows that Lagos is the window through which visitors travelling in and out of Nigeria leave the country.
“Lagos is home to the major ports that serve Nigeria. It accounts for over 90 percent of all maritime exports. The state delivers much of the funds, charges that go into the coffers of the federal government. It is incontrovertible that Lagos State generates much of Nigeria’s income outside its oil sector.
“According to a Federal Inland Revenue Service (FIRS) report in 2008, 86.2 per cent companies income taxes were collected in Lagos alone while 56.7 per cent Value Added Tax (VAT) was collected in Lagos.
“Key sectors of the economy, namely manufacturing, construction, telecommunications, financial institutions and insurance, are domiciled in Lagos. Lagos also plays a major role as host to sporting, entertainment and cultural events. It is also the home of hospitality, given the numerous hotels and restaurants located within the state.
“Compared with the rest of the country, Lagos has the smallest landmass of about 3,671square kilometer and the highest population density at about 2,649 persons per square kilometer.
“Although the National Population Census, according to its 2006 figures, named Lagos the second most populous state in Nigeria, evidence shows that the state is also the transient state which plays host to millions of transient citizens of other states who commute to Lagos for commercial transactions on a daily basis.
“As a city which caters to the welfare of residents and visitors, Lagos is placed under a huge strain that affects its infrastructure and welfare implications for residents and transient citizens of other states in Nigeria.
“Many Nigerians travelling to Lagos experience traffic congestion because of pressure on the road.
“Other problems faced in Lagos include overcrowding, emergence of slumps, over stretched healthcare facilities, decreased productivity because of hours lost in traffic, environmental challenges.
“It is obvious that Lagos State has been left to deal with these pressures on its own at huge cost… “
She went on: “Irrespective of its contributions to the economy, Lagos receives statutory allocations like other states. These often translate into meagre sums when compared with other states generating oil sector revenue.
“The bill aims to remedy the remaining problems faced by residents and visitors in Lagos by empowering the federal government to make provisions for economic assistance through grants as provided for under section 164 sub-section (1) of the 1999 Constitution as amended.
“The bill allows the grants payable to be determined by the President and Commander-in-Chief on the recommendation of the Governor of Lagos State with the proviso that recommends the modest amount not less than 1 percent of the share of the revenue accruing to the federal government. The amount is payable upon appropriation by the National Assembly.
“This grants will be utilised in meeting the public infrastructural need of Lagos State. For example, improving on rail infrastructure to decongest the roads and for promotion of the conducive social economic environment for federal institutions as well as increase the State’s capacity to continue to play host.
“The bill also establishes a joint committee host members both the President and the Governor of Lagos State appoints. The committee will present an annual report to the president for information outlined in the bill.
Distinguished colleagues, this bill definitely has financial implications. The compendium shows what the financial implication that is the recommended one per cent of the share of the revenue accruing to the Federal Government is attached.
“I urge you to support this bill because Lagos is our collective heritage whether we live in it as residents or pass through as visitors.
“We would all benefit from investments in infrastructural development and perhaps like the former capital of the republic of Germany, Lagos is service to many international agencies that will utilise her former federal duties.”
Senators Gbenga Ashafa (Lagos East), Solomon Adeola (Lagos West), Barnabas Gemade (Benue North East) Fatima Raji-Rasaki (Ekiti Central) Olusola Adeyeye (Osun Central), supported the bill.
Senators Aliyu Wamakko (Sokoto North), Hope Uzodinma (Imo West) Abdullahi Adamu (Nasarawa West), James Manager (Delta South) opposed the bill.
Ashafa described the bill as “most important” and urged his colleagues to be sympathetic to the cause of Lagos State.
He noted that over 95 per cent of the lawmakers have one form of link or the other to Lagos, adding that what happens in Lagos affects the country.
“The bill is asking for just one per cent of Federal Government allocation for building of roads and other infrastructure,” Ashafa said.
Adeola noted that the bill is seeking special assistance for Lagos State, adding that “any assistance for Lagos, every Nigerian will benefit from it.”
The Lagos West lawmaker said that what they were asking for is for the residents of Lagos State, including Igbo, Hausa, Yoruba and others.
He recalled that when New York ceased to be the capital of the United States, the city was not abandoned by the US government.
He said: “ I want to plead that the bill be allowed to go for second reading at which stage issues involved will be addressed adequately.”
Gemade said it was normal for parliamentarians to seek for special grants for their constituencies.
He posited that “the bill is certainly not out of place as proposed, especially when the federal government controls large proportion of the federal revenue.
Gemade added that the bill became even more necessary when it is recognised that there are no institutions left for states to generate revenue for their upkeep.
He said: “ Supposing the Nigeria Ports Authority (NPA) is an institution that Lagos city is running, Lagos would have been making some revenue from it.”
