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Alliance of Sahel States: Beginner’s Guide

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Professor Maurice Okoli

By Professor Maurice Okoli

Burkina Faso, Mali, and Niger, the three Francophone West African countries under military government, have established an Alliance of Sahel States (AES, or Alliance des Etats du Sahel in French), which is a confederation formed between the above-mentioned three countries.

It originated as a mutual defence pact and was created by the three countries on September 16, 2023. The confederation was officially established on July 6, 2024. The AES is anti-French and anti-ECOWAS in outlook. All three member states of the AES have had their pro-Western governments overthrown by their militaries, and each is currently ruled by a military junta as part of the coup belt.

In 2002, Mali withdrew from the internationally backed G5 Sahel alliance, and Niger and Burkina Faso followed suit in 2023. This led to the dissolution of the G5 framework by its last two members, Chad and Mauritania. The AES has finally exited the African Union (AU) and the Economic Community of West African States (ECOWAS).

In addition to their enthusiasm to ensure long-term political power, the three have generally joined a growing list of African countries that are turning their economies into better environments for their millions of impoverished citizens.

Burkina Faso, Mali, and Niger, in early July 2024, finally withdrew from the African Union and the Economic Community of West African States (ECOWAS) and have further taken the next collective step to create their own sub-regional bloc referred to as the Alliance of Sahel States (AES).

The treaty underscores a “step towards greater integration” between the signatory countries. The pact is open to new members in the event that the candidate accepts all provisions and the ‘trio’ unanimously agrees on the decision.

In practical terms, the trio has repeatedly explained the primary reasons for the joint action as follows: (i) the AU and the ECOWAS’s significant failure to provide adequate support against fighting the jihadists; (ii) the imposition of ‘illegal sanctions’ that are harming the people; and (iii) that the bloc has fallen under the influence of and indiscriminately manipulated by foreign governments, particularly France. (iv) ECOWAS threatens to intervene to restore civilian rule in Niger.

The Alliance further seeks new members whose political philosophy aligns with the current development challenges. The new confederation’s document outlines various directions on its agenda, including establishing a regional bank and stabilisation fund. It has also issued an executive order to facilitate foreign investment in their territorial space.

The document clip circulated widely on social media, racking up thousands of views and introducing fresh debate around the fact that the former political system was stacked with bureaucracy and conservative policy.

A curious look inside the creation of the Alliance of Sahel States has been making resonating waves. The architects of this alliance, both online and offline, have accordingly been pushing the agenda. The Blueprint Document is open to the public and foreign organisations, the regional bloc ECOWAS, and the continental organisation AU.

Reports have indicated that the inaugural meeting was held on July 6 in Niamey, the capital of Niger, and was attended by President of Burkina Faso Ibrahim Traoré, Transitional President of the Republic of Mali Assimi Goita, and President of Niger’s National Council for the Safeguard of the Homeland, Abdourahamane Tchiani.

The Niamey Declaration, in which the ‘trio’ formally announced the establishment of the new confederation,’s primary multifaceted goals include consolidating joint efforts to ensure security and address the socioeconomic problems of the participating states. The alliance will also pursue and undertake joint development projects as well as address questions relating to trade, industry, and agriculture. The document holds the promise to facilitate the free movement of people, goods, and services.

The Alliance of Sahel States is resonating across the sub-region, across Africa, and beyond. Critics have labelled it a real ‘threat to democracy’ and a step to assert ‘an authoritarian’ takeover of political power and administration, while supporters call it a strategic plan to establish power as one ‘of the people, by the people, and for the people, and probably the irreversible beginning of an end of epoch, 500 years of colonialism.

The Alliance of Sahel States came under the spotlight after their July declaration. As expected in the context of the geopolitical situation and analysing the background of the complexities of the evolving political situation, especially in West Africa, it is very noticeable that the United States, Europe, and a few other external powers have stood on the opposite side.

