₦airaland Forum

How the North’s Fiscal Freeloading Keeps Nigeria in the Economic Dark Age’s

Oh, bravo, President Tinubu, for once again proving that in Nigeria, politics trumps progress, and the loud whining of regional power blocs can drown out any semblance of economic rationality. Your decision to slash the VAT revenue-sharing formula from a bold 60% derivation-based allocation to a measly 30%—all to appease the northern states’ tantrum over their self-inflicted revenue woes—is a masterclass in spineless governance. Why strive for a transformative tax system when you can just cave to the same old regional blackmail that’s kept Nigeria’s economy limping since independence? Truly, a visionary move for a man eyeing 2027’s ballot box.

Let’s dissect this farce. The northern states, clutching their pearls over the prospect of losing VAT revenue due to their “limited industrial base,” have once again weaponized their political clout to preserve a fiscal status quo that’s as outdated as a rotary phone. Their argument? “We don’t generate much VAT because we’re not Lagos or Rivers, so don’t you dare cut our slice of the federal pie!” Never mind that Lagos alone accounts for over 50% of Nigeria’s VAT while some northern states contribute less than a rounding error. This isn’t a new script; it’s a tired rerun of Nigeria’s post-independence saga, where the North’s overreliance on federal handouts has consistently choked economic innovation and kept the country tethered to mediocrity.

Historical Context: The North’s Economic Albatross

Since Nigeria’s independence in 1960, the economic imbalance between the North and South has been a festering wound, and the North’s dependence on federal allocations is the gangrene. The South, with its coastal ports, oil wealth, and commercial hubs like Lagos and Port Harcourt, has always been the economic engine. Lagos, for instance, was generating significant internal revenue even in the 1960s through trade and commerce, while the North leaned heavily on groundnut pyramids and colonial-era administrative structures. When oil became Nigeria’s golden goose in the 1970s, the federal allocation system—cemented under military regimes like Gowon’s and Buhari’s—turned into a sacred cow. States, especially in the North, grew addicted to monthly payouts from the Federation Account, with little incentive to build their own revenue bases.

Take the Groundnut Pyramids of Kano, once a symbol of northern agricultural prowess in the 1950s and 1960s. By the 1980s, they were a distant memory, collapsed under the weight of mismanagement, corruption, and a refusal to modernize agriculture. Instead of pivoting to industrialize or diversify, northern elites doubled down on federal oil rents, using their population size and political leverage to secure disproportionate shares. The 1976 creation of states under Murtala Mohammed’s regime, which gave the North more states than the South, entrenched this imbalance. More states meant more federal allocations, regardless of economic output. By 1999, when Nigeria returned to democracy, northern states were still leaning on federal funds, while Lagos, under Tinubu himself as governor, was revolutionizing its tax system to generate over ₦10 billion annually by 2007 without begging Abuja.

The North’s economic inertia isn’t just about geography; it’s a mindset. Policies favoring centralized control—like the Petroleum Profits Tax Act of 1959, which funneled oil revenue to the federal government rather than producing states—were championed by northern leaders like Ahmadu Bello, who prioritized national unity over regional self-reliance. Fast forward to the 1980s and 1990s, and Structural Adjustment Programs (SAPs) under Babangida devastated northern textile industries, like those in Kaduna, because the region failed to adapt to global competition. Meanwhile, southern states, particularly Lagos, embraced private-sector growth, attracting multinationals and building infrastructure. The result? By 2025, Lagos’s IGR is over ₦1 trillion annually, while states like Yobe or Zamfara barely scrape together ₦20 billion.

Tinubu’s Capitulation: A Betrayal of Progress

Now, enter Tinubu’s tax reforms, which could have been a game-changer. The original 60% VAT derivation formula was a nod to fairness: reward states that actually drive economic activity. Lagos, Rivers, and Ogun, which together generate over 70% of VAT, would finally get their due, incentivizing others to step up. But no, the northern governors and their Senate allies threw a fit, crying “regional inequality” as if their decades of economic lethargy aren’t the real culprit. And Tinubu, the supposed “Lagos miracle worker,” folded like a cheap suit. Reducing the derivation share to 30% isn’t a compromise; it’s a surrender to the same parasitic fiscal culture that’s kept Nigeria’s tax-to-GDP ratio at a pathetic 13.5%, lower than Ghana’s 15% or Kenya’s 18%.

