Business
Tax Reforms, NELFUND and State Allocations: Are Nigerian States Ready to Deliver?
Tax Reforms, NELFUND and State Allocations: Are Nigerian States Ready to Deliver?
By George Omagbemi Sylvester | Published by SaharaWeeklyNG.com
When President Bola Ahmed Tinubu signed the landmark tax reform bills into law on June 26, 2025, it signaled a critical turning point in Nigeria’s fiscal history. It was a bold attempt to restructure the nation’s underperforming tax system, expand the national revenue base and empower sub-national entities through an equitable redistribution of funds. The reforms didn’t just aim to increase federal control or raise revenue, they marked the beginning of a new power shift toward the states.
Under the new law, the tax-to-GDP ratio is expected to rise from its current abysmal 10.8% (one of the lowest in Africa) towards a more sustainable and development-oriented figure. The reforms created the Nigeria Revenue Service (NRS), replacing the Federal Inland Revenue Service (FIRS), streamlined the tax administration framework, introduced a development levy and revised the Value Added Tax (VAT) allocation formula from 15% to the federal government to just 10%, while raising the states’ share from 50% to 55%.
This is not just fiscal reform; it is pure federalism, reborn.
The critical question remains: What are Nigerian states doing with this golden opportunity? Are they equipped, ready and willing to translate this fiscal latitude into tangible social and economic benefits for their people? Or will they squander it as they have done with past bailouts and interventions?
The NELFUND Promise: Bridging Education and Economic Inequality
The Nigerian Education Loan Fund (NELFUND), launched in 2024, is a flagship initiative under the “reform” umbrella. Designed to provide interest-free loans to indigent students across federal tertiary institutions, it aims to bridge the financial gap for millions of Nigerians seeking education. The new development levy introduced in the tax reform bills (ranging from 2% to 4% on eligible taxpayers) will partially fund NELFUND and other agencies like TETFund, NITDA and NASENI.
The sustainability and reach of NELFUND depend not just on the federal government’s policy on the commitment of state governments to complement and support the vision.
Some states are stepping up. Others are asleep.
States Rising to the Challenge
Lagos State stands miles ahead of the pack. The Lagos Internal Revenue Service (LIRS) is leveraging fintech solutions to widen the tax net, improve compliance and plug revenue leakages. Governor Babajide Sanwo-Olu has already launched a multi-billion-naira skills development initiative, partially funded through the additional VAT allocation, with special focus on vocational training, public schools and digital education. Lagos is also establishing NELFUND liaison offices in tertiary institutions to simplify access for students.
Oyo State, under Governor Seyi Makinde, has taken a bold stance. A new law mandates the transparent publication of VAT inflow and expenditure every quarter. The state has committed 25% of its new allocation to the education sector, directly aligning with the NELFUND goal of human capital development. Additionally, Oyo has established an inter-ministerial committee to facilitate the disbursement and monitoring of student loans.
Kano State initially resisted the reforms, citing the unfair advantage of consumption-heavy southern states. However, it has since launched aggressive taxpayer education campaigns, e-registration for personal income tax and SME support centers to boost revenue. According to Dr. Auwalu Isa, a fiscal policy expert at Bayero University, “Kano’s shift reflects the realization that development is no longer about federal handouts but internal innovation.”
Rivers State and Delta State, flush with revenue from oil and trade, are now investing in logistics and infrastructure projects funded by VAT allocations. Rivers recently announced the construction of a new industrial park in Eleme, using part of its windfall. Delta has committed a percentage of its new income to health and education sector revitalization.
Southeast Innovation
Enugu State, under Governor Peter Mbah, is pioneering digital tax remittance platforms in partnership with private sector actors. The goal is simple: Eliminate Cash Handling, improve collection efficiency and ensure every kobo is accounted for. The Enugu government has also introduced tax incentives for small businesses, as a way to foster voluntary compliance.
In Anambra State, Governor Charles Soludo is championing tax modernization, introducing blockchain-based auditing tools. He recently remarked: “Tax reforms without state participation is like building a skyscraper on sand.”
Imo and Abia states have also rolled out tax identification systems linked to national databases, enabling better targeting of welfare and education funding.
The Northern Adjustment
The North, particularly states like Gombe, Bauchi and Zamfara, have been the most apprehensive. Lower consumption patterns mean lower VAT returns under the new formula. Yet, Gombe State has partnered with the World Bank to develop digital tax infrastructure and improve Internally Generated Revenue (IGR). Bauchi is introducing community-based revenue generation tied to agricultural markets.