On the other side, the Russian Ministry of Foreign Affairs said in its weekly media briefing that while consistently advocating for ‘African solutions to African problems’, the initiative by the leaders of Burkina Faso, Mali, and Niger fully meets the interests of the people of those countries. “We are confident that the Alliance of Sahel States will facilitate the formation of a new regional security architecture. Russia reaffirms its intention to continue to provide the necessary support to the countries of the Alliance of Sahel States,” the report said.

In another related development, Mali’s military leader, Assimi Goita, had spoken by phone with Russian President Vladimir Putin about political developments and his approach to settling the crisis in the region as a whole. Putin stressed “the importance of a peaceful resolution of the situation for a more stable Sahel,” according to the transcript posted to the Kremlin’s website.

Most probably, ECOWAS is now crumbling due to institutional weaknesses combined with being manipulated by external forces. There has been rising anti-western sentiment in the former French colonies. It is also due to the long-standing discontent with and the inability to support effectively in the fight against growing insecurity in the region. Reports say ECOWAS has been working to set up a standing regional force of between 1,500 and 5,000 soldiers, which reports estimate would cost about $2.6bn (£2bn) annually.

But for political observers, their split from ECOWAS comes with many potential ramifications, ranging from economics to security. Buchanan Ismael, a politics professor at the University of Rwanda, believes it “may increase the risk of insecurity” in an already volatile region infested with militant groups.

Hassan Isilow, a political analyst, says in his report that Burkina Faso, Mali, and Niger have cemented their split from ECOWAS and formed their own Alliance of Sahel States.

The West Africa region could be headed for ‘foreign-imposed instability,’ warns the University of South Africa’s Ahmed Jazbhay.

More countries could’separate themselves from ECOWAS, if not through coups, then with anti-Western populists,’ says Rwanda-based analyst Buchanan Ismael.

The fact is that the common theme in their statements was greater integration between their countries—the majority of African states that have slowly but surely been drifting away from traditional regional and Western allies.

Research reports published by The Conversation, Agence France Press, British Broadcasting, and many other reputable media indicated that the unilateral withdrawal of three West African countries would be hit by trade regulations and restrictions, thus impacting the population and the economy.

The three are landlocked and among the poorest in the world; this already illustrates their major disadvantage and limited position. Several narratives further pointed to the fundamental fact that the crisis has the potential to escalate into either a conflict across West Africa or the final disintegration of ECOWAS.

In July 2024, Burkina Faso, Mali, and Niger signed a confederation security pact and formalised their final exit from the Economic Community of West African States (ECOWAS), the regional bloc that imposed sanctions on them after the coups in Mali in 2020, Burkina Faso in 2022, and Niger in 2023.

“This summit marks a decisive step for the future of our common space. Together, we will consolidate the foundations of our true independence, a guarantee of true peace and sustainable development, through the creation of the ‘Alliance of the Sahel States’ Confederation,” Traore said in a statement posted on X.

By creating their own Alliance of Sahel States, it exposes the regional bloc ECOWAS and the continental organisation AU’s powerlessness, multitude of weaknesses, and long-term inability and incompetency to deal with regional problems through mediation.

In the ECOWAS guidelines, Article 91 of the bloc’s treaty stipulates that member countries remain bound by their obligations for a period of one year after notification of their withdrawal. For better or for worse, these interim military governments have adopted a hardline stance, consistently delaying fixing concrete dates to hold democratic elections.

The AU Commission chief, Moussa Faki Mahamat, repainted the ‘bleak picture’ with a ‘litany of difficulties’ confronting many African countries during the 37th Ordinary Session of the Assembly of Heads of State and Government of the African Union (AU) summit held, from February 14 to February 15, at the AU Headquarters in Addis Ababa, Ethiopia. AUC chief Moussa Faki Mahamat assertively spoke of ‘worrying trends’ in North Africa, the Horn of Africa, and also in West Africa.

