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How To Apply For a Business Grant In 2025 | A Comprehensive Guide

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Business Grant In 2025

If you’re seeking to access significant funds for your business, you have to learn to apply for a business grant. Getting a business grant can be a game-changer for entrepreneurs. It provides the necessary financial boost to fuel growth, innovation, and expansion. To get a business grant, you’ll have to learn how to write a rant proposal for your business.

The process of applying for and writing a compelling grant proposal for your business can be daunting. In this article, we have provided you with a comprehensive guide that’ll help you write a compelling business grant in 2025.

Key Takeaway

  • A business grant is awarded to businesses that have projects that align with the grant giver’s criteria
  • Have a strong enough reason for applying before going for any business grant
  • Your chances of success increase when you tailor your grant proposal to the type of grant you’re applying for.

What is a Business Grant?

A business grant is an award, usually financial, given by an entity to a company to facilitate a goal or incentivize performance.

It is a type of financial aid awarded to businesses, typically for specific purposes such as research, development, or community outreach. Unlike loans, business grants don’t need to be repaid. They’re often provided by government agencies, foundations, or non-profit organizations.

How to apply for a business grant in 2024

What Are The Types of Business Grants Available?

before making any move to apply for a business grant, you need to understand the various types available. Business grants may differ from country to country, but there are basic types you can find anywhere in the world. Business grants are specifically given to businesses that meet certain criteria determined by the grant giver.

Generally, here are the types of grants available;

1. Government Grants

These grants are offered by federal, state, and local governments. They often focus on specific industries, regions, or business goals. In a bid to help businesses thrive and in turn grow the economy, the government provides grants to qualified businesses. These rants may be industry-based or region-based.

2. Foundation Grants

Foundations are non-profit organizations that distribute funds for various purposes, including business grants. Their grants can be more flexible and tailored to specific projects. Some individuals set up foundations that come in as either angel investors or distributors of business grants

3. Corporate Grants

Some corporations offer grants to support businesses, particularly those aligned with their corporate social responsibility goals. These corporate organizations assess the businesses that apply for the grants they offer to determine which ones are deserving.

If you learn to write a business grant the proper way following the tips shared in this article, you’ll stand a better chance at success.

How  Can I Apply For A Business Grant in 2025?

To apply for a business grant in 2024 successfully, you have to learn how to write a grant proposal. Writing a great grant proposal for a business is vital for getting new funding. The question is, where do you begin especially if you haven’t done this before? This comprehensive guide will show you exactly how to write and win business grants in 2024.

How to apply for a business grant in 2024

1. Know Your Why

There has to be a clear purpose for applying for a grant, it is the most important thing to do before you get too far into the application process. As you plan to apply for a business grant, you must understand clearly your reason. Many business owners make the mistake of looking for grants just to get a cash injection and run their businesses as usual without a real project that requires funding.

Unfortunately, grants are awarded to fund projects that align with the grantmaker’s objectives, and before you get too far into looking for grants, you need a project worth funding.

Grantmakers like the MacArthur Foundation in Nigeria want to support projects with a clear purpose and demonstrable potential for impact in the areas they operate. Before you apply for a business grant, honestly evaluate your proposition thus;

  • Identify the specific problem your project is solving
  • Evaluate your approach, find out its uniqueness, and ascertain whether it is innovative
  • Outline the potential outcomes as well as benefits to your target community.
  • Find evidence of community support or collaboration. Your project has to be supported by others, this shows proof of acceptance.

2. Identify Suitable Grants

The next step is to identify grants that align with your business goals and mission. You have to carefully research so that you know whether or not to apply for a business grant There are lots of grants out there for different types of businesses, so go for those that are best suited for your business. This increases your chances of success.

Here’s how to do it:

  • Research: Carefully explore online databases, government websites, and industry-specific organizations for grants that match your business needs. In Nigeria, you can check out TEF grants.

Successful grant writers are thorough with research. You should do a deep dive into the background, priorities, and past recipients of the grant you are applying for. Successful applications will always leave clues that will help your business grant proposal.

  • Consider Eligibility: Ensure your business meets the specific requirements, such as industry, location, and revenue. You can check your business eligibility here. Some business grants come with specified amounts and eligibility criteria, it is your duty to ensure that your business meets the criteria for any grant you apply for
  • Understand Priorities: Pay attention to the grantor’s focus areas. Grant proposals that address their priorities are more likely to be funded. For example, some foundations may prioritize grants for environmental sustainability or education.

3. Craft a Strong Proposal

This is crucial when you want to apply for a business grant. Once you’ve identified suitable grants, the next step is to craft a compelling proposal. Crafting a compelling proposal takes strategic steps which have been listed below. You’ll need to be thorough at every phase.