Why did he cave? Oh, let’s not pretend it’s anything but 2027 election math. The North’s voting power, with its 19 states and inflated population figures, is the ultimate trump card. Tinubu knows he can’t win without northern votes, so he’s traded economic reform for political survival. Never mind that this perpetuates a system where states like Kano or Kaduna, with vast agricultural potential and millions of consumers, contribute peanuts to VAT because they’ve refused to modernize or attract investment. Instead of challenging them to innovate, Tinubu’s handing them a lifeline to keep coasting on federal crumbs. Truly, a bold strategy for a man who once turned Lagos into Africa’s fifth-largest economy.

The North’s Ultra-Conservative Economic Mindset

And let’s talk about the North’s economic philosophy—or lack thereof. Their insistence on preserving federal allocations over derivation reeks of an ultra-conservative mindset that would feel right at home in Niger or Chad, where economies limp along on subsistence agriculture and foreign aid. Why bother with pesky things like industrial policy, tech hubs, or tax reform when you can just demand a bigger slice of someone else’s pie? Kano, with its centuries-old trading history, could be a logistics powerhouse, yet its markets are stuck in the 19th century. Kaduna, once a textile giant, hasn’t recovered from the 1980s because its leaders prefer lamenting “marginalization” to building factories. Compare this to Rwanda, a landlocked, resource-poor country that’s tripled its GDP per capita since 2000 through aggressive innovation and governance reforms. But no, Nigeria’s North seems content playing the victim, clutching federal allocations like a security blanket while the South sweats to keep the nation afloat.

The Cost of Inaction

This compromise isn’t just a policy misstep; it’s a betrayal of Nigeria’s economic potential. By caving to northern pressure, Tinubu’s ensuring that states have little incentive to innovate. Why should Borno or Jigawa invest in industrial parks when they can coast on VAT from Lagos’s ports? The 30% derivation formula is a half-hearted gesture that won’t push laggard states to compete, nor will it fully reward high-performers like Lagos, which now subsidizes the nation while grappling with overstretched infrastructure. The tax-to-GDP target of 18% by 2026? Good luck achieving that when half the country’s states are incentivized to do nothing.

And let’s not kid ourselves: this isn’t about “equity.” It’s about entrenching a system where political clout trumps economic merit. The North’s fear of revenue loss isn’t a cry for fairness; it’s a refusal to confront their own failures. If they want equity, how about taxing their vast untapped agricultural wealth or formalizing their informal economies? Oh, but that might require actual work, and why bother when you can just bully Abuja into submission?

Conclusion

Tinubu’s VAT formula retreat is a cowardly capitulation to a region that’s held Nigeria’s economy hostage for decades. The North’s overreliance on federal allocations isn’t a quirk; it’s a deliberate choice to prioritize political power over economic innovation, a pattern etched into Nigeria’s history from the groundnut pyramids’ collapse to the textile industry’s demise. By bowing to their pressure, Tinubu’s not just undermining his own reforms; he’s ensuring Nigeria remains a country where mediocrity is rewarded, and ambition is punished. Perhaps the northern governors should take their economic playbook to Niamey or N’Djamena, where it might fit better. As for Nigeria? Don’t hold your breath for that 18% tax-to-GDP ratio—or any real progress—anytime soon.

FreeThinker from Pluto

The thing pain people who hate to see Nigeria progress. The tax bill they said will not be passed was finally passed. All these epistles are just a charade. The tax bill has been passed and we celebrate the progress.

Congratulations to Nigeria. We are getting there. Anybody that want to cry should keep crying, na them get the water for eye.

You think it is easy to pass a bill that favors your region more than the other regions? Ask Buhari and his RUGA bill that was trashed in the waste bin because the South was against it. The North was against TINUBU on this bill and yet it was passed in less than 2 years. NA PLAY?

immaculatesense:
The thing pain people who hate to see Nigeria progress. The tax bill they said will not be passed was finally passed. All these epistles are just a charade. The tax bill has been passed and we celebrate the progress.

Congratulations to Nigeria. We are getting there. Anybody that want to cry should keep crying, na them get the water for eye.

You think it is easy to pass a bill that favors your region more than the other regions? Ask Buhari and his RUGA bill that was trashed in the waste bin because the South was against it. The North was against TINUBU on this bill and yet it was passed in less than 2 years. NA PLAY?

Congrats on passing a bill that ensures lazy states keep getting paid for doing nothing. Bravo! If that’s your idea of “progress,” no wonder Rwanda is leaving us behind while we’re here clapping for crumbs.