Moussa Faki Mahamat blasted the failure to counter multiple “unconstitutional changes of government” following a string of coups in West Africa and warned the scourge of “terrorism” was diverting money away from vital social needs to military spending. In practical reality, the summit was now concerned about looking inward, closely protecting their sovereign prerogatives rather than investing in collective security, somehow to fund most of its budget rather than foreign donors. Gabon and Niger were absent from the summit following their suspension over coups last year, joining Mali, Guinea, Sudan, and Burkina Faso, which are also barred for similar reasons.

As an expert in geopolitics and regional economic integration, it is important to take a close look at the possible obvious implications. Despite taking this innovative step, there are still obstacles and explicit challenges in the areas of coordination and cooperation. For instance, the fact that the three are geographically landlocked stipulates the questions of access to the coastline, logistics, and delivery of goods through seaports.

The next question that cannot be overemphasised is whether Burkina Faso, Mali, and Niger are members of the West African Economic and Monetary Union, which uses the CFA franc as its common currency. The trio has to create their own currency if they are expelled from the West African Economic and Monetary Union.

Usually referred to as the West African Sahel, it is the vast semi-arid region where Burkina Faso, Mali, Niger, and other countries are located. This West African Sahel region has been plagued by security challenges, including terrorism and organised crime. Terrorist organisations such as Boko Haram, the Islamic State, and al-Qaeda in the Islamic Maghreb (AQIM) have operated in the Sahel, exacerbating violence, extremism, and instability in the region.

According to the latest issue of the Global Terrorism Index, there is a strong link between organised crime and terrorism in this region. Terrorism is on the rise, and the Sahel accounts for almost half of all deaths from terrorism globally.

This is further exacerbated by the cross-border operations of armed groups and rising violent extremism. That, combined with widespread and growing desertification, contributes additional strain to the region’s development. Burkina Faso, Mali, and Niger have a combined population of approximately 80 million people and some of the fastest population growth rates in the world. But development has been assessed as poor, far below what is needed to guarantee a normal living standard.

In addition to insecurity and instability, these countries are engulfed in various socio-economic problems combined with traditional cultural practices that have lessened development. The system of governance and poor policies largely hinder sustainable development.

In light of the above, ECOWAS will have to adapt its strategy to this new geopolitical reality. The AES could seek to establish or strengthen its partnerships with other international actors, such as Russia or China, of the multipolar BRICS Alliance, which have shown growing interest in Africa.

Burkina Faso, Mali, and Niger together comprise some 72 million people, almost a fifth of the regional bloc’s population. It remains one of the least developed countries in the world, with a GDP of $16.23 billion in 2022. Geography and the environment contribute to Burkina Faso’s food insecurity.

Mali’s key industry is agriculture. Cotton is the country’s largest crop export and is exported west throughout Senegal and Ivory Coast. Gold is mined in the southern region, and Mali has the third-highest gold production in Africa (after South Africa and Ghana).

Niger is the second-largest landlocked nation in Africa, behind Chad. Over 80% of its land area lies in the Sahara. In 2021, Niger was the main supplier of uranium to the EU, followed by Kazakhstan and Russia. Despite its large deposit of uranium, Niger has a multidimensional underdevelopment, and 80% of its citizens consistently live in abject poverty.

The Economic Community of West African States (ECOWAS) continues to look for appropriate mechanisms to resolve the ongoing crisis. The regional bloc has come under persistent criticism; it has slackened on its primary responsibilities, while some have called for drastic reforms and personnel changes (overhauling or restructuring), attributing to the complete inefficiency of the organisation.

Consisting of 15 member states, ECOWAS facilitates peacekeeping through systematic collaboration with civil society, cooperation with development policies, and other activities to meet sub-regional security challenges. Established on May 28, 1975, the bloc’s reputation has been at stake and most probably needs new dynamic faces at the Secretariat in Abuja, Nigeria.

