On Monday, at the opening of a 2-day South-West zonal public hearing on the review of revenue allocation formula organized by the Revenue Mobilization Allocation and Fiscal Commission (RMAFC), Babajide Sanwo-Olu, Lagos State Governor, demanded special status recognition for the state.
By special status recognition, the governor made a case to receive 1% of the federation revenue allocation for the infrastructural development of the state.
He was quoted saying “the call for a special status for Lagos is not a selfish proposition; it is in the best interest of the country and all Nigerians, for Lagos which accounts for about 20 percent of the national GDP and about 10 percent of the nation’s population to continue to prosper.”
Mr Sanwo-Olu’s formula for FAAC distribution proposed that henceforth,
- 34 percent should go to the federal government (the allocation of the federal government will include 1% to the Federal Capital Territory).
- 42% should go to all the 36 states of the Federation
- 23% should go to all the 774 local government councils spread across the states
- and the remaining 1% should be for Lagos state (Special status).
This proposal is calling for a review of the current allocation formula where the federal government gets 52.68 percent, state governments get 26.72 percent and Local government councils get 20.6 percent.
The main justification provided by the governor is the population of Lagos state. At the moment Lagos state’s population is estimated as 14.9 million for 2021. This is an increase from 14.4million in 2020 and 13.9million in 2019. The population of the state is projected to double by 2050, the plan of the state for a mega-city may become more pronounced with more population.
Due to the increasing population, problems such as transportation, sewage among others have continued to pose immense challenges. The request is built around meeting the infrastructural deficit confronting the state.
What N47.9 billion could mean as infrastructure for Lagosians
If the demand of the state is approved by the committee for review of FAAC allocation, it would mean Lagos will get 1% and get a share of allocation given to states from the federal revenue every month.
Hypothetically and in simpler terms, it would mean, 1 naira out of every 100 naira generated by the Nigerian governments is proposed to be given to Lagos state residents under a special status recognition.
Working with the total FAAC distributed in 2020, the 36 states and the Federal government received N2.30 trillion and N2.49 trillion respectively. Using the FAAC figure (N4.79 trillion) to estimate Lagos’ demand, it would mean an extra N47.9 billion for Lagos State as 1% special status fund.
3,193 4-Bedroom Housing Units/Year
Although, there is no official figure to the actual number of housing deficits faced by Lagos, the 1% special fund at a nominal value of N47.9 billion, could help the state provide 7000 4-bedroom apartment low-cost housing units in 2-years and two months at the rate of 15million per unit.
N47.9billion can provide 3,193 4-bedroom bungalow housing units per year in Lagos state at a cost of N15 million per housing unit. The Nigerian infopedia noted that excluding the land (which the state government will not pay for), a four-bedroom bungalow can be built with 15million naira.
The Lagos State Commissioner for Housing, Moruf Akinderu-Fatai had noted that there are efforts to provide 7000 low-cost housing units to ease the housing problems faced in Lagos.
The state says it intends to subsidize the cost of these homes especially for the low-income earners while spreading the eventual subsidized rate over many years.
2,177 Primary Health Centres/Year
According to Africacheck, it costs between N18 million to N22 million to build a Primary Health centre that can attend to an area with a population of 500 persons. Going by this figure, N47.9 billion can be used to build two thousand one hundred and seventy-seven (2177) Primary Health Centres in the state at a cost of 22million naira per primary health centre. This will boost access to healthcare in the state.
The benchmark for construction of Asphalt road per KM is put at N238m by the world bank. Using this world bank benchmark, it would mean N47.9bn can construct 201.KM of Asphalt roads in Lagos state annually.
180 Model Schools
In 2017, the Lagos state government noted that it spent N2.4 billion on 9 new school buildings. Factoring in inflation which was at 16.52% in 2017 and currently 15.97% in 2021 (difference of 0.55%), the same figures can be used considerably.
With this, N47.9 billion can build 180 schools at the rate of N266 million per school. This will go a long way in helping the state tackle deficit of schools to cater for its teeming population.
N 500,000 Loan To 95,800 Lagos Entrepreneurs or N50,000 Loan To 958,000 Traders
The Lagos state employment trust fund gives loan of up to five hundred thousand naira (500,000naira) to business owners operating in Lagos state. The Initiative of Lagos state employment trust fund targets the creation of wealth by supporting entrepreneurs.
N47.9 billion would give another 95,800 Lagos entrepreneurs an opportunity to such business loans. Each beneficiary will be able to receive 500,000 naira.
If the loan is to be given at 50,000 Naira each which is the minimum amount given by the trust fund, N47.9 billion will enable 958,000 traders access the loan.
Fourth Mainland Bridge
The Lagos state government put the construction of Lagos fourth mainland bridge at N1.027trillion naira ($2.5billion) estimate. This would mean N47.9 billion can contribute 4.8% of the total project money on an annual basis.
Although the state did not specify how long the project construction which begins later this year will last, the contribution of the 1% special status funding to the fourth mainland bridge will increase by 4.8% on a year-on-year basis. This simply means, N47.9 billion will contribute 19.2% to the project if it(fourth mainland bridge construction project) lasts for four years.
The fourth mainland bridge is expected to boost commercial activities in the state and ensure better connectivity in the state.
‘Lagos request for Special Status, not today’
In 2016, the Nigerian Senate rejected proposals to grant Lagos a special status, the bill to grant Lagos a special status was titled “A bill for an act to make provisions for federal grants to Lagos state in recognition of its strategic socio-economic significance and other connected purposes”, it was sponsored by Senator Oluremi Tinubu.
Three years before the Senate rejection, on June 5, 2013, the deputy Senate President, Ike Ekweremadu-led Senate Ad-hoc Committee on constitution review, in its report, ruled out special status for Lagos.
The committee said; “On special status for Lagos, while the committee appreciates the peculiar needs and challenges, it is our considered opinion that according such special status should be a matter of political decision, which should be kept out of the constitution”
In July, the Lagos State Government announced a plan to transform the state into a 21st-century economy built on rapid infrastructural development and the provision of economic opportunities for teeming residents.
Already, Governor Sanwo-Olu mentioned that the call for special status was recognition of its huge financial commitment to infrastructure.