General News
Nigeria, Other African Nations Eye Sin Taxes, Debt Restructuring to Replace Lost Funding
Cash-strapped African nations are looking at imposing sin taxes, restructuring debt and even trying to take a cut of diaspora remittances to replace lost aid funding and prop up their health systems.
So called sin tax, is an excise tax specifically levied on certain goods deemed harmful to society and individuals, such as alcohol, tobacco, drugs, candy, soft drinks, fast foods, coffee, sugar, gambling, vaping, cannabis and pornography.
According to the Telegraph, ten months after Donald Trump slashed America’s lavish overseas aid, former recipients are scrambling for new ways to fill the gaps, said one of the continent’s leading public health experts.
International health aid is projected to drop by two-fifths in 2025 compared with 2023, according to new World Health Organization figures.
A WHO survey has found cuts have reduced critical services such as maternal care, vaccination and disease surveillance – by up to 70 per cent in some countries.
Nations have acknowledged Mr Trump is not going to change his mind, and similar cuts from the UK and others mean global aid funding is not going to return to levels of recent years.
Prof Helen Rees, a world renowned HIV and global health researcher, said: “We are seeing just a real change in the way that people are thinking about the way we are going to finance.
“Because that is the reality and this is not going to come back to any of those levels that we have seen.”
Prof Rees, who heads the Wits RHI research institute at Johannesburg’s University of the Witwatersrand, said there was also an acknowledgement in many countries that they had become too dependent on aid.
She said: “Many African health ministers have now said we shouldn’t have done this, we shouldn’t have had this level of dependency, so that when it was withdrawn, we all suddenly reeled backwards and said oh my goodness, we hadn’t planned for this.”
African health leaders have also admitted that the previous international largesse had been inefficient and often wasted, doing too little to build up lasting health systems that could stand alone.
Dr Jean Kaseya, director-general of the Africa Centres for Disease Control and Prevention, recently estimated that 60 per cent of traditional foreign health aid to Africa was effectively wasted.
He said: “Let me also shock you: We don’t need more than 40 per cent of [the] money we were receiving before.”
As aid cuts have bitten, Kenya, Nigeria and South Africa have all allocated budget increases to health, and are trying to get the increases approved by their parliaments.
Prof Rees said countries were looking at how they could increase taxation to make up for the lost money.
Some were looking at so-called sin taxes, including targeting a boom in online gambling.
Ghana earlier this year put a 20 per cent increase on taxes for alcohol, tobacco products and sugary drinks, in part to raise money for its health service.
Crypto currency could be another target for taxation, Prof Rees said.
Another area being investigated is money sent from abroad.
She said: “If you imagine some of the big countries that have got a big diaspora, remittances are a hugely important part of the foreign exchange income.
“So is there a way that diaspora remittances can be looked at?”
Countries were also looking at pooling procurement to get better bargaining power on vaccine and drug deals, following an example set by the Pan American Health Organisation, which has had a similar scheme since the 1970s.
As countries fund themselves with more of their own money, they will have to make their own prioritisations about what healthcare they want.
Prof Rees said: “Actually some of these health products that we really need are expensive. Countries are going to have to say, if I buy that vaccine, I can’t buy that drug, or I can put money into health services.”
The financial squeeze is not confined to countries. She said global health agencies such as those run by the United Nations, or bodies such as the Global Fund and the GAVI vaccine alliance were also looking at how to cut costs, pool resources and streamline.
She said: “At every level, people are starting to say it can’t be business as usual and we have to rethink at every single level how we do our business.”
International aid will not disappear, but she said increasingly Washington was doing country-to-country deals, rather than backing big global agencies and programmes.
African nations were also going to have to be better at making the case for support, she suggested.
While there was a clear humanitarian case for health aid, she said there was also a case that it had security and stability benefits for richer countries, including a reduction in migration.
She said: “There’s also a very real case about stabilising poor countries.