Professor Maurice Okoli is a fellow at the Institute for African Studies and the Institute of World Economy and International Relations, Russian Academy of Sciences. He is also a fellow at the North-Eastern Federal University of Russia. He is an expert at the Roscongress Foundation and the Valdai Discussion Club.

As an academic researcher and economist with a keen interest in current geopolitical changes and the emerging world order, Maurice Okoli frequently contributes articles for publication in reputable media portals on different aspects of the interconnection between developing and developed countries, particularly in Asia, Africa, and Europe. With comments and suggestions, he can be reached via email: markolconsult (at) gmail (dot) com.

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Publication Standards and Predatory Publishing in Africa

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Timi olubiyi Predatory Publishing in Africa

By Timi Olubiyi, PhD

I pray that the new year, 2026, unfolds with fresh opportunities, meaningful growth, and endless possibilities. Amid the many emerging topical issues, this piece focuses on a troubling trend in academia: the growing reliance on predatory publications and the declining pursuit of reputable, recognised journals.

For many academics, particularly early-career scholars, mid-career academics facing promotion bottlenecks, adjunct and contract lecturers under publish-or-perish pressures, and even senior scholars navigating international mobility aspirations, evolving global performance metrics, and global competitiveness, this piece is intended as a lifeline, offering clarity, guidance, and reassurance at a critical moment in evolving scholarly environment.

Predatory publications are sometimes legitimate outlets that promise rapid academic publication but without the expected integrity of research or known ethical reputation, and oftentimes quality is compromised for cash for these publications. This alarming trend is not only undermining careers but also diminishing the visibility and impact of knowledge in shaping global scientific discourse.

From an African perspective, the damage caused by predatory publishing goes far beyond wasted money; it quietly erodes academic credibility, blocks international mobility, and traps scholars within local systems that increasingly struggle to meet global university standards.

Predatory journals thrive where demand for publication is high, and support structures are weak. In many African universities from observation, promotion and appointment criteria emphasise quantity over quality and indexed publications.

The disturbing finding is that often times there are no clear differentiation between indexed and non-indexed publication. As a result, many university-based journals have become the default publishing route but these journals are largely not indexed in reputable databases like Scopus, Web of Science, ABDC (Australian Business Deans Council) and ABS (Association of Business Schools) journal ranking systems which should increase quality and standards. These non-indexed journals journals are sometimes institutionally encouraged, yet they rarely offer the global visibility, citation impact, or academic recognition required for international competitiveness.

For a scholar whose work never leaves these local publishing ecosystems, the world remains largely unaware of their research, no matter how insightful or relevant it may be. Yet perhaps the most painful consequence of predatory publishing is loss of global opportunities, and systematic underestimation of impact.

African academics are frequently judged as underperforming, not because they lack ideas, rigour, or relevance, but because their work is largely invisible on global platforms. From the author’s observation, a striking number of African scholars have no Scopus profile at all, or profiles are with very low visibility, despite years of teaching and publishing as experienced lecturers, senior researchers, and even professors. This invisibility feeds a damaging cycle because when it comes to international evaluation limited indexed output is seen and it is assumed that African scholars have limited scholarly contribution, while local systems continue to reward these non-indexed publications that do not translate into global recognition.

The danger becomes most visible when academics attempt to cross borders physically or professionally. Because for international job applications, visiting fellowships, postdoctoral positions, and global research collaborations increasingly rely on transparent metrics: indexed publications, citation records, journal rankings, and evidence of international engagement.

An academic who has published extensively in non-indexed or predatory journals may appear productive on paper locally, but he is invisible internationally. Hiring committees in Europe, North America, Asia, and increasingly the Middle East are trained to recognise predatory outlets; rather than viewing such publications as achievements, they quickly interpret them as red flags, questioning the rigour, ethics, and peer-review exposure of the candidate.