Governor Inuwa Yahaya of Gombe, who also chairs the Northern Governors Forum, recently stated:
“It is now clear to us that we must stand on our own two feet. The era of dependency must end.”
Scholars and Experts Weigh In
“Reforming Nigeria’s tax structure is not just an economic necessity; it is a political revolution. States must now wake up to their responsibilities.”
~ Prof. Uche Uwaleke, President, Association of Capital Market Academics of Nigeria (ACMAN)
“Tax is the price we pay for civilization. States cannot demand development without contributing to its costs.”
~ Dr. Sarah Ekeh, University of Nigeria Nsukka, Faculty of Social Sciences
“This is the best fiscal opportunity Nigeria has had in decades. If states waste it, the blame lies not in Abuja, but in their own complacency.”
~ Waziri Adio, Executive Director, Agora Policy
Are States Prepared?
Despite early signs of progress, many states remain reactive rather than proactive. They lack capacity, innovation and political will. Several governors have yet to present comprehensive plans for utilizing their increased allocations. Others are diverting the funds toward unsustainable political spending and inflated contracts.
The Federal Ministry of Finance has warned that misuse of the new tax inflows will attract federal audits and possible funding restrictions. Already, civil society groups like BudgIT and SERAP are demanding real-time transparency in fund allocation and student loan disbursement.
Challenges That Linger
Low Tax Literacy: Millions of Nigerians still view tax as a punishment rather than a civic duty.
Weak Revenue Collection: Manual systems remain in place in many rural states, with little investment in technology.
Political Interference: Many revenue boards are still run as party patronage slots not as professional institutions.
Regional Disparities: Northern states still trail behind in consumption and digital literacy, putting them at a disadvantage under the new VAT structure.
Key Takeaway: From Abuja to the Grassroots
Tax reforms, NELFUND and increased state allocations represent a rare convergence of opportunity and necessity. This is not Abuja’s fight alone. The success or failure of these initiatives depends on how well the 36 state governments rise to the occasion.
The time for excuses is over. The federal government has thrown the lifeline. What states do with it will determine whether Nigeria leaps forward or collapses under the weight of yet another failed reform.
History will not forgive those who sleep through a revolution.
By George Omagbemi Sylvester
Published by SaharaWeeklyNG.com
Alpha Morgan to Host 19th Economic Review Webinar
In an economy shaped by constant shifts, the edge often belongs to those with the right information.
On Wednesday, February 25, 2026, Alpha Morgan Bank will host the 19th edition of its Economic Review Webinar, a high-level thought leadership session designed to equip businesses, investors, and individuals with timely financial and economic insight.
The session, which will hold live on Zoom at 10:00am WAT and will feature economist Bismarck Rewane, who will examine the key signals influencing Nigeria’s economic direction in 2026, including policy trends, market movements, and global developments shaping the local landscape.
With a consistent track record of delivering clarity in uncertain times, the Alpha Morgan Economic Review continues to provide practical context for decision-making in a dynamic environment.
Registration for the 19th Alpha Morgan Economic Review is free and can be completed via https://bit.ly/registeramerseries19
It is a bi-monthly platform that is open to the public and is held virtually.
Visit www.alphamorganbank to know more.
GTBank Launches Quick Airtime Loan at 2.95%
Guaranty Trust Bank Ltd (GTBank), the flagship banking franchise of GTCO Plc, Africa’s leading financial services group, today announced the launch of Quick Airtime Loan, an innovative digital solution that gives customers instant access to airtime when they run out of call credit and have limited funds in their bank accounts, ensuring customers can stay connected when it matters most.
In today’s always-on world, running out of airtime is more than a minor inconvenience. It can mean missed opportunities, disrupted plans, and lost connections, often at the very moment when funds are tight, and options are limited. Quick Airtime Loan was created to solve this problem, offering customers instant access to airtime on credit, directly from their bank. With Quick Airtime Loan, eligible GTBank customers can access from ₦100 and up to ₦10,000 by dialing *737*90#. Available across all major mobile networks in Nigeria, the service will soon expand to include data loans, further strengthening its proposition as a reliable on-demand platform.
For years, the airtime credit market has been dominated by Telcos, where charges for this service are at 15%. GTBank is now changing the narrative by offering a customer-centric, bank-led digital alternative priced at 2.95%. Built on transparency, convenience and affordability, Quick Airtime Loan has the potential to broaden access to airtime, deliver meaningful cost savings for millions of Nigerians, and redefine how financial services show up in everyday life, not just in banking moments.