“Investment in development and investment in health is a stabiliser for countries. If countries can’t afford to do it adequately themselves, you are going to get destabilisation of economies and therefore of political stability.
“Are countries just going to close borders, or do you say that investment actually builds stability and therefore the need for immigration diminishes? Development aid and stability are incredibly important.”
The WHO this week launched new advice for countries dealing with the aid cuts.
Dr Tedros Adhanom Ghebreyesus, the director general, said: “Sudden and unplanned cuts to aid have hit many countries hard, costing lives and jeopardising hard-won health gains.
According to the African Energy Chamber’s 2025 report, African oil and gas firms face growing “off-field risks,” including regulatory uncertainty, security vulnerabilities, and tighter financial conditions—factors that complicate efforts to raise capital or pursue stock listings.
Economic and Financial Crimes Commission (EFCC) has warned of rising cryptocurrency-related crimes, revealing that illicit digital currency transactions exceeded $160 billion globally in 2025.
Ola Olukoyede, chairman, raised the concern during the inauguration of the United Nations Office on Drugs and Crime Country Programme for Nigeria (2026–2030) in Abuja.
Olukoyede, warned that digital currencies such as Bitcoin are increasingly being exploited by criminal networks to move funds across borders undetected.
According to him, advances in technology, weak regulatory frameworks, and gaps in global financial systems have created fertile ground for cyber-enabled financial crimes.
The anti-graft agency boss stressed that tackling cryptocurrency crime required coordinated national strategies, stronger institutions, and intelligence-driven enforcement.
According to him, the new UNODC programme comes at a critical time when Nigeria and the global community are facing growing threats from organised crime, cybercrime, and illicit financial flows.
Olukoyede described the initiative as a strategic platform to strengthen the rule of law, improve the criminal justice system, and protect citizens from financial and violent crimes.
Musa Aliyu, chairman of the Independent Corrupt Practices and Other Related Offences Commission (ICPC), in his comments, called for stronger inter-agency cooperation.
Aliyu said Nigeria faced interconnected threats, including violent extremism, smuggling, organised crime, and illicit financial flows, warning that no single agency could address them alone.
Federal government has awarded N50 million each to 45 students selected from 65 finalists drawn from public and private tertiary institutions nationwide under the Student Venture Capital Grant (S-VCG).
Tunji Alausa, minister of Education, unveiled the initiative at the weekend at the United Nations Development Programme Innovation Hub in Ikoyi, Lagos, describing it as a bold step toward positioning Nigerian youth as drivers of global innovation.
Alausa said the programme marked a significant shift in education policy, aimed at empowering students through innovation, entrepreneurship, and skills development. He noted that the grant offers equity-free funding, mentorship, incubation, and access to digital tools.
He explained that the beneficiaries emerged after a rigorous selection process involving over 30,000 applicants from more than 400 tertiary institutions across the country, culminating in a three-day bootcamp and pitch session before industry experts.
According to the minister, the initiative is designed to transform tertiary institutions into hubs of innovation and economic development, enabling students to move from ideation to commercialisation and become job creators.
“Today is not just another programme event. We are activating a new future for Nigerian students where great ideas are nurtured into impactful solutions,” he said.
Also speaking, Suwaiba Ahmad, minister of State for Education, described student entrepreneurship as a critical national strategy for job creation and economic growth. She emphasised the need for institutions to move beyond theory and support students in translating ideas into viable enterprises.
Similarly, Bosun Tijani, minister of Communications and Digital Economy, commended the initiative, urging beneficiaries to focus on building sustainable and impactful solutions rather than pursuing short-term gains.
He advised students to adopt consistency and long-term thinking, noting that small, sustained efforts could lead to meaningful innovation and societal impact.
In her goodwill message, Elsie Attafuah reaffirmed the commitment of the United Nations to supporting Nigeria’s innovation ecosystem.
She encouraged beneficiaries to refine their ideas, respond to market needs, and contribute meaningfully to national development through innovative solutions.