In this way, predatory journals do not merely fail to help academics they actively ruin their global prospects. The contrast between quality publishing and predatory publishing is very clear and obvious. Because quality publishing follows strict academic standards like peer review, transparency, and ethical practices, predatory publishing on the other hand ignores these standards and mainly exists to collect fees from authors without providing real scholarly value.

A single well-placed article in a reputable indexed journal can open doors to international conferences, editorial invitations, collaborative grants, and academic networks.

For example, Nigerian and Kenyan scholars who publish in respected international journals often find themselves invited to review manuscripts, join global research teams, or contribute to policy-oriented projects at the African Union, World Bank, or UN agencies. These opportunities rarely come from non-indexed or predatory outlets because such journals are not read, cited, or trusted beyond narrow circles. Visibility, in the modern academic world, is currency, and predatory journals offer the illusion of productivity without the substance of impact.

So, what is the future of African academics in a globalised academic labour market? As universities worldwide shift toward international rankings, global partnerships, and research impact metrics, African scholars’ risk being locked out not because they lack intellectual capacity, but because their work is trapped in publishing systems that the global academy does not recognise. The danger is a growing academic isolation, where African knowledge circulates locally but fails to influence global debates or attract global opportunities. The solution lies not in rejecting local journals outright, but in redefining academic ambition and preparedness.

African academics must increasingly think beyond local promotion requirements and prepare for international exposure from the outset of their careers. This means understanding journal indexing systems, targeting reputable outlets even if acceptance takes longer, and valuing revision and rejection as part of scholarly growth. Universities, in turn, must reform promotion criteria to reward quality, indexing, and impact rather than sheer volume. Training in research methods, academic writing, and ethical publishing should be institutional priorities, not optional extras.

Governments and regulatory bodies can support this shift by funding open-access publication in reputable journals and discouraging the use of predatory outlets in academic evaluation. The suspenseful reality is this: African academics stand at a crossroads. One path leads to rapid local advancement built on fragile publishing foundations, offering short-term comfort but long-term invisibility. The other path is slower, more demanding, and often frustrating, but it leads to global relevance, intellectual exchange, and genuine academic mobility.

Predatory journals promise speed and certainty, but they quietly close doors. Quality publications demand patience and rigor, but they open the world. For African scholars seeking international jobs, collaborations, and influence, the choice is no longer optional it is existential. The future of African academia depends not just on producing knowledge, but on ensuring that knowledge travels, is trusted, and is seen. In this new year and beyond be different, be intentional, be visible, and be globally relevant. Good luck!

How may you obtain advice or further information on the article? 

Dr Timi Olubiyi is an expert in Entrepreneurship and Business Management, holding a PhD in Business Administration from Babcock University in Nigeria. He is a prolific investment coach, author, columnist, and seasoned scholar. Additionally, he is a Chartered Member of the Chartered Institute for Securities and Investment (CISI) and a registered capital market operator with the Securities and Exchange Commission (SEC). He can be reached through his Twitter handle @drtimiolubiyi and via email at [email protected] for any questions, feedback, or comments. The opinions expressed in this article are solely those of the author, Dr. Timi Olubiyi, and do not necessarily reflect the views of others.

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Game of Power: Throne Reclaim

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kano politics

By Abba Dukawa

Kano politics has been thrown into fresh uncertainty following reports that the Kano State Governor, Abba Yusuf, is planning to defect from the New Nigeria Peoples Party (NNPP) to the All Progressives Congress (APC).

For years, Rabiu Musa Kwankwaso aspired to be Kano’s undisputed political kingmaker. He only succeeded in realizing this ambition by installing his perceived political godson as the current governor of Kano State.

His earlier attempts had failed; notably, the current governor is the only candidate Kwankwaso attempted to install twice.

Even before the recent attempt at reclaiming the political and power throne by its rightful owner, there were widespread insinuations that the relationship between the political godfather and godson was far from cordial, despite both camps publicly maintaining that all was well.

