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BRICS Mapping De-dollarization for Emerging New World

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BRICS De-dollarization

By Professor Maurice Okoli

For the five BRICS (Brazil, Russia, India, China and South Africa) members, de-dollarization has become the latest common buzzword in English. Long before the highly-praised Johannesburg’s 15th BRICS summit, considered a very important step forward on the way to deepening interaction in the sphere of trade and investment with the nations of Global South, all the five BRICS leaders have made it their priority task to find their common currency so as not to depend on the United States dollar in the emerging new world.

Understandably, the primary reason is further delineating from United States hegemony and global dominance. In fact, the BRICS desire to facilitate global de-escalation, assist each other in solving issues concerning mutual interests and, in future, transact businesses in what they now popularly refer to as BRICS common currency. This question is already enshrined in the final comprehensive document that sets forth the general guidelines and principles of the association after the historic August 22-24 meeting held in South Africa.

South Africa was the summit host. Chinese and Brazilian presidents, the Indian Prime Minister, the Russian Foreign Minister, and leaders and representatives from some 50 other countries are in attendance. On August 22, Russian President Vladimir Putin addressed the BRICS business forum, among several significant issues highlighted the accelerating momentum of de-dollarization.

In a virtual address, Putin also criticized the sanctions policy of Western states, saying such practice is seriously affecting the international economic situation. He said the unlawful freezing of assets of sovereign states constitutes a violation of free trade and economic cooperation rules.

Putin said that efforts were in progress to create an international reserve currency based on a basket of currencies of the association’s member countries. Some experts believe such a currency may protect the BRICS countries from sanction risks associated with settlements in dollars and euros.

The objective and irreversible process of de-dollarizing the economic ties is gaining pace. Russia has been working hard to fine-tune effective mechanisms for mutual settlements and monetary and financial control. As a result, the share of the US dollar in export and import operations within BRICS is declining: last year, it stood at only 28.7 per cent, according to the Russian leader.

Russia has always advocated for switching trade between member countries away from the U.S. dollar and into national currencies, a process in which the BRICS New Development Bank would play a big role. “The objective, irreversible process of de-dollarizing our economic ties is gaining momentum,” he said.

He also urged BRICS to increase its role in the international monetary system and expand the use of national currencies. Noticeably, Russia, being one of the founding patrons of BRICS, acts as a unifying force behind and in the organization and largely determines that its role is strengthened for the future.

President of the People’s Republic of China, Xi Jinping, attended the BRICS Summit, for the third time, held in South Africa. The distinctive difference is that at this 2023 summit, the world has entered a new period of turbulence and rapid transformation.

“We gather at a crucial time to build on our past achievements and open up a new future for BRICS cooperation. We should deepen business and financial cooperation to boost economic growth.,” he emphasized. “We need to leverage the role of the New Development Bank fully, push forward reform of the international financial and monetary systems, and increase the representation and voice of developing countries.”

An English version of the article by Chinese President Xi Jinping titled “Sailing the Giant Ship of China-South Africa Friendship and Cooperation Toward Greater Success” widely published ahead of the 15th BRICS Summit in South African media, including The Star, Cape Times, The Mercury as well as Independent Online, also underlined the practical concept of multilateralism and push for the building of a more just and equitable international order.

South African companies are also racing to invest in the Chinese market to seize the abundant business opportunities, and they have made important contributions to China’s economic growth. The China-South Africa relationship is standing at a new historical starting point. It has gone beyond the bilateral scope and carries increasingly important global influence.

China and South Africa should be fellow companions sharing the same ideals. As an ancient Chinese saying goes, “A partnership forged with the right approach defies distance; it is thicker than glue and stronger than metal and rock.” Therefore, there is a need to increase experience sharing on governance and firmly support each other in exploring a path to modernization that suits both national conditions.

“We should fear no hegemony and work with each other as real partners to push forward relations amid the changing international landscape. In the face of the profound changes unseen in a century, a strong China-Africa relationship will provide more fresh impetus to global development and ensure greater stability. Looking ahead into the next 25 years,” he wrote in the article.

Indian Prime Minister Narendra Modi also underlined the current significance of BRICS in dealing with the world’s tensions and disputes, but most importantly, de-dollarization amid economic challenges. “In 2009, when the first BRICS summit was held, the world was just coming out of a massive financial crisis. At that time, BRICS emerged as a ray of hope for the global economy. In the present times, to shape strategies for economic cooperation, in particular ways of increasing trade settlements in local currencies and BRICS expansion.”

Brazilian President Luiz Inacio Lula da Silva believes the world will see massive changes in the coming years. “When we talk about Brazil and BRICS, we show that it is possible to create a new world. We don’t want to argue with anyone. We want integration between continents and equal conditions for all,” Lula da Silva said.

According to him, establishing partnerships between private sectors is a very relevant dimension of BRICS that gives life and continuity to the relations between the countries; participation in the global economy has been expanding since the first Summit of Heads of State and Government. “We have already surpassed the G7 and now account for 32% of the world GDP in purchasing power parity. Projections indicate that emerging and developing markets will present the highest growth rates in the coming years,” he explained in his speech.

According to the IMF, while growth in industrialized countries is expected to drop from 2.7% in 2022 to 1.4% in 2024, the expected growth for developing countries is 4% this year and the next. This shows that the economy’s dynamism is in the Global South – and BRICS is its driving force. Brazil’s total trade with BRICS increased from US$48 billion in 2009 to US$178 billion in 2022 – a 370% growth since the group was created.

