A combined reading of Sections 19 (b) and 22 (3) (f) of the Nigerian Tourism Development Authority Act, 2022 reveals that the Authority can only ‘approve’ programmes and projects for funding subject to the powers of the Management Board of the Fund to evaluate, approve, review, and monitor the execution of the said projects.
Section 23 provides for a tourism development levy which shall be used to promote tourism and support the Fund where necessary. This levy includes tourism visa fees, a tourism development contribution levy of 1% per room rate, or a flat rate or any rate as may be prescribed by the Authority, a tourism departure levy to be paid by tourists leaving Nigeria, and other levies as may be prescribed.
While tourism visa fees, tourism departure levy and other levies directly related to the movement of tourists can be aggregated under Item 60, part 1 of the 2nd Schedule of the Constitution of the Federal Republic of Nigeria, 1999, the 1% per room rate tourism development contribution levy to be imposed on hotels may not easily fall within the ambit of ‘tourist traffic’ as defined by the Supreme Court in the AG Federation v. AG Lagos State case.
It is however safe to conclude that, under Sections 24, 25, 26, 27, 28, and 29 of the Act, the 1% flat rate in item (ii) above can only be sourced from hotels under the Tourism Alliance.
The Act allows the Authority to accredit all hospitality and tourism establishments to create a tourism alliance. This is to ensure standardization, quality assurance, consumer protection, and public health and safety of establishments under the Alliance. The Authority can also control the grading and classification of all tourism enterprises under the alliance.
There is no gainsaying the fact that the Authority’s sphere of control concerning the accreditation, grading and classification of hotels is limited to establishments that form part of the Alliance. The 1% levy per room rate would therefore be consideration for the benefits accruing to members of the Alliance under Section 29 of the Act.
Section 29 of the Act provides for incentives for members of the Tourism Alliance. These incentives are not within the statutory realm of the NTDA to give. A realisation, therefore, of the intendment of Section 29 would be dependent on the agencies within whose statutory purview the powers to make such concessions lie.
Fiscal reliefs, tax exemption and Customs duty exemptions for members of the Alliance as provided in the Act, are matters for the Ministry of Finance. Similarly, the authorisation by the Central Bank of Nigeria (CBN) to hotels to purchase and sell foreign currency is a matter for the CBN.
With the different political dynamics under each Agency and the Agencies’ respective statutory control over the intended incentives, the NTDA will have to form several inter-agency/ministerial alliances before the incentives for members of the tourism alliance can be actualized.
Added to the foregoing, is the qualification for the incentives under Section 29 of the Act. A member of the Alliance who has fulfilled the requirements of membership must also meet the requirements for the incentive itself, as determined by the relevant regulator. For example, it is very unlikely that a member of the Alliance operating a hotel, with an interest in purchasing and selling United States of America dollars or other foreign currencies will get a waiver of the steep regulatory requirements from the Central Bank of Nigeria to do so.
Section 5 (d) of the Act provides that the Authority is to oversee the administration of the Tourism Development Fund to ensure that it is utilised for the required purpose.
Section 21 of the Act creates a Management Board of the Fund to control, invest and administer the Tourism Development Fund. Just like the Governing Board of the Authority, the Management Board comprises a Chairman, a Director General, and other members to be appointed by the President on the recommendation of the Minister.
The Act did not expressly subject the Management Board to the Governing Board of the Authority. In fact, by Section 22 (3) (f) of the Act, the Management Board has the power to review projects approved by the Authority. Herein lies a dilemma.
Section 22 (3) donates very far-reaching and absolute powers to the Management Board to source for, collect and disburse the Fund.
The Act does not provide for any checks and balances and/or an audit process for the Management Board of the Fund as it provided in Section 16, for the Authority’s obligation to render accounts to the ‘appropriate Authority’ not later than 30th June every year. This means that the power of the Management Board of the Fund to disburse the Fund is statutorily and administratively unfettered.
Although the Act does not subject the Management Board’s powers to scrutiny by an ‘appropriate authority’, the law under Section 11 of the Interpretation Act cap. 123, Laws of the Federation of Nigeria is that whoever appoints a person into office has the power to suspend or remove him. This statutory principle can be applied in forming the deduction that the Management Board reports to the President who appointed its principal officers, subject to any legislation to the contrary. All said, here lies a weighty legal issue of two captains in one ship, an issue which has to be expeditiously resolved with clarity and authority that flows from the Presidency. Who is primus inter pares- The Governing Board of the Authority or the Management Board of the Tourism Development Fund?
The NTDA Act is a good work in progress and there is always room for improvement. Ambiguities and lacunas where any exist, can amongst other tools be remedied with the instrumentality of guidelines and subsidiary legislation. The cooperation of States and private stakeholders in the sector is a sine qua non for a seamless and progressive application of the Act. It is expected that with the clear delineation of roles between the Federal and State Governments, conflicts relating to the implementation of the new Act and guided direction of Tourism development in Nigeria will be a thing of the past.
Chuka Agbu, a senior advocate of Nigeria, is senior partner at Lexavier Partners.