The governor’s recent move to cross over to the ruling party has been strongly opposed by the state party leadership and the NNPP’s national leader, Senator Rabiu Musa Kwankwaso. This development has triggered internal disagreements within the NNPP, particularly between supporters of the governor and loyalists of the Kwankwasiyya movement.

Since news broke of Governor Abba’s intention to defect to the APC, claims have circulated  that he was acting with Kwankwaso’s consent.  Those who believed that Governor Abba planned to defect with Kwankwaso’s approval made a grave misjudgment.

This is not a coordinated plan; rather, it is a political conflict akin to that between a father and a son.

From a rational political standpoint, the situation reflects a deep and intense struggle—a clear attempt at reclaiming the throne between the Governor of Kano State and the leader of the Kwankwasiyya movement, Senator Rabi’u Musa Kwankwaso.

By all political indicators, the governor’s effort to reclaim the throne appears aimed at securing absolute control and liberating himself from total submission to the national leader of the Kwankwasiyya movement.

In response to the unfolding conflict, the NNPP national leader has intensified efforts to rally federal and state lawmakers, local government chairmen, and party structures to remain loyal to him. Kwankwaso’s reaction has been firm but defensive.

Kwankwaso, addressing them, reportedly stated that it was evident the governor was abandoning the NNPP for the APC and that any member wishing to follow him was free to do so. He reminded them that they won the election by divine grace alone, asking rhetorically: “Will the God who gave us power in 2023 not still be there in 2027?”

He has denied any involvement in defection plans and reaffirmed his loyalty to the NNPP and its ideology, warning supporters against what he described as “betrayal. However, events on the ground tell a different story, as several local government chairmen, along with state and federal lawmakers, appear to be gravitating toward the governor’s camp.

Ahead of his anticipated defection and in a bid to strengthen his political base, the governor has reportedly been working behind the scenes to secure the support of National Assembly members and NNPP members of the State House of Assembly and the local government council chairman.

Although no official statement has been issued by the governor’s office  since reports of the planned defection emerged, the body language of prominent government officials suggests that the plan is already in motion and that it is only a matter of time. So far, only the Speaker of the State Assembly, Yusuf Falgore, has publicly endorsed the governor’s planned defection. Sources also indicate that a significant number of local government chairmen have joined the governor’s defection train.

Blind Kwankwasiyya members ideologues fail to distinguish between political betrayal and the pursuit of independence. Politics, after all, is about survival and adaptation.

Most Kwankwasiyya members are youths. Where were they when Kwankwaso parted ways with Hamisu Musa, Musa Gwadabe, and Dauda Dangalan? Kwankwaso rose under mentorship before charting his own course. Where were they when Abubakar Rimi broke away from Aminu Kano in ’79-’80, pursuing his own path? When Abdullahi Ganduje split from Kwankwaso, he faced ridicule and insults.

These same critics should appreciate Abba Gida-Gida’s restraint in not publicly recounting the unpleasant experiences surrounding his emergence as governor under the NNPP.

The Kwankwaso–Abba conflict is, at its core, politics in its truest form—a search for solutions and self-determination. There is a clear distinction between betrayal in politics, the pursuit of solutions, and the quest for independence from total submission.

If Governor Abba succeeds in taking the bulk of NNPP’s structure to APC, it’ll be a major symbolic blow to Kwankwaso’s influence . It seems Kwankwaso’s biggest fear is Abba taking the state with him, leaving him with a movement without a state .

The plan Abba defection from the New Nigeria Peoples Party (NNPP) to the All Progressives Congress (APC) could reshape Kano’s politics significantly- APC regains dominance in Kano, strengthening its position ahead of 2027- NNPP’s national relevance takes a hit, struggling to recover from losing its only governor Kwankwasiyya faces a tough test without state power, potentially losing influence. New alliances might emerge as Yusuf’s move triggers political recalibrations across the North.

