Fashola: We Borrow to Fund Infrastructure

Governor Babatunde Fashola

FG, Lagos clash over tax collection from hotels, eateries
Gboyega Akinsanmi  and Tobi Soniyi
Lagos State Governor, Mr. Babatunde Fashola (SAN) Tuesday  linked the on-going light rail mass transit (LRMT) project, which covers a distance of 27.5 kilometres from Marina to Okokomaiko, to the reason  the state borrowed from home and abroad to deliver the critical infrastructure the metropolis requires to function.

He also said the first phase of the light rail (blue line) project, which starts from National Theatre in Iganmu and ends in Orile, would be completed by June in line with a proposed date of completion, which the construction firm, China Civil Engineering Construction Corporation (CCECC) gave the state government.

He made this announcement just as his quest to collect taxes from hospitality and tourist facilities in the state would wait a little longer, as the Supreme Court adjudicating over whether it is the Federal Government or the state government that has the right to collect such taxes, adjourned hearing on the suit to April 23.

Fashola who spoke yesterday while  inspecting some capital projects in the state including the Lagos-Badagry Expressway light rail (blue line) project, student arcade, senate building, law library as well as the central library all in Lagos State University and maternal and child care centres in Igando and Festac Town among others, said his administration was determined to make Lagos live up to the status of a mega city.

The governor inspected the projects along with few members of the State Executive Council including Commissioner for the Environment, Mr. Tunji Bello, and his Information and Strategy counterpart, Mr. Aderemi Ibirogba, among others, saying the state government did not finance overhead expenditure.

“When we borrow money, this (light rail project) is where the money goes. We do not borrow money to run our overhead expenditure. We invest the money we borrowed in this kind of projects. This is what we used the money we borrowed for with a view to providing modern rail system,” Fashola said.

He added that the light rail system was the kind of transportation, which according to him, the country and Lagos megacity “need in the contemporary time contrary to the use of motorcycles” (popularly known as okada) which had been restricted from operating on strategic roads and all bridges in the state.

The governor therefore said the first phase of the project “will be completed by June while work continues towards Okokomaiko and road expansion along the Lagos-Badagry axis progresses. These are two projects embedded together: the light rail (blue line) and Lagos-Badagry road expansion projects.”

He explained that once the first phase “is completed, the state government and the construction firm will see how the National Theatre section of the light rail project will be linked to Marina. But there is still much work to be done. This is what we have been talking about. This is the dream we had long ago.”

He expressed strong determination to deliver critical infrastructure required for Lagos megacity status, citing the case of China which he said, built the world’s fastest train that could travel a distance of 300 kilometres per hour, adding that the same thing “is possible in Lagos metropolis.”

He dropped the hint that the state government was planning to build 1008 flats at Ijora.
According to him, we are already planning to build housing scheme of about 1008 flats at Ijora. People should be able to walk one kilometre to their apartments and houses after alighting from the train.”

He warned the state residents living along the Iganmu-Orile section of the rail project against dumping refuses and wastes on the light rail project sites, urging them to take ownership of the projects, which he said, was executed with the use of their taxes.

And not convinced that the state government should be the one collecting taxes from hotels, eateries, travel agencies etc, the Federal Government has challenged the state’s competence to enact the Hotel Licencing Law Cap H6, 2003; Hotel Licencing (Amendment) Law No 23 Volume 43 of July 20, 2010 and Hotel Occupancy and Restaurant Consumption Law No 30 Volume 42 Lagos State of Nigeria official gazette of June 23, 2009.

In the suit filed pursuant to Order 2 Rule (2), 6(1)(2) and (3) of the Supreme Court as amended 2008, and Section 4(2)(3), item 60 (D) part 1 of the second schedule of the 1999 Constitution, the Federal Government is asking the court to restrain the state from exercising control over tourist and hospitality centres.

The federal government also wants the court to restrain the state from “promulgating , passing into law, enacting or legislating upon issues or any matter relating to the regulation, classification and grading of hotels, motels, guest inn, travel agencies, tour operating outfits, resort, cafeterias, restaurants, fast food outlets and other related tourist establishments and from enforcing in any manner or way through itself or any of its agencies....”

The state in its own originating summons claimed that operators of hotels, motels, fast food and other related tourist businesses are under its control and not that of the federal government.


The summons was filed pursuant to Section 4(2), (3), (4), (6) and 7 of the 1999 Constitution, and order 3 Rule (2), Rule 6(1) and (3) of the Supreme Court Rules.

The state is asking the court to decide whether the legislative competence of the National Assembly and the State Houses of Assembly is not as set out in Section 4 of the Constitution of the Federal Republic of Nigeria 1999.

Lagos also posed the questions: “Having regards to the provisions of Section 4(1)-(4) of the Constitution of the Federal Republic of Nigeria 1999 and the contents of Parts 1 and II of the Second Schedule to the Constitution, whether the legislative competence of the National Assembly is not limited to matters contained in the Exclusive and Concurrent Legislative list

“Whether (if question 2 above is answered in the affirmative), the National Assembly lacks the power to make a law for the regulation of hotels, tourist establishments and hospitality business in any state in Nigeria.

“Whether the provisions of the Nigerian Tourism Development Corporation Act Cap N137 Laws of the Federation of Nigeria 2004to wit: Section 4(2) (c) (d) and the Regulations made there under and Section 7 of the Act purporting to regulate hotels, tourist establishments and hospitality business is unconstitutional and therefore null and void.”

The state asked the Supreme Court to declare that the House of Assembly of Lagos State is the body entitled to the exclusion of any other legislative body, to enact laws with regard to rendering technical advice to the Lagos State and Local Government in the state in the field of tourism and with respect to registration, classification and grading of all hospitality and tourism enterprises in Lagos.

It also asked the court to declare that the provisions of the Nigerian Tourism Development Corporation Act Cap N137 Laws of the Federation of Nigeria 2004 to wit:Section 4(2) (c), (d) and the Regulations made there under and Section 7 of the Act is ultra vires and so the legislative competence of the National Assembly and therefore unconstitutional, null and void.