And comparing this to Buhari’s RUGA? Please. At least that one didn’t pretend to be economic reform.

Carry on. Nigeria is definitely getting somewhere—just not forward.

FreeThinker from Pluto

immaculatesense:
The thing pain people who hate to see Nigeria progress. The tax bill they said will not be passed was finally passed. All these epistles are just a charade. The tax bill has been passed and we celebrate the progress.

Congratulations to Nigeria. We are getting there. Anybody that want to cry should keep crying, na them get the water for eye.

You think it is easy to pass a bill that favors your region more than the other regions? Ask Buhari and his RUGA bill that was trashed in the waste bin because the South was against it. The North was against TINUBU on this bill and yet it was passed in less than 2 years. NA PLAY?

The Igbos said the bill won't go through because the north was against it. Igbos were really happy when the north was against the bill, they supported northern politicians in opposing the bill

FreeThinkerPlut:
Congrats on passing a bill that ensures lazy states keep getting paid for doing nothing.

A lot of Igbos were against the bill because northerners didn't support the sharing formula. Obidients were even jubilating because northerners were against the bill.

Well, it's better the derivation was reduce instead of totally canceling it. A win-win situation

Ikaeniyan0:
The Igbos said the bill won't go through because the north was against it. Igbos were really happy when the north was against the bill, they supported northern politicians in opposing the bill

And I remember a northerner here boasting that the bill will never be passed as it is but you Yorubas were boasting that they have met their match in BAT!

You didn't even read the post before commenting anyway.

FreeThinkerPlut:
How the North’s Fiscal Freeloading Keeps Nigeria in the Economic Dark Age’s

Oh, bravo, President Tinubu, for once again proving that in Nigeria, politics trumps progress, and the loud whining of regional power blocs can drown out any semblance of economic rationality. Your decision to slash the VAT revenue-sharing formula from a bold 60% derivation-based allocation to a measly 30%—all to appease the northern states’ tantrum over their self-inflicted revenue woes—is a masterclass in spineless governance. Why strive for a transformative tax system when you can just cave to the same old regional blackmail that’s kept Nigeria’s economy limping since independence? Truly, a visionary move for a man eyeing 2027’s ballot box.

Let’s dissect this farce. The northern states, clutching their pearls over the prospect of losing VAT revenue due to their “limited industrial base,” have once again weaponized their political clout to preserve a fiscal status quo that’s as outdated as a rotary phone. Their argument? “We don’t generate much VAT because we’re not Lagos or Rivers, so don’t you dare cut our slice of the federal pie!” Never mind that Lagos alone accounts for over 50% of Nigeria’s VAT while some northern states contribute less than a rounding error. This isn’t a new script; it’s a tired rerun of Nigeria’s post-independence saga, where the North’s overreliance on federal handouts has consistently choked economic innovation and kept the country tethered to mediocrity.

Historical Context: The North’s Economic Albatross

Since Nigeria’s independence in 1960, the economic imbalance between the North and South has been a festering wound, and the North’s dependence on federal allocations is the gangrene. The South, with its coastal ports, oil wealth, and commercial hubs like Lagos and Port Harcourt, has always been the economic engine. Lagos, for instance, was generating significant internal revenue even in the 1960s through trade and commerce, while the North leaned heavily on groundnut pyramids and colonial-era administrative structures. When oil became Nigeria’s golden goose in the 1970s, the federal allocation system—cemented under military regimes like Gowon’s and Buhari’s—turned into a sacred cow. States, especially in the North, grew addicted to monthly payouts from the Federation Account, with little incentive to build their own revenue bases.

Take the Groundnut Pyramids of Kano, once a symbol of northern agricultural prowess in the 1950s and 1960s. By the 1980s, they were a distant memory, collapsed under the weight of mismanagement, corruption, and a refusal to modernize agriculture. Instead of pivoting to industrialize or diversify, northern elites doubled down on federal oil rents, using their population size and political leverage to secure disproportionate shares. The 1976 creation of states under Murtala Mohammed’s regime, which gave the North more states than the South, entrenched this imbalance. More states meant more federal allocations, regardless of economic output. By 1999, when Nigeria returned to democracy, northern states were still leaning on federal funds, while Lagos, under Tinubu himself as governor, was revolutionizing its tax system to generate over ₦10 billion annually by 2007 without begging Abuja.