Commenting on the product launch, Miriam Olusanya, Managing Director of Guaranty Trust Bank Ltd, said: “Quick Airtime Loan reflects GTBank’s continued focus on delivering digital solutions that are relevant, accessible, and built around real customer needs. The solution underscores the power of a connected financial ecosystem, combining GTBank’s digital reach and lending expertise with the capabilities of HabariPay to deliver a smooth, end-to-end experience. By leveraging unique strengths across the Group, we are able to accelerate innovation, strengthen execution, and deliver a more integrated customer experience across all our service channels.”
Importantly, Quick Airtime Loan highlights GTCO’s evolution as a fully diversified financial services group. Leveraging HabariPay’s Squad, the solution reinforces the Group’s ecosystem proposition by bringing together banking, payment technology, and digital channels to deliver intuitive, one-stop experiences for customers.
With this new product launch, Guaranty Trust Bank is extending its legacy of pioneering digital-first solutions that have redefined customer access to financial services across the industry, building on the proven strength of its widely adopted QuickCredit offering and the convenience of the Bank’s iconic *737# USSD Banking platform.
About Guaranty Trust Bank
Guaranty Trust Bank (GTBank) is the flagship banking franchise of GTCO Plc, a leading financial services group with a strong presence across Africa and the United Kingdom. The Bank is widely recognized for its leadership in digital banking, customer experience, and innovative financial solutions that deliver value to individuals, businesses, and communities.
About HabariPay
HabariPay is the payments fintech subsidiary of GTCO Plc, focused on enabling fast, secure, and accessible digital payments for individuals and businesses. By integrating payments and digital technology, HabariPay supports innovative services that make everyday financial interactions simpler and more seamless.
Enquiries:
GTCO
Group Corporate Communication
[email protected]
+234-1-2715227
www.gtcoplc.com
Business
BUA Group, AD Ports Group and MAIR Group Launch Strategic Plan for World-Class Sugar and Agro-Logistics Hub at Khalifa Port
BUA Group, AD Ports Group and MAIR Group Sign MoU to Explore Collaboration in Sugar Refining, Agro-Industrial Development, and Integrated Global Logistics Solutions
Abu Dhabi, UAE – Monday, 16th February 2026
BUA Group, AD Ports Group, and MAIR Group of Abu Dhabi today signed a strategic Memorandum of Understanding (MoU) to explore collaboration in sugar refining, agro-industrial development, and integrated global logistics solutions. The partnership aims to create a world-class platform that strengthens regional food security, supports industrial diversification, and reinforces Abu Dhabi’s position as a hub for trade and manufacturing.
The proposed collaboration will leverage BUA Group’s industrial and logistics expertise, Khalifa Port’s world-class infrastructure, and AD Ports Group’s operational experience. The initiative aligns with the objectives of the UAE Food Security Strategy 2051, which seeks to position the UAE as a global leader in sustainable food production and resilient supply chains. It also aligns with Nigeria’s food production- and export-oriented agricultural transformation agenda, focused on scaling domestic capacity, strengthening value addition, improving post-harvest logistics, and unlocking new markets for Nigerian produce across the Middle East, Asia, and beyond.
Photo Caption: L-R: Kabiru Rabiu, Group Executive Director, BUA Group; Cpt. Mohammed J. Al Shamisi, MD/Group CEO, AD Ports Group; Saif Al Mazrouei, CEO (Ports Cluster) AD Ports Group; Abdul Samad Rabiu, Founder/Executive Chairman, BUA Group; and Steve Green, Group CFO, MAIR Group
Through structured aggregation, processing, storage, and maritime export channels, the partnership is designed to reduce supply chain inefficiencies, enhance traceability and quality standards, and also create a predictable trade corridor between West Africa and the Gulf.
BUA Group—recognised as one of Africa’s largest and most diversified conglomerates, with major investments across sugar refining, food production, flour milling, cement manufacturing, and infrastructure- brings extensive industrial expertise and large-scale operational capability to the venture. MAIR Group will provide strategic support in developing integrated logistics and agro-industrial solutions, creating a seamless platform for production, storage, and distribution.
Abdul Samad Rabiu, Founder and Chairman of BUA Group, said:
“This MoU marks an important milestone in BUA’s international expansion and reflects our long-term vision of building globally competitive industrial platforms. Together with AD Ports Group and MAIR Group, we aim to develop sustainable food production and logistics solutions that strengthen regional supply chains and support the UAE’s Food Security Strategy 2051.”
He further added that, “This partnership represents not just a commercial arrangement but a strategic food corridor anchored on shared economic ambition, resilient infrastructure, and disciplined execution, reinforcing long-term food security objectives