News: FG loses power to regulate hotel, restaurant businesses in States

The Supreme Court sitting in Abuja Friday held that it is only a State House of Assembly that can make laws on tourism, licensing and grading of hotels, restaurants and other hospitality businesses in a state.


Dismissing the case filed by the Federal Government challenging the powers of Lagos State government to regulate hotels and restaurant businesses in the state, the apex court held that the Constitution of the Federal Republic of Nigeria, 1999 as amended, only empowers the National Assembly to regulate on tourist traffic not on hotel registration or licensing.

Therefore the Supreme Court declared that both the Hotel Licensing Law of Lagos State (as amended) and the Hotel Occupancy and Restaurant Consumption Law of Lagos State, were valid laws, while the offending sections of the Nigerian Tourism Development Corpora-tion (NTDC) Act were declared null and void.

The Lagos State government had argued during the hearing of the case that the National Assembly reserves the power to legislate on the Exclusive Legislative List in Schedule 2 to the Constitution relating to the regulation of tourist traffic, which only pertained to immigrations and the issuance of visas.

In its contention, the Federal Government through its counsel, Mr. Tunde Busari, argued that the phrase was enough to cover all tourism subjects and that the NTDC Act had therefore covered the field. Mr. Busari  therefore called on the court to invalidate the Hotel Licensing Law and Hotel Consumption Tax Law of Lagos State.

However in its judgment, the apex court ruled in favour of Lagos State in the subject matter and also in another relevant case consolidated by the court.

Justice Sulei-man Galadima who read the lead judgment rejected the submissions made by Busari on behalf of the Federal Government in both cases,  and dismissed the case.

It would be recalled that the Lagos Sate Government and the Federal Government had been embroiled in controversy over the question of proper authority to license and grade hospitality establishments.

This had resulted in the NTDC and the State Government setting up parallel registration and regulation structures to the annoyance of businessmen in the industry. By dismissing the case of the Federal Government, the apex court has put paid to this controversy and paved way for State Governments to take full charge of tourism regulation and development within their respective jurisdictions.

Commenting on the judgment, Mr. Disun Holloway who is the Lagos State Commissioner for Tourism and Intergovernmental Relations declared the judgement as a landmark and commended the Supreme Court for upholding the tenets of Federalism.