The International Monetary Fund (IMF) has recommended introducing taxes on fuel products and telecommunications services in Nigeria.

According to the IMF, this is part of broader measures to increase government revenue and create fiscal space for development spending and social interventions.

The international financial organization argued that stronger revenue mobilisation had become increasingly important as Nigeria’s fiscal position remained under pressure despite recent reforms.

This comes as Nigerians are protesting against worsening standard of living made worse by widespread insurgency.

The recommendation was contained in the IMF’s 2026 Article IV Consultation report on Nigeria, where the Fund argued that additional tax measures would be needed over the medium term despite the recent overhaul of the country’s tax system.

“Further tax policy changes will likely be needed—such as increasing the VAT rate, extending VAT to fuel products, rationalising tax expenditures in particular VAT exemptions on extractive industries and some customs duties, and introducing telecom excises—to complement administrative gains,” the IMF said.

The institution, however, cautioned that the timing of any new taxes must take into account Nigeria’s rising poverty levels and worsening food insecurity.

“The timing of reforms must consider the poverty and food insecurity situation and ensure that the cash transfer system is in place and funded,” the Fund added.

A previous attempt by the Federal Government to impose a five per cent excise duty on telecom services met strong resistance from operators, subscribers and consumer advocacy groups before it was suspended and eventually scrapped.

Telecommunications firms had maintained that the industry was already weighed down by multiple taxes, rising energy costs, foreign exchange challenges and infrastructure constraints.

They warned that any additional levy would likely be transferred to consumers through higher call and data tariffs.

Similarly, proposals to tax fuel products have faced opposition from labour unions and private sector organisations amid concerns over the rising cost of living following the removal of petrol subsidies and increases in transport and food prices.

The IMF’s latest recommendation comes as the Fund projects that Nigeria will require stronger revenue mobilisation efforts to sustain planned increases in public spending and provide support for vulnerable households.

According to the report, revenue-enhancing tax policies could generate additional revenue equivalent to 3.9 per cent of Gross Domestic Product within three years of implementation.

The Fund identified a two-percentage-point increase in the Value Added Tax rate as the largest contributor, with a projected revenue gain of 0.8 per cent of GDP.

The report also projected that removing pioneer status incentives and revising free zone regulations would generate an additional 0.7 per cent of GDP.

Reforms to capital gains taxation and adjustments to personal income tax bands, allowances and rates were each estimated to contribute 0.6 per cent of GDP.

The IMF further estimated that a top-up tax on multinationals and large firms could raise 0.5 per cent of GDP, while rationalising investment allowances would contribute another 0.4 per cent.

Notably, the category labelled “others”, which includes telecom excise duties and measures such as a carbon tax on fuel, was projected to generate an additional 0.4 per cent of GDP in revenue.

Beyond new tax measures, the Fund said Nigeria could achieve even greater gains through improved tax administration.

It projected that administrative reforms would generate an additional 3.1 per cent of GDP through better compliance, stronger enforcement and efforts to reduce informality in the economy.

According to the report, measures such as fiscalisation, electronic invoicing and cross-validation of tax deductions could generate 1.5 per cent of GDP, while expanded tax identification registration and consolidation of taxpayer databases could contribute a further 1.6 per cent of GDP.

The IMF acknowledged that some of Nigeria’s recently enacted tax reforms would reduce government revenue in the short term because they were designed to support households and small businesses.

It estimated that revenue-reducing measures would lower revenues by 2.4 per cent of GDP.

Expanded VAT input credits, additional zero-rated items and broader exemptions on basic consumption goods were projected to account for 1.7 percentage points of the decline.

Lower corporate income tax obligations for smaller firms would reduce revenues by 0.4 per cent of GDP, while lower personal income tax rates and expanded exemptions for low-income earners would account for another 0.3 percentage-point reduction.

Overall, the IMF projected that the combined impact of revenue-enhancing measures, administrative reforms and revenue-reducing policies would result in a net increase in government revenue equivalent to 4.6 per cent of GDP over the medium term.Nigerian investment opportunities

Central Bank of Nigeria (CBN) is outlining plans to process salaries, pensions, and social welfare benefits through the eNaira.

The proposal is outlined in the Nigeria Payments System Vision 2028 (PSV2028), a strategic roadmap aimed at transforming the eNaira from a pilot project into a core component of the country’s payment infrastructure.

Under the framework, the CBN plans to drive wider adoption by integrating the eNaira into government-to-person payments, payroll systems, offline transactions and financial services targeted at micro-enterprises.

Launched in October 2021 as Africa’s first Central Bank Digital Currency (CBDC), the eNaira was introduced to promote financial inclusion, reduce transaction costs, improve remittance flows and support Nigeria’s transition to a cashless economy. However, adoption has remained below expectations despite continued regulatory support.

