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have now said we shouldn’t have done this, we shouldn’t have had this level of dependency, so that when it was withdrawn, we all suddenly reeled backwards and said oh my goodness, we hadn’t planned for this.”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.
Lagos Chamber of Commerce and Industry (LCCI) has urged the Federal Government and the National Pension Commission (PenCom) to suspend the proposed increase in Nigeria’s mandatory pension contribution from 18 per cent to 21 per cent, warning that the policy would raise the cost of doing business, threaten jobs and undermine enterprise sustainability at a time of mounting economic pressures.
Dr. Chinyere Almona, director general of the LCCI, said while strengthening retirement security remains an important policy objective, increasing mandatory pension contributions by three percentage points would impose additional financial burdens on businesses already grappling with high borrowing costs, persistent inflation, foreign exchange volatility, rising energy prices and multiple taxes.
According to the chamber, the proposed increase comes at a period when many businesses, particularly micro, small and medium-sized enterprises (MSMEs), are struggling to remain profitable amid Nigeria’s challenging operating environment.
The LCCI noted that Nigeria’s existing mandatory pension contribution rate of 18 per cent comprising 10 per cent by employers and 8 per cent by employees is already broadly aligned with the Organisation for Economic Co-operation and Development (OECD) average of 18.8 per cent.
It argued that raising the contribution to approximately 21 per cent would place Nigeria above several comparable economies, including the United Kingdom, where mandatory contributions stand at 8 per cent; the United States at 12.4 per cent; Kenya at 12 per cent, subject to earnings caps; and South Africa, where there is no equivalent mandatory private-sector pension contribution.
The chamber warned that implementing the proposed increase would significantly raise employment costs for employers, discourage new recruitment, constrain wage growth and place disproportionate pressure on MSMEs, which account for a substantial share of employment in Nigeria.
According to the LCCI, the higher payroll obligations could also reduce Nigeria’s competitiveness as an investment destination, encourage non-compliance with pension regulations and push more businesses into the informal sector.
“A stronger pension system cannot be built on weaker businesses,” the chamber stated, stressing that economic sustainability and business growth remain critical to expanding pension coverage over the long term.
The LCCI therefore called on the Federal Government to defer the proposal until a comprehensive Nigeria-specific actuarial and economic impact assessment is conducted to determine its implications for businesses, workers and the broader economy.
It also urged policymakers to engage in extensive consultations with organised private sector groups, labour unions and other key stakeholders before implementing any changes to the country’s pension contribution framework.
According to the chamber, the government’s immediate priority should be restoring business confidence, preserving existing jobs, encouraging investment and expanding the formal economy, which it described as the most sustainable pathway to improving retirement savings.
As an alternative to increasing contribution rates, the LCCI advised PenCom to focus on developing more innovative investment instruments capable of generating stronger returns on pension assets.
The chamber said improving investment performance would enhance contributors’ retirement savings without imposing additional financial obligations on employers and employees already facing difficult economic conditions.
Nigeria and the African Development Bank (AfDB), on Sunday, called for stronger African ownership of the continent’s vast mineral resources and advocated greater data sovereignty, regional collaboration and strategic financing to ensure Africa derives more economic value from its natural assets.
They spoke at the Ministerial Forum on Critical Minerals, Value Chain and Beneficiation: Pathways for African Transformation, organised by the African Development Bank in Abidjan, Côte d’Ivoire.
Speaking at the forum, the Minister of Solid Minerals Development, Dr. Dele Alake, urged countries to embrace data sovereignty, regional collaboration and strategic financing to ensure mineral wealth translates into sustainable economic growth across Africa.
Alake urged ministers from Africa’s mineral-producing nations to pursue greater regional cooperation rather than isolated national strategies, arguing that coordinated action would enable the continent to derive greater value from its abundant mineral resources.
Alake said Africa must move beyond exporting raw minerals and adopt practical measures to secure full control of its natural assets through value addition and local processing.
He said: “While the mantra of value addition has ushered in an era of economic independence for mineral-producing nations, we need concrete actionable strategies to take charge and be in full control of our natural assets to ensure total economic freedom.”
The minister, who chairs the Africa Mineral Strategy Group (AMSG), said Nigeria had continued to champion a common continental agenda on mineral development through collaboration with more than 30 member countries focused on promoting value addition.