The North’s economic inertia isn’t just about geography; it’s a mindset. Policies favoring centralized control—like the Petroleum Profits Tax Act of 1959, which funneled oil revenue to the federal government rather than producing states—were championed by northern leaders like Ahmadu Bello, who prioritized national unity over regional self-reliance. Fast forward to the 1980s and 1990s, and Structural Adjustment Programs (SAPs) under Babangida devastated northern textile industries, like those in Kaduna, because the region failed to adapt to global competition. Meanwhile, southern states, particularly Lagos, embraced private-sector growth, attracting multinationals and building infrastructure. The result? By 2025, Lagos’s IGR is over ₦1 trillion annually, while states like Yobe or Zamfara barely scrape together ₦20 billion.

Tinubu’s Capitulation: A Betrayal of Progress

Now, enter Tinubu’s tax reforms, which could have been a game-changer. The original 60% VAT derivation formula was a nod to fairness: reward states that actually drive economic activity. Lagos, Rivers, and Ogun, which together generate over 70% of VAT, would finally get their due, incentivizing others to step up. But no, the northern governors and their Senate allies threw a fit, crying “regional inequality” as if their decades of economic lethargy aren’t the real culprit. And Tinubu, the supposed “Lagos miracle worker,” folded like a cheap suit. Reducing the derivation share to 30% isn’t a compromise; it’s a surrender to the same parasitic fiscal culture that’s kept Nigeria’s tax-to-GDP ratio at a pathetic 13.5%, lower than Ghana’s 15% or Kenya’s 18%.

Why did he cave? Oh, let’s not pretend it’s anything but 2027 election math. The North’s voting power, with its 19 states and inflated population figures, is the ultimate trump card. Tinubu knows he can’t win without northern votes, so he’s traded economic reform for political survival. Never mind that this perpetuates a system where states like Kano or Kaduna, with vast agricultural potential and millions of consumers, contribute peanuts to VAT because they’ve refused to modernize or attract investment. Instead of challenging them to innovate, Tinubu’s handing them a lifeline to keep coasting on federal crumbs. Truly, a bold strategy for a man who once turned Lagos into Africa’s fifth-largest economy.

The North’s Ultra-Conservative Economic Mindset

And let’s talk about the North’s economic philosophy—or lack thereof. Their insistence on preserving federal allocations over derivation reeks of an ultra-conservative mindset that would feel right at home in Niger or Chad, where economies limp along on subsistence agriculture and foreign aid. Why bother with pesky things like industrial policy, tech hubs, or tax reform when you can just demand a bigger slice of someone else’s pie? Kano, with its centuries-old trading history, could be a logistics powerhouse, yet its markets are stuck in the 19th century. Kaduna, once a textile giant, hasn’t recovered from the 1980s because its leaders prefer lamenting “marginalization” to building factories. Compare this to Rwanda, a landlocked, resource-poor country that’s tripled its GDP per capita since 2000 through aggressive innovation and governance reforms. But no, Nigeria’s North seems content playing the victim, clutching federal allocations like a security blanket while the South sweats to keep the nation afloat.

The Cost of Inaction

This compromise isn’t just a policy misstep; it’s a betrayal of Nigeria’s economic potential. By caving to northern pressure, Tinubu’s ensuring that states have little incentive to innovate. Why should Borno or Jigawa invest in industrial parks when they can coast on VAT from Lagos’s ports? The 30% derivation formula is a half-hearted gesture that won’t push laggard states to compete, nor will it fully reward high-performers like Lagos, which now subsidizes the nation while grappling with overstretched infrastructure. The tax-to-GDP target of 18% by 2026? Good luck achieving that when half the country’s states are incentivized to do nothing.

And let’s not kid ourselves: this isn’t about “equity.” It’s about entrenching a system where political clout trumps economic merit. The North’s fear of revenue loss isn’t a cry for fairness; it’s a refusal to confront their own failures. If they want equity, how about taxing their vast untapped agricultural wealth or formalizing their informal economies? Oh, but that might require actual work, and why bother when you can just bully Abuja into submission?

