Dr. Jonathan Asake, the former president of the Southern Kaduna Peoples’ Union (SOKAPU), has raised serious concerns over Nigeria’s VAT distribution system, which he claims disproportionately benefits certain states while hindering the economic growth of others.
The former SOKAPU leader pointed to the stark contrast in VAT contributions and allocations, revealing the disproportionate impact this has on Nigeria’s most economically vibrant states. He Emphasized that Lagos, the nation’s commercial hub, which generates approximately N400 billion in VAT revenue every year. Despite this massive contribution, the state receives only about N40 billion from the total pool, a figure that stands in sharp contrast to the allocations given to less economically active states.
For instance, Zamfara, which contributes a mere N400 million in VAT, receives a hefty N5.9 billion in return. According to Dr. Asake, this imbalance discourages states like Lagos from pursuing economic initiatives that could fuel growth and development. He argued that the current system of VAT allocation fails to provide adequate incentives for states to invest in their economies.
“When you look at the numbers, Lagos alone remits about N400 billion to the national VAT pool, yet it only gets N40 billion in return,” Dr. Asake stated. “Meanwhile, Zamfara, which contributes just N400 million, gets N5.9 billion. This clearly isn’t a system that rewards productivity or innovation.”
Dr. Asake also raised concerns that the disparity in VAT distribution has broader implications for national unity. He warned that this unequal distribution model, which favors Northern states over Southern ones, fuels discontent and regional tensions. “The Northern states are benefiting from VAT revenues they didn’t generate, and this is causing widespread dissatisfaction,” he said. “This kind of inequality creates a sense of injustice and erodes the social fabric of the nation.”
The former SOKAPU president further argued that the imbalance not only stifles the economic potential of states that contribute more but also perpetuates a culture of dependence in less productive regions. The unequal allocation could, according to Asake, weaken efforts for fiscal autonomy and sustainable development in Nigeria.
The situation, Asake warns, could lead to long-term negative consequences for the country’s economic health if not addressed. He suggested that reforming the VAT distribution system to ensure a fairer allocation of resources would encourage all states to invest more in their economies and foster a sense of equality and unity across the nation.
, has raised serious concerns over Nigeria’s VAT distribution system, which he claims disproportionately benefits certain states while hindering the economic growth of others.){kind=link}