Legal Framework of Tourism in Nigeria


Nigeria is blessed with exotic cultures which have overtime become sources of tourist attractions. The richness and diversity of the Country’s cultural heritage, coupled with its beautiful landscapes makes tourism a potential economic driver and foreign exchange earner for the country.

The fortune of Tourism in any socio-economic setting, like other sectors of the economy, is shaped by a number of factors, such as security, transport infrastructure, the hospitality industry, etc. Arguably the most far-reaching of these factors is the legal and regulatory regime.  In Nigeria, legal skirmishes between the Federal Government and the States’ Governments over regulatory control appear to have plunged the sector into a flux and may have left industry players uncertain as to the state of the law and which master to defer to.

Legal and Regulatory Framework

The Constitution of the Federal Republic of Nigeria 1999 (As Amended), has no express provision on the regulation of tourism; the only provision therein is item 60(d) of the Exclusive Legislative List of the Second Schedule (Part 1) to the 1999 constitution which empowers the National Assembly to make laws for the “establishment and regulation of authorities for the Federation or any part thereof to regulate tourist traffic”. This provision was ordinarily perceived to be the constitutional basis for the Federal Government’s overriding control over the tourism sector and it was on this premise that the NTDC Act empowered the NTDC to register, grade and classify hospitality firms across the Country.

Though the constitution makes no provision for the definition of tourist traffic, the Apex Court in Nigeria held in the case of A.G Federation v. A.G. Lagos State that tourist traffic means the ingress and egress of tourist in Nigeria. The implication of the decision of the Court in this case is that the legislative and oversight powers of the National Assembly are limited to just immigration activities of tourist. Thus, notwithstanding the combined provisions of Item 60(d) & Item 68 of the Exclusive Legislative List which empower the Federal Legislature to make laws relating to “tourist traffic” and matters incidental thereto, such laws/regulations may only go as far as is necessary for the purpose of tourist immigration only.

In the referenced case of A.G Federation v. A.G Lagos State, the Federal Government sued the Lagos State Government seeking the judicial interpretation on who has the power to register, grade and classify hospitality concerns in the country. The Federal Government sought a declaration that the Lagos State legislation[2] of licensing and grading hospitality establishments is in conflict with the provisions of Section 4(2)(d) of the Nigerian Tourism Development Act 1992 (NTDA) and therefore, invalid, by reason of its purported inconsistency.

The Supreme Court dismissed the Federal Government’s case and held that the Lagos State House of Assembly is the body entitled – to the exclusion of any other legislative body – to enact laws in the state in the field of tourism and with respect to registration, classification and grading of all hospitality and tourism enterprise in Lagos State.

In a recent development, the Federal High Court appeared to further endorse States’ control in the hospitality arm of tourism in Nigeria. Some hospitality services companies challenged the validity of the Hotel Occupancy and Restaurant Consumption Tax Law in Suit No: FHC/L/CS/360/2018 – The Registered Trustees of Hotel Owners and Managers Association of Lagos v. A.G. Lagos State & Anor. In this case, the hoteliers sought a determination of the court as to whether the provisions of the VAT Act have covered the field with respect to goods and services consumed in hotels, restaurant and event centres in Lagos State and therefore, whether the provisions of the Hotel Occupancy and Restaurant Consumption (Fiscalisation) Regulations 2017, which are in relation to the same taxes, inoperative.

In resolving the issue in dispute, the court held that the power to impose, charge and collect tax pertaining to the supply of goods and services consumed in hotels, restaurants and event centres is on the residual list in the Schedule to the Constitution, and as such, is within the legislative competence of the Lagos State House of Assembly. The Court stated further that being a residual matter, those specific incidents of taxation are within the exclusive legislative competence of a state and that the various provisions of the VAT Act which deals with services consumed in hotels, restaurants and event centres are therefore inconsistent with the Constitution and void to the extent of that inconsistency.

One may have noted that the regulatory disputes have so far, revolved around the hospitality industry and the hospitality industry usually seems to hold the limelight in discussions on tourism. However, the tourism sector depends on a complex grid of industries and regulatory infrastructure to thrive.

Security is vital to the growth of tourism and constitutes a major tourist concern. Thus, safety of lives and property have always been important prerequisite for the attraction of international tourists. In Nigeria, the Police is under the exclusive remit of the federal government, pursuant to Item 45 of the Second Schedule to the Constitution. Thus, within the context of law enforcement, the federal government retains a very central role in the growth of tourism in Nigeria.

Similarly, a lot of the infrastructure needed in the industry are equally within the remit of the federal government. Examples include:

  • Aviation
  • Railways and Transportation (on federal trunk roads)
  • food and pharmaceuticals (drugs)

The import is that, notwithstanding the decisions of the Courts analyzed in this paper, the federal government remains a major stakeholder in the tourism sector and its revenue stream can be significantly grown through the sector.

I am in agreement with the decisions of the Courts which empowers states to regulate the tourism enterprises within their respective states. This is because the tourism needs and potential of states vary. So, it behoves each state to decide which aspect of tourism they want to grow and invest in. However, there is equally a need for collaboration between the Federal and State government.

By way of recommendation, a Joint States’ Advisory Board could be created, whose membership will include the Chairman of each State Board and a representative(s) of the Federal Government. The purpose of this is to promote standardisation. The responsibility of the Board would be to create minimum operational standards in the hospitality and tourism industry and also promote uniformity in the regulation of the industry.

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