Game of Power: Throne Reclaim

Dukawa writes from Kano and can been reached via [email protected]

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How Nigeria’s New Tax Law Could Redefine Risk in the Banking Sector

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Nigeria’s New Tax Law

By Blaise Udunze

Nigeria’s new tax identification portal goes live nationwide tomorrow, Friday, January 1, 2026, marking a pivotal moment in the country’s fiscal and financial governance. Designed to modernise tax administration and strengthen taxpayer identification, the reform reflects a decisive shift in economic strategy by a government grappling with shrinking oil revenues, rising public debt, and widening fiscal deficits.

At the centre of this shift is a deeper integration of identity systems, banking data, and tax administration, most notably the adoption of the National Identification Number (NIN) as a tax identification mechanism for operating bank accounts. In parallel, banks will also begin charging a N50 stamp duty on electronic transfers of N10,000 and above, following the implementation of the Tax Act.

Individually, these measures may appear modest, even reasonable. Collectively, however, they signal a fundamental reordering of the relationship between the state, banks, and citizens with far-reaching implications for banking business, customer trust, financial inclusion, and credit creation.

Banks at the Centre of Fiscal Enforcement

Under the new tax framework, Nigerian banks are no longer merely financial intermediaries or corporate taxpayers. They are increasingly positioned as collection agents, reporting hubs, and frontline enforcement points for government revenue policy.

The linkage of NIN to tax compliance, combined with transaction-based stamp duties, reinforces a stark reality that the banking system has become the most visible and accessible channel through which the state now extracts revenue from citizens.

This expanded role exposes banks to a new layer of risk not just financial or operational, but social, reputational, and political risks that extend far beyond balance sheets.

A Structural Shift in the Banking, Tax Relationship

Historically, banks played a facilitative role in tax compliance, primarily through payment processing and remittance support. The use of NIN as a tax identifier marks a structural departure from this model.

Bank accounts are no longer merely financial tools; they are becoming gateways to tax visibility.

This shift fundamentally alters the risk profile of the banking business. Banks are now exposed not only to credit, market, and operational risks, but also to heightened social backlash, reputational damage, and political sensitivity, arising from their expanded enforcement role.

Account Friction and Slower Customer Onboarding

One of the earliest and most visible consequences of NIN-based tax identification is increased friction in account opening and maintenance.

Consequently, in a real sense, millions of Nigerians will continue to face challenges with the NIN system, including delays in enrolment and correction, biometric mismatches as well as  inconsistencies between NIN, BVN, and bank records.

For banks, this translates into slower onboarding processes, higher rates of account restriction or rejection, and increased congestion across branches and digital platforms.

What should be a growth engine for deposit mobilisation instead becomes a bottleneck, resulting in lost customers, fewer transactions, and weakened scale advantages in an increasingly competitive banking environment.

Banks as the Face of an Unpopular Tax Regime

Perhaps the most underappreciated consequence of the new tax regime is the escalation of customer hostility toward banks.

When accounts are flagged, restricted, or subjected to enhanced scrutiny, customers rarely direct their frustration at tax authorities or policymakers. Instead, they confront the most visible institution in the chain, their bank.

Banks are increasingly blamed for account freezes, accused of colluding with government, and perceived as punitive rather than service-oriented institutions. This hostility is particularly pronounced among informal sector operators, small traders, artisans, and self-employed professionals with irregular income streams.

In a low-trust economy such as Nigeria’s, perception often outweighs regulation. Banks risk becoming the public face of coercive taxation, absorbing reputational damage for policies they neither designed nor control.

Erosion of Trust in the Banking Relationship

Banking fundamentally depends on trust that deposits are safe, transactions are private, and institutions act in customers’ best interests.

When NIN becomes a tax enforcement gateway, that trust begins to fray. Banks are no longer seen primarily as custodians of savings, enablers of enterprise, or neutral financial intermediaries. Instead, they are increasingly perceived as extensions of tax authorities, surveillance nodes, and compliance police.