Brazil’s BRICS Direct Foreign Investment stock increased 167% between 2012 and 2021, reaching 34.2 billion dollars. Today, almost 400 companies from the bloc operate in Brazil. The decision to establish the New Development Bank was a milestone in effective collaboration among emerging economies. The joint bank must be a global leader in financing projects that address the most pressing challenges.

In arguing, the president pointed to the BRICS New Development Bank (NDB) as a way to offer its financing alternatives suited to the needs of developing countries. “The creation of a currency for trade and investment transactions between BRICS members increases our payment options and reduces our vulnerabilities”, he said, reinforcing that developing countries need an international financial system that helps implement structural changes instead of feeding inequalities.

By diversifying payment sources in local currencies and expanding its network of partners and members, the NDB is a strategic platform to promote cooperation among developing countries. In this strategy, engagement with the African Development Bank will be central. At the multilateral level, BRICS stands out as a force favouring a fairer, more predictable, and equitable global trade. As of December, Brazil will occupy the presidency of the G20. The presence of three BRICS members in the G20 Troika will be a great opportunity for us to advance issues of interest to the Global South.

Reading through various reports, Peter Koenig, a geopolitical analyst and also a non-resident Senior Fellow of the Chongyang Institute of Renmin University in Beijing and a former Senior Economist at the World Bank, convincingly argues that many see the BRICS as the salvation from the West, from sanctions, from the dollar impositions, from debt enslavement – from trading restrictions… from outright theft of their currency reserves in foreign countries.

As a byline to the all too frequent western theft of reserve funds and gold…! But is this the purpose of the BRICS – providing shelter from the last onslaught of the West, led by the United States and her vassals – the Europeans? And is it right – that some of the BRICS leaders are constantly vacillating between the US and the BRICS solid core – China and Russia? Modi, for example, seems to be leaning towards whatever camp – West or East – he feels gives him more advantages.

Koenig further explained that many BRICS countries still depend on the US dollar as the bulk of their reserve currency, the main trade currency. De-dollarization for many is not happening overnight. Therefore, a common strategy is needed. To begin with and to avoid the dollar – trading among BRICS members (and even outside BRICS) with local currencies instead of dollars. This is relatively easy; for example, China and Argentina have done it for a long time. In the short-to-medium term – what might help and may become a necessity is having a common BRICS Trading Currency.

There has been a gradual shift away from trading in US dollars, and instead, countries adopted trading in their local currencies or in a currency of common use by trading partners, for example, the Chinese Yuan. Latin America – especially Argentina, Brazil, Mexico, and Venezuela – consistently uses local currencies or the Chinese Yuan to avoid the dollar. Avoiding the dollar is foremost for its protection from US sanctions. Increasingly, more countries will use this new trading mode – equitable and peaceful.

The Turkish edition Dunya notes that since the United States imposed financial sanctions on Russia last year, de-dollarization has gained momentum. The BRICS countries forced transactions using non-dollar currencies. After the start of the Ukrainian conflict, Russia, Iran, Brazil, Argentina, and Bangladesh went for broke against the United States, using the Chinese yuan instead of the dollar in trade.

Four Reasons for De-dollarization:

— Over-reliance on a single currency, changes in US monetary policy, and possible US sanctions or restrictions carry risks. In addition, the US government has run a large budget deficit for many years. And this raises concerns about inflation and the value of the dollar.

— The United States has been involved in many geopolitical conflicts in recent years, primarily the wars in Iraq and Afghanistan. These conflicts have resulted in heightened tensions between the US and other countries, making some states less willing to use the dollar.

— China, the world’s second-largest economy and an increasingly influential player in world trade is encouraging the use of its currency as an alternative to the dollar.

— Cryptocurrencies such as bitcoin, which are not subject to government control, have become attractive to those looking for an alternative to the dollar.

There are so many arguments and discussions about the question of global currency. But one more interesting analytical conclusion is here. Michael G. Plummer, Director at SAIS Europe and Eni Professor of International Economics at Johns Hopkins University, believes the global system gains from having an internationally accepted currency like the US dollar as a medium of exchange, unit of account and store of value. But its role will diminish at the margin at a rate that will be the function of exogenous factors, such as changes in the international marketplace, and endogenous factors, such as how the United States faces its financial and trade challenges.

As widely seen across the world, the BRICS bloc is rapidly gathering stronger momentum for a more democratic and multipolar world order that respects the sovereignty, equality, and diversity of all nations. The United States and Western allies often deeply underestimate its future growth and role on the global stage but have heightened interests in shaping its instruments, such as the BRICS Bank, which is likened to IMF and the World Bank, becoming the alternative organization, especially for the Global South.

Notwithstanding all the arguments, views and observations, Russia, isolated by the United States and Europe over its invasion of Ukraine, is keen to show Western powers it still has friends. In contrast, Brazil and India have forged closer ties with the West.  There are still justifiable arguments, though, that the group’s members have long been thwarted by some internal divisions and, to some extent, a lack of coherent vision.

In Johannesburg, BRICS, under the 2023 chairship of South Africa, Cyril Ramaphosa, has achieved an appreciable milestone. As stipulated in the 10-point joint declaration, BRICS will continue, through its collective efforts, working steadily towards shaping an alternative new system across the ASEAN, Africa and Trans-Atlantic. BRICS, with an additional six members, is now home to more than 40% of the world’s population and more than a quarter of global GDP, the bloc’s ambitions of becoming a global political and economic player. As the new Chair, Russia will hold the next BRICS summit in Kazan in October 2024.

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

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via [email protected]

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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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