Always keep in mind that there may be hundreds of other businesses gunning for the same grant as you. Whatever you do, you have to stand out. When you set out to apply for a business grant, you must consider it serious business.

When crafting a strong and compelling proposal, here’s what to include:

  • Executive Summary: This is a brief overview of your business, the problem you’re solving, the proposed solution, and the requested funding. It should be concise and engaging.
  • Problem Statement: Your problem statement is crucial in your application, you should handle it meticulously. Clearly define the problem your business addresses and its impact. Use data and evidence to support your claims.

Your problem statement could be the deciding factor whether or not you get the grant you seek. You must ensure you are solving a real problem and that this section of your grant is carefully articulated.

  • Proposed Solution: Here’s where you lay out that beautiful solution you have. Detail how your business will solve the problem and create value. Explain the unique aspects of your approach and how it differs from competitors. Do this with every ounce of carefulness, paying attention to every detail.

Your proposed solution could become your unique selling point (USP), you have to do it right.

  • Budget: Create a detailed budget that accurately reflects the costs of your project. Include a breakdown of expenses, such as salaries, equipment, and materials. This budget must not be more than the sum to be awarded by the grant. It should also not be ridiculously low. Rather, plan with the grant amount.

The grantmaker would want to know how you plan to utilize the grant if given.

  • Impact Assessment: Explain how the grant will benefit your business, your community, and the industry. Quantify the expected outcomes and use metrics to measure success. Do not joke with data and the right metrics. Numbers and the right projections could just be the game-changers for you
  • Timeline: Every project must have a timeline. Provide a clear timeline for implementation and expected outcomes. This will demonstrate your ability to manage the project effectively.
  • Letters of Support: Include letters of support from stakeholders, such as customers, partners, or community leaders. These can strengthen your proposal and provide credibility.

4. Tailor Your Proposal

You need to recognize that every grant is unique in its own way. So when you apply for a business grant, ensure to tailor your proposal to each specific application. There is no one-size-fits-all when it comes to business grant writing.

Here are some tips to tailor your proposal to any grant you apply for:

  • Customize Your Proposal: Every time you apply for a business grant, make sure to adapt your proposal to the specific requirements and priorities of the grant you are applying for. Highlight the alignment between your business and what the grantor seeks to achieve.
  • Highlight Your Unique Value: What you need to do at this point is to emphasize what sets your business apart and why you deserve the grant. Apply for a business grant with a focus on your competitive advantage and the unique benefits your solution offers. This gives you an edge.
  • Address Potential Challenges: A good business owner anticipates challenges and prepares for them. When you apply for a business grant, show that you anticipate potential obstacles to achieving your project goals and highlight how you plan to address them. This demonstrates your preparedness and ability to overcome challenges.

5. Proofread and Edit

This phase is crucial and shouldn’t be skipped. Never be in a hurry to turn in your grant proposal without a proper edit and proofreading. It is best to get a professional to handle this phase of your proposal. It is one thing to apply for a business grant, it is another for that proposal to be properly done.

You can not afford to go wrong at this phase, not when you’re almost over the finish line.

Here are some things to look out for when editing and proofreading;

  • Accuracy: Ensure all information is accurate, consistent, and free of errors.
  • Clarity: Write in a clear, concise, and engaging style. Avoid jargon or technical terms that may be unfamiliar to the reviewers.
  • Professionalism: Present a professional and polished appearance. Use high-quality formatting and avoid typos or grammatical errors.

6. Submit on Time

Whatever you do, please be time conscious. You might apply for a business grant the best way you know how to, but if you miss the deadline, your efforts will be in vain. Here are things you must take into consideration when you apply for a business grant;

  • Deadlines: Strictly adhere to the submission deadlines. Late submissions will typically not be considered.
  • Follow Instructions: Carefully follow the grantor’s guidelines and requirements. This includes formatting, submission methods, and any additional documents that may be required.

Conclusion

Securing a business grant in 2025 will give you the boost you need to accelerate your business processes.

While several businesses are competing for the limited grants available, following the tips shared in this article will give you a competitive advantage. Do not forget to tailor your grant proposal to the type of grant you’re applying for.

Frequently Asked Questions

1. What is a business grant?

A business grant is a type of financial aid awarded to businesses for specific purposes. These purposes include research, development, or community outreach. Grants are not like loans, they do not need to be repaid.

What are the eligibility criteria for business grants?

Eligibility criteria vary depending on the grantor and the specific grant program. However, common requirements include business type, size, location, and project goals.

How can I increase my chances of getting a grant?

Building relationships with potential grantors, networking with other grant seekers, and following up after submitting your application can increase your chances of success.

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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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