Once trust erodes, customer behaviour adjust often in ways that undermine the formal financial system itself.

The Hidden Impact of the N50 Stamp Duty

The introduction of a N50 stamp duty on electronic transfers of N10,000 and above may appear trivial. In practice, it carries outsized implications.

For many Nigerians, especially low- and middle-income earners, electronic transfers are not discretionary transactions. They are salary payments, family support remittances, SME operating expenses, and routine commercial settlements.

Customers rarely distinguish between government levies and bank charges. The stamp duty will therefore be perceived as yet another bank fee, deepening resentment toward institutions already accused of excessive charges.

Behaviourally, customers may respond by breaking transactions into smaller amounts, increasing cash usage, or migrating to informal transfer channels, distorting transaction patterns and weakening the efficiency of the digital payments ecosystem.

Although banks merely collect the duty on behalf of the government, they will once again bear the reputational cost.

Threat to Deposit Mobilisation and Liquidity

Fear of tax exposure is a powerful behavioural driver. As NIN becomes closely associated with tax scrutiny and transaction charges mount, many customers are likely to reduce account balances, avoid lump-sum deposits, split transactions to stay below thresholds, or move funds outside the banking system entirely.

For banks, the consequences are clear, as these will result in slower deposit growth, volatile liquidity positions, and reduced capacity to fund loans.

Deposit mobilisation is the lifeblood of banking. Any policy that discourages formal savings weakens banks’ intermediation role and, by extension, the broader economy.

Reversal of Financial Inclusion Gains

Nigeria has invested more than a decade in expanding financial inclusion through agent banking, digital wallets, and tiered KYC frameworks. The use of NIN as a tax trigger threatens to reverse these gains.

Many newly banked individuals, particularly those at the base of the economic pyramid, may abandon formal accounts, revert to cash-based transactions, or rely on informal savings mechanisms.

The irony is stark as an identifier designed to formalise the economy may inadvertently push activity back into informality.

Rising Compliance, Legal, and Technology Costs

Operationally, integrating NIN as a tax identifier significantly increases banks’ compliance burden. However, institutions are expected to synchronise multiple databases, resolve inconsistencies at scale, implement continuous monitoring systems while also managing customer disputes arising from mismatches or wrongful flags.

The challenges inherent in these demands require heavy investment in IT infrastructure, expanded compliance teams and enhanced cybersecurity. The costs either erode profitability or are passed on to customers, further fuelling public resentment.

Credit Creation and Economic Growth at Risk

Reduced deposits, higher compliance costs, reputational strain, and customer attrition converge on a single outcome that mainly constrained lending capacity.

There is no two ways about this, banks under sustained pressure will tighten credit standards, reduce SME and consumer lending, and favour low-risk government securities. The ripple effects include slower job creation, constrained entrepreneurship, and, on a dangerous level, it leads to weaker economic growth, ultimately undermining the very revenue base the tax reform seeks to expand.

Revenue Without Ruin

No doubt, linking NIN to tax identification and expanding transaction-based levies may enhance government visibility over economic activity, but in reality they carry significant unintended consequences for banking business.

They risk weakening customer trust, undermining deposit mobilisation, reversing financial inclusion gains, increasing operational and reputational risks, and constraining credit growth.

Banks do not oppose taxation. What they caution against is turning financial inclusion infrastructure into a blunt instrument of tax enforcement without adequate safeguards.

For the policy to succeed without damaging the banking system, regulators must ensure clear thresholds and exemptions, strong data protection guarantees, phased implementation and ensure sustained public education to redirect hostility away from banks.

Ultimately, the critical question is not legislative readiness but execution, especially coordination across institutions, technological preparedness and the capacity to prevent unintended disruption to businesses and citizens alike. The authorities must understand that when revenue meets risk, wisdom lies in balance.

Blaise, a journalist and PR professional, writes from Lagos and can be reached via: [email protected]

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