He also advocated greater African control over mineral resource data, describing the continent’s long-standing dependence on the Australia-based Joint Ore Reserves Committee (JORC) reporting standard as outdated.
Alake added, “For the overall interest of the continent, and to efficiently and effectively safeguard its resources, Africa should take charge of the coding mechanisms utilised to assess its mineral assets.”
He urged African countries to adopt the Pan African Resource Reporting Code (PARC), developed by the Africa Minerals Development Centre (AMDC), saying the framework would promote transparency, consistency and ethical reporting while reflecting Africa’s unique geological and environmental realities.
Alake further proposed the establishment of a West African minerals processing hub and corridor stretching from Lagos to Dakar, modelled after the Lobito Corridor, to reduce infrastructure costs, encourage collaborative investment and enable participating countries to specialise in processing specific minerals.
According to him, the regional model would lower financial burdens on individual countries while promoting shared risks, increased trade and stronger value chains.
He also lamented the low level of intra-African trade, which he said stands at about 16 per cent, compared to roughly 60 per cent in Asia and 70 per cent in Europe.
In his remarks, AfDB President Dr. Sidi Ould Tah, described Africa’s mineral sector as a paradox, noting that despite the continent’s vast mineral endowment, it has yet to achieve corresponding gains in Gross Domestic Product (GDP) or attract sufficient Foreign Direct Investment (FDI).
Tah said Africa must overcome the disconnect between its enormous natural wealth and its limited global economic influence by strengthening financing mechanisms and developing integrated mineral value chains.
The forum concluded with the adoption of the Abidjan Declaration, which commits African countries to coordinate policies on critical minerals, regional infrastructure development, value-chain expansion and capital mobilisation.
Under the declaration, the African Development Bank pledged to deploy its financing instruments, technical expertise and capital mobilisation capacity to support mineral-producing countries, reduce investment risks, finance strategic infrastructure and accelerate the development of competitive and sustainable mineral value chains.
A statement by the Special Assistant on Media to the Minister of Solid Minerals Development, Lara Owoeye-Wise, said the declaration also urged African countries to strengthen national and regional capacities capable of attracting investment, financing viable projects and creating quality jobs through local value addition.
The forum brought together more than 20 ministers responsible for mining, energy, industry, natural resources and the green economy, alongside representatives of the African Development Bank, the African Export-Import Bank (Afreximbank), the U.S. Export-Import Bank and mining companies from Germany, Canada and the United States.
Participants reaffirmed that stronger African cooperation, regional processing infrastructure, strategic financing and greater control over mineral resources remain essential to transforming the continent’s mineral wealth into broad-based and sustainable economic development.
Prof. Chukwuma Soludo, governor, Anambra State, has approved an indefinite ban on graduation ceremonies in kindergarten, primary and secondary schools across the state as part of efforts to reduce the financial burden on parents.
Prof. Chukwuma Soludo, governor, Anambra State,
The directive was confirmed by Dr. Law Mefor, commissioner for Information and Value Reformation, in a statement issued on Friday.
According to the commissioner, the government deemed it necessary to clarify the policy following public inquiries and concerns over the scope of the ban.
Mefor explained that the directive applies to all graduation-related ceremonies in both public and private schools across the state.
He said the ban covers events described as graduation, passing-out, crossover or any other ceremony organised to mark the completion of kindergarten, primary or secondary school levels.
The government said the decision was taken to discourage unnecessary financial obligations often imposed on parents through elaborate school celebrations.
The commissioner clarified that students completing Senior Secondary School (SS3) are exempt from the directive.
However, he stressed that graduation ceremonies for SS3 students are not compulsory and may only be held without imposing any financial burden on students or their parents.
According to him, schools choosing to organise such ceremonies must ensure that no levies, compulsory contributions or hidden charges are demanded from parents.
Mefor warned that the state government would not hesitate to sanction any school that violates the directive.
He said schools found organising prohibited graduation ceremonies or imposing illegal charges on parents risk severe penalties, including possible closure.
The commissioner urged school proprietors and administrators to comply fully with the directive in the interest of parents and the education sector.
The state government said the policy is part of broader efforts to make education more affordable and eliminate unnecessary expenses associated with school activities.
Many parents have previously complained about the increasing costs of graduation ceremonies, including compulsory levies for gowns, entertainment, souvenirs and other related expenses.
The government expressed optimism that the directive would ease the financial pressure on families while encouraging schools to focus more on academic excellence than ceremonial activities.
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