Tax reform bills: Former SGF, Lawal advocates for agricultural levies in Northern States

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Former SGF Babachir Lawal


The controversy surrounding Nigeria’s tax reform bill has reignited debates about revenue generation and distribution among the states. Babachir Lawal, a former Secretary to the Government of the Federation, has shared his perspective, emphasizing the potential of agricultural levies in Northern states as a game-changer for regional revenue.


Lawal's critique highlights the disparities in VAT collection and allocation. He argues that the current structure unfairly benefits Southern states, which process raw materials from the North into value-added products, thereby claiming the VAT revenue. This system, according to him, does not acknowledge the Northern contribution as the source of these raw materials.

The Agricultural Potential of the North
Drawing examples from his home state, Adamawa, Lawal paints a picture of untapped revenue opportunities:

Cattle Markets: With over 30,000 cattle sold weekly in Adamawa, a levy of N5,000 per cow could generate N7.8 billion annually.
Rice Paddy Production: Adamawa produces nearly 1 million metric tons of paddy rice annually. A levy of N50,000 per ton could yield N50 billion yearly.
Other Crops: Levies on maize, beans, and sorghum could bring in an estimated combined revenue of N130 billion annually.

Lawal's analysis underscores the potential of agricultural levies to transform the North's economic landscape. However, it also raises critical questions:

How would these levies impact national unity and interdependence?
Would such measures encourage regional development or deepen the North-South divide?
How can states strike a balance between fairness in revenue sharing and fostering collaboration?

Babachir Lawal’s argument invites a deeper exploration of Nigeria's fiscal federalism and the role of agriculture in shaping economic self-reliance. While his proposal for agricultural levies may spark debate, it also serves as a reminder of the untapped potential within Nigeria’s agrarian economies. As the tax reform debate continues, finding equitable solutions that promote national growth remains paramount.

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