The minister acknowledged key partners, including the UNDP, Google, and the Bank of Industry, for their support in implementing the initiative and expanding opportunities for young innovators across Nigeria.
The Federal Government has launched the ‘Cross-Border Digital Payments and Identity in Nigeria under the AfCFTA’ report, urging stakeholders to unlock trade opportunities for Micro, Small and Medium Enterprises (MSMEs) to access the $3.5 trillion African Continental Free Trade Area (AfCFTA) market.
The high-level report, hosted by the Office of the Vice-President in collaboration with ODI Global under the Supporting Investment and Trade in Africa (SITA) programme, was unveiled on Monday by the Deputy Chief of Staff to the President, Ibrahim Hassan Hadejia, in Abuja.
Hadejia described the research as both timely and strategic, noting the strong coordination by the Office of the Vice-President and the leadership of the Federal Ministry of Industry, Trade and Investment.
He revealed that the cross-border payments report followed earlier milestones, including the development and launch of Nigeria’s Digital Trade Strategy and a capacity-building programme for subnational leaders.
According to him, Nigeria is increasingly assuming a leading role in shaping the digital trade agenda across the African continent, necessitating that the country remains at the forefront of AfCFTA implementation.
He noted that deepening engagement with AfCFTA and enabling businesses, particularly SMEs, to conduct seamless cross-border transactions will be critical to unlocking trade, fostering growth, and creating jobs.
He further stated that efficient cross-border payments, supported by trusted digital identity systems as recommended in the report, will be key to realising President Bola Ahmed Tinubu’s Renewed Hope vision for Nigerian MSMEs.
Hadejia also observed that while the report identifies the Pan-African Payment and Settlement System as a critical platform for cross-border digital payments, Nigerian fintech firms such as PalmPay and Moniepoint, which have some of the largest and most active user bases, will play a pivotal role in driving adoption.
He assured the audience that the Federal Government remains committed to strengthening critical infrastructure, regulatory frameworks, and partnerships to ensure Nigeria is not only ready for digital trade but continues to lead.
“I appreciate the efforts of all stakeholders and urge us to move AfCFTA beyond a continental agreement to a $3.5 trillion trade juggernaut that will reinvigorate our industries, unlock intra-African trade, and domesticate African prosperity,” he added.
Hadejia stated that intra-African trade will be driven not only by large corporations but by small businesses empowered through digital trade and e-commerce, while noting that issues of trust, identity and logistics, as highlighted in the report, must be addressed.
Commenting on the report, the Special Adviser to the President on Job Creation and MSMEs, Temitola Adekunle-Johnson, said the report – developed under the purview of the Office of the Vice-President – would significantly strengthen the MSME ecosystem.
He explained that cross-border payments in Nigeria and across Africa have historically been largely informal and inefficient but noted that the emergence of the Bank Verification Number (BVN) and National Identification Number (NIN) systems is changing the landscape.
Adekunle-Johnson expressed optimism that the report’s findings and recommendations would enable Nigerian SMEs to achieve seamless access to continental markets.
Earlier, the Special Assistant to the President on ICT Policy, Office of the Vice-President, Salihu Dasuki, disclosed that the office, in partnership with development partners, has developed a framework to fast-track seamless cross-border payments for MSMEs.
He added that a key pillar of President Tinubu’s Renewed Hope Agenda is enabling Nigerians to access digital trade, which informed the capacity-building programme conducted for subnational governments last year.
Also speaking, Special Assistant to the President on Project Support, Office of the Vice-President, Shuda Ahmed, commended ODI Global for leading the research underpinning the report.
She noted that without seamless and affordable cross-border payment systems, MSMEs across the continent would be unable to scale beyond their domestic markets.
The event was attended by officials of ODI Global, representatives of AfCFTA, the National Information Technology Development Agency (NITDA), National Identity Management Commission (NIMC), Nigerian Petroleum Development Company (NPDC), Federal Competition and Consumer Protection Commission (FCCPC), and MSMEs, among other key stakeholders.
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