Conclusion

Tinubu’s VAT formula retreat is a cowardly capitulation to a region that’s held Nigeria’s economy hostage for decades. The North’s overreliance on federal allocations isn’t a quirk; it’s a deliberate choice to prioritize political power over economic innovation, a pattern etched into Nigeria’s history from the groundnut pyramids’ collapse to the textile industry’s demise. By bowing to their pressure, Tinubu’s not just undermining his own reforms; he’s ensuring Nigeria remains a country where mediocrity is rewarded, and ambition is punished. Perhaps the northern governors should take their economic playbook to Niamey or N’Djamena, where it might fit better. As for Nigeria? Don’t hold your breath for that 18% tax-to-GDP ratio—or any real progress—anytime soon.

FreeThinker from Pluto

Yet the 3 Northern regions contributes more VAT than the SE and receives less as a percentage of their VAT contribution than the SE.

But this mumu is here, making the VAT issue about the North.

President Tinubu has achieved an historical legislative victory by passing and initiating the first major reform in taxation since the formation of Nigeria, but your blind eyes and bitter heart won't see that.

Its all about the North as far as you are concerned.

Ikaeniyan0:
The Igbos said the bill won't go through because the north was against it. Igbos were really happy when the north was against the bill, they supported northern politicians in opposing the bill

there's no sane igbo who supported the north being against the bill which is an advantage to them especially and we Southerners generally, what they said is pass the bill without compromise let them see. If you succeed it's better for them. Stop formulating stories in your head because of petty tribal bigotry, its disgusting and childish

FreeThinkerPlut:
How the North’s Fiscal Freeloading Keeps Nigeria in the Economic Dark Age’s

Oh, bravo, President Tinubu, for once again proving that in Nigeria, politics trumps progress, and the loud whining of regional power blocs can drown out any semblance of economic rationality. Your decision to slash the VAT revenue-sharing formula from a bold 60% derivation-based allocation to a measly 30%—all to appease the northern states’ tantrum over their self-inflicted revenue woes—is a masterclass in spineless governance. Why strive for a transformative tax system when you can just cave to the same old regional blackmail that’s kept Nigeria’s economy limping since independence? Truly, a visionary move for a man eyeing 2027’s ballot box.

Let’s dissect this farce. The northern states, clutching their pearls over the prospect of losing VAT revenue due to their “limited industrial base,” have once again weaponized their political clout to preserve a fiscal status quo that’s as outdated as a rotary phone. Their argument? “We don’t generate much VAT because we’re not Lagos or Rivers, so don’t you dare cut our slice of the federal pie!” Never mind that Lagos alone accounts for over 50% of Nigeria’s VAT while some northern states contribute less than a rounding error. This isn’t a new script; it’s a tired rerun of Nigeria’s post-independence saga, where the North’s overreliance on federal handouts has consistently choked economic innovation and kept the country tethered to mediocrity.

Historical Context: The North’s Economic Albatross

Since Nigeria’s independence in 1960, the economic imbalance between the North and South has been a festering wound, and the North’s dependence on federal allocations is the gangrene. The South, with its coastal ports, oil wealth, and commercial hubs like Lagos and Port Harcourt, has always been the economic engine. Lagos, for instance, was generating significant internal revenue even in the 1960s through trade and commerce, while the North leaned heavily on groundnut pyramids and colonial-era administrative structures. When oil became Nigeria’s golden goose in the 1970s, the federal allocation system—cemented under military regimes like Gowon’s and Buhari’s—turned into a sacred cow. States, especially in the North, grew addicted to monthly payouts from the Federation Account, with little incentive to build their own revenue bases.

Take the Groundnut Pyramids of Kano, once a symbol of northern agricultural prowess in the 1950s and 1960s. By the 1980s, they were a distant memory, collapsed under the weight of mismanagement, corruption, and a refusal to modernize agriculture. Instead of pivoting to industrialize or diversify, northern elites doubled down on federal oil rents, using their population size and political leverage to secure disproportionate shares. The 1976 creation of states under Murtala Mohammed’s regime, which gave the North more states than the South, entrenched this imbalance. More states meant more federal allocations, regardless of economic output. By 1999, when Nigeria returned to democracy, northern states were still leaning on federal funds, while Lagos, under Tinubu himself as governor, was revolutionizing its tax system to generate over ₦10 billion annually by 2007 without begging Abuja.

The North’s economic inertia isn’t just about geography; it’s a mindset. Policies favoring centralized control—like the Petroleum Profits Tax Act of 1959, which funneled oil revenue to the federal government rather than producing states—were championed by northern leaders like Ahmadu Bello, who prioritized national unity over regional self-reliance. Fast forward to the 1980s and 1990s, and Structural Adjustment Programs (SAPs) under Babangida devastated northern textile industries, like those in Kaduna, because the region failed to adapt to global competition. Meanwhile, southern states, particularly Lagos, embraced private-sector growth, attracting multinationals and building infrastructure. The result? By 2025, Lagos’s IGR is over ₦1 trillion annually, while states like Yobe or Zamfara barely scrape together ₦20 billion.