According to the CBN, the digital currency framework will be reviewed and strengthened to better align with emerging market needs.

The roadmap identifies government disbursements as a key driver for increasing usage and integrating the eNaira into everyday transactions.

If implemented, public sector salaries, pension payments, conditional cash transfers and other welfare programmes could be distributed through the platform, potentially improving payment efficiency and expanding access to digital financial services.

The roadmap also highlights programmable-money capabilities that could set the eNaira apart from traditional payment systems. These features include time-restricted spending, purpose-specific payments, automated payment splitting and dedicated sub-wallets for different financial needs.

The CBN believes these functionalities could improve transparency, strengthen fund management and enhance the effectiveness of targeted government interventions.

Beyond consumer payments, the apex bank said the eNaira could support settlement systems, banking operations and tokenised financial assets such as bonds and securities, strengthening Nigeria’s broader financial market infrastructure.

Olayemi Cardoso, governor, CBN, said the Payments System Vision 2028 strategy is designed to strengthen Nigeria’s position as a leading digital payments market while improving efficiency, resilience and inclusiveness across the financial system.

Despite millions of eNaira wallets being created and transactions worth approximately N22 billion processed, the digital currency has yet to achieve widespread everyday use.

The CBN identified challenges including limited merchant acceptance, weak integration with banking and fintech applications, and the absence of cross-border CBDC payment corridors.

To address these issues, the bank plans to position the eNaira as a preferred platform for government payments, remittances and trade settlements while opening its APIs to fintech firms for broader integration and innovation.

The CBN also intends to explore bilateral CBDC corridor pilots with major trade and remittance partners to facilitate faster and more efficient cross-border transactions.

For MSMEs, wider eNaira adoption could reduce transaction costs, improve access to digital payments, streamline government support programmes and create new opportunities for participation in Nigeria’s growing digital economy.

A coalition of civil society organisations has warned that Nigerians’ personal information remains vulnerable to abuse despite existing data protection laws.

In a statement titled “Protected From the State, Not By It: Nigeria’s Data Protection Crisis Is a Crisis of Implementation,” the group said Nigeria developed one of Africa’s largest digital identity databases but failed to adequately protect the information it collects.

The coalition, comprising Media Rights Agenda (MRA), Paradigm Initiative (PIN), Digital Rights Lawyers Initiative (DRLI), Accountability Lab Nigeria, PROMAD Foundation, DigiCivic Initiative and others, noted that the National Identity Management Commission (NIMC) had enrolled more than 121 million Nigerians as of June 2025, while the country also operates under the Nigeria Data Protection Act (NDPA) 2023 and a dedicated Nigeria Data Protection Commission (NDPC).

However, the organisations argued that these safeguards failed to translate into meaningful protection for citizens.

According to the group, recent incidents involving alleged unauthorised access to sensitive government databases have exposed weaknesses in oversight and accountability mechanisms.

They cited reports surrounding the disclosure of voter registration information from the Independent National Electoral Commission (INEC) database and investigations that uncovered the online sale of sensitive identity records, including National Identification Numbers (NINs), for as little as ₦100.

“When the regulator’s own data is not safe, no citizen’s data is. A government that cannot protect its citizens’ data should, at minimum, be cautious about how aggressively it collects and deploys it. Nigeria has done the opposite. Under the NDPA, data controllers are required to undergo compliance audits filed with the NDPC, an obligation enforced against private entities even as public institutions, the largest holders of citizens’ data, face no comparable scrutiny,” the coalition stated.

The organisations also expressed concern about the expansion of state surveillance programmes, arguing that Nigeria lacked a comprehensive legal framework governing public surveillance systems.

They said existing laws did not clearly define the limits of surveillance, provide independent oversight, or require human rights impact assessments before such systems are deployed.

The coalition further criticised the continued use of provisions of the Cybercrimes Act against journalists, bloggers and social media users, despite a 2022 judgment by the ECOWAS Court of Justice declaring aspects of Section 24 of the law arbitrary and repressive.

According to the group, Nigeria’s data governance system currently places citizens in a vulnerable position where personal information is aggressively collected but inadequately protected.

“This is the asymmetry at the heart of the crisis: citizens are under-protected from data abuse and over-exposed to state monitoring and punishment,” the CSOs said.

They called on the Federal Government to strengthen enforcement of the Nigeria Data Protection Act, ensure public institutions are subjected to the same compliance requirements as private organisations, and publish the findings of investigations into alleged breaches involving government databases.

The coalition also urged authorities to establish an independent oversight framework for surveillance systems, amend Section 24 of the Cybercrimes Act, in line with the ECOWAS Court ruling, and strengthen accountability mechanisms across public institutions handling citizens’ data.

It warned that public trust in digital governance would continue to erode unless citizens are assured that their personal data is protected from misuse, unauthorised access and unlawful surveillance.