To Senator Raji-Rasaki, the bill is long overdue and seeks to give to Lagos what is due to it.
The Ekiti Central lawmaker insisted that it is wrong to treat Lagos like every other state without considering its contributions to the wellbeing of the country.
But Senator Wamakko who flatly opposed the bill, said that its timing was wrong.
The Sokoto North lawmaker said that the bill could not pass when many states could not pay worker.
Senator Gershom Bassey (Cross River South) said that for the bill to pass, Calabar, the Cross River capital – should also be considered for special grants. Senator Hope Uzodinma (Imo West) contended that the criteria given for the passage of the bill were wrong.
Senator Philip Aduda (FCT) said he would support the bill only on the condition that the Federal Capital Territory (FCT) would receive the same consideration.
Senator Abdullahi Adamu cited constitutional impediments to the bill and concluded that the National Assembly lacked the jurisdiction to make a law on how money should be removed from federal government allocations.
He said: “ The Federal Government can give grants to states but the bill is talking about a certain percentage to be given to Lagos State from federal revenue.”
Senator James Manager said that though the bill is good and appealing, “the constitution prescribed how grants should be given to states.”
The Delta South lawmaker particularly cited Section 164(1) that stipulates how grants should be given to states by the Federal Government.
Senator Adeyeye also supported the bill but said that the same Section cited by Senator Manager should be looked into.
Tension rose when Adeyeye insisted that just like in the case of oil producing areas that receive 13 per cent derivation, 13 per cent derivation should be set aside for revenue collected from VAT.
The Osun Central lawmaker also underscored the need for the country to implement full scale fiscal federalism as the way out of financial difficulties being experienced by states.
When he described the FCT as “a rotten pampered child”, there was uproar in the chamber.
The Senator representing FCT, Senator Aduda, particularly, took offence over the reference to FCT as a “rotten pampered child’ and sought that Adeyeye withdraw the reference.
Even when Adeyeye prompt withdrew the comment, the withdrawal did not pacify some senators.
Adeyeye said: “I rise to support most of this bill and to oppose an aspect of it. And the aspect I oppose is the same aspect that James Manager attempted to highlight. But in doing so, I want to point out that they are doing so because I don’t even believe that one percent is enough for Lagos.
“I think what we need to do is to be fair to every part of this country and to say that we must not kill the goose that lays the golden egg.
“We have already from Independence and subsequent alteration to the Constitution, what he has referred to as grundnorms, in which we say whatever revenue you get from oil by the principles of derivation, a certain percentage must belong to that community.
“By the same token, whatever you get from VAT, a certain percentage should belong to that community. We have among us a governor who made a law that banned the consumption of alcohol. That’s what the people want. I supported it. He has the right to make the law. However, if my own people consume alcohol and pay VAT on it, he should not take a penny of what my people have for VAT on alcohol.
“In Lagos, all of us pay tax. And all of these VAT is taken to Abuja. What we need to do is to say whatever is good for the goose is good for the gander. If it’s 13 percent for Delta, Bayelsa, Rivers for oil, let it also be 13 percent to Lagos for the VAT paid there.
“Mr. President, you led us to Washington DC on fiscal federalism. We were told that when we see federal roads in the US, it’s federal only in name. It’s federal only because the Federal Government of the US provides 80 percent of the money and the state government provides 20 percent. But all of the money is given to the Federal Government on that road. Until we have fiscal federalism, Lagos will not work, Calabar will not work, the FCT will not work. By the way, the FCT is a rotten pampered child.”
At this stage, there was uproar in the chamber.
Some northern senators were particularly irked that Adeyeye spoke about states withholding VAT raised in their states.
Ekweremadu intervened and asked Adeyeye to withdraw the comment on FCT.
Adeyeye said: “I have already withdrawn it. Mr. FCT (referring to Aduda) I’ve withdrawn it. Having withdrawn it and having been forgiven by my brother Phillip, my friend, an apology is an apology.”
But The rowdiness in the chamber persisted.
It appeared Senator Aduda, who apparently felt injured by the contributions of Senator Adeyeye, especially the reference to FCT as “rotten pampered child”, was ready to fight Adeyeye.
Aduda sprang up from his seat but was prevailed upon by his colleagues.
Adeyeye continued: “My point remains that for everyone who lives in a house in Lagos, you pay tax. Abuja we don’t pay tax and therefore the FCT is being subsidised by the Federal Government. That must end! I won’t apologise for that. The FCT is not paying sufficient tax.”
There was loud murmuring.
Amid the ensuing confusion, Ekweremadu said: “Now, we will put the question. Distinguished colleagues, those in support this bill be read the second time say aye.”
After three times of putting the question, it was obvious that the majority were against the bill.
Ekweremadu ruled that the “nay” had it.