Tinubu’s Capitulation: A Betrayal of Progress

Now, enter Tinubu’s tax reforms, which could have been a game-changer. The original 60% VAT derivation formula was a nod to fairness: reward states that actually drive economic activity. Lagos, Rivers, and Ogun, which together generate over 70% of VAT, would finally get their due, incentivizing others to step up. But no, the northern governors and their Senate allies threw a fit, crying “regional inequality” as if their decades of economic lethargy aren’t the real culprit. And Tinubu, the supposed “Lagos miracle worker,” folded like a cheap suit. Reducing the derivation share to 30% isn’t a compromise; it’s a surrender to the same parasitic fiscal culture that’s kept Nigeria’s tax-to-GDP ratio at a pathetic 13.5%, lower than Ghana’s 15% or Kenya’s 18%.

Why did he cave? Oh, let’s not pretend it’s anything but 2027 election math. The North’s voting power, with its 19 states and inflated population figures, is the ultimate trump card. Tinubu knows he can’t win without northern votes, so he’s traded economic reform for political survival. Never mind that this perpetuates a system where states like Kano or Kaduna, with vast agricultural potential and millions of consumers, contribute peanuts to VAT because they’ve refused to modernize or attract investment. Instead of challenging them to innovate, Tinubu’s handing them a lifeline to keep coasting on federal crumbs. Truly, a bold strategy for a man who once turned Lagos into Africa’s fifth-largest economy.

The North’s Ultra-Conservative Economic Mindset

And let’s talk about the North’s economic philosophy—or lack thereof. Their insistence on preserving federal allocations over derivation reeks of an ultra-conservative mindset that would feel right at home in Niger or Chad, where economies limp along on subsistence agriculture and foreign aid. Why bother with pesky things like industrial policy, tech hubs, or tax reform when you can just demand a bigger slice of someone else’s pie? Kano, with its centuries-old trading history, could be a logistics powerhouse, yet its markets are stuck in the 19th century. Kaduna, once a textile giant, hasn’t recovered from the 1980s because its leaders prefer lamenting “marginalization” to building factories. Compare this to Rwanda, a landlocked, resource-poor country that’s tripled its GDP per capita since 2000 through aggressive innovation and governance reforms. But no, Nigeria’s North seems content playing the victim, clutching federal allocations like a security blanket while the South sweats to keep the nation afloat.

The Cost of Inaction

This compromise isn’t just a policy misstep; it’s a betrayal of Nigeria’s economic potential. By caving to northern pressure, Tinubu’s ensuring that states have little incentive to innovate. Why should Borno or Jigawa invest in industrial parks when they can coast on VAT from Lagos’s ports? The 30% derivation formula is a half-hearted gesture that won’t push laggard states to compete, nor will it fully reward high-performers like Lagos, which now subsidizes the nation while grappling with overstretched infrastructure. The tax-to-GDP target of 18% by 2026? Good luck achieving that when half the country’s states are incentivized to do nothing.

And let’s not kid ourselves: this isn’t about “equity.” It’s about entrenching a system where political clout trumps economic merit. The North’s fear of revenue loss isn’t a cry for fairness; it’s a refusal to confront their own failures. If they want equity, how about taxing their vast untapped agricultural wealth or formalizing their informal economies? Oh, but that might require actual work, and why bother when you can just bully Abuja into submission?

Conclusion

Tinubu’s VAT formula retreat is a cowardly capitulation to a region that’s held Nigeria’s economy hostage for decades. The North’s overreliance on federal allocations isn’t a quirk; it’s a deliberate choice to prioritize political power over economic innovation, a pattern etched into Nigeria’s history from the groundnut pyramids’ collapse to the textile industry’s demise. By bowing to their pressure, Tinubu’s not just undermining his own reforms; he’s ensuring Nigeria remains a country where mediocrity is rewarded, and ambition is punished. Perhaps the northern governors should take their economic playbook to Niamey or N’Djamena, where it might fit better. As for Nigeria? Don’t hold your breath for that 18% tax-to-GDP ratio—or any real progress—anytime soon.

FreeThinker from Pluto

These people don't like good thing. What will it cost you just to complement the government for ones? You must find fault in everything! Democracy is all about consensus and compromise. Nobody is perfect, not even that man that claim to have one wristwatch and 2 shoes for over 20 years now

This is the summary to a layman.


President Tinubu planned to let states keep more of the VAT (sales tax) they generate, which would reward productive states like Lagos. But after complaints from northern states that don’t earn much VAT, he backed down and reduced the amount states can keep.

Critics say this is unfair. States like Lagos work hard to build strong economies, while many northern states rely on federal handouts and haven't done much to grow their own revenue. This decision, they argue, encourages laziness and holds back the country’s economy.

Tinubu’s move looks like a political strategy to win northern votes in the 2027 election, even if it means slowing down economic progress.

@Op. Thanks for this. Although they (antagonist to original bill) have argued that a significant portion of the VAT from Lagos Abuja and PH are from MDAs which are "collective" earnings. Ill have expected them to isolate controvercial portions and share subjectively but retained measurable contribution from states for the respective states, even up to 80% to reward hard work as you posited.
I will encourage Rivers and Lasg to continue the cases in court to fight for full allotment of their contributions.
Otherwise, i agree that this is capitulation to mediocrity and inefficiency.

States like Rivers and Lagos must continue with the cases in court concerning the collection of VAT.

What are my even saying. Nigeria must divide now.

KillahPriest:
there's no sane igbo who supported the north being against the bill which is an advantage to them especially and we Southerners generally, what they said is pass the bill without compromise let them see. If you succeed it's better for them. Stop formulating stories in your head because of petty tribal bigotry, its disgusting and childish

That means the igbos on nairaland are insane. No be me talk am o. The igbos in nairaland will never support anything gno matter how good it is as long as its perceived to be initiated by this govt

jogojogo:
That means the igbos on nairaland are insane. No be me talk am o. The igbos in nairaland will never support anything gno matter how good it is as long as its perceived to be initiated by this govt

believe or say what you want, na una wahala be that. Even if Igbos vote APC 100% without rigging, you guys will still hate and abuse them so enjoy yourself

Why do yoruba like telling lies. The reason the 60% derivation was rejected was because all the companies with hq in lagos remits vat in lagos but sells their goods nationwide. If lagos insist on 60% derivation then all states will impose mandatory VAT payment on all those companies which means 36 vats. Simple

loffyloffy:
Yet the 3 Northern regions contributes more VAT than the SE and receives less as a percentage of their VAT contribution than the SE.

But this mumu is here, making the VAT issue about the North.

President Tinubu has achieved an historical legislative victory by passing and initiating the first major reform in taxation since the formation of Nigeria, but your blind eyes and bitter heart won't see that.

Its all about the North as far as you are concerned.

Well, said, let's not forget that states like Ogun and Bayelsa were complicit in producing little VAT but collecting a lot from the Central pot.

From what I can see, President Tinubu had to do some horse trading in lieu of his second term, that's normal in politics.

Ikaeniyan0:
The Igbos said the bill won't go through because the north was against it. Igbos were really happy when the north was against the bill, they supported northern politicians in opposing the bill

Though I don't do tribal things. I am just happy the bill scaled through despite all the altercations.

FreeThinkerPlut:
Congrats on passing a bill that ensures lazy states keep getting paid for doing nothing. Bravo! If that’s your idea of “progress,” no wonder Rwanda is leaving us behind while we’re here clapping for crumbs.

And comparing this to Buhari’s RUGA? Please. At least that one didn’t pretend to be economic reform.

Carry on. Nigeria is definitely getting somewhere—just not forward.

FreeThinker from Pluto

Lol...do your comparative analysis on the previous laws viz a viz these new ones and let's see how lazy states gets more money according to this new laws.

TALK IS CHEAP, SHOW US ANALYSIS TO BACK YOU CLAIMS UP.

THANKS.

Ikaeniyan0:
The Igbos said the bill won't go through because the north was against it. Igbos were really happy when the north was against the bill, they supported northern politicians in opposing the bill

They opposed the bill for two reasons:
1. It won't favor the South East because most of their investments are in the West and all the VAT will go to the West.
2. It will be in their favor politically if the West and the core north are at loggerheads.

IN BOTH CASES IT WAS SELFISH. But I must say, not all of them but the majority were against the bill for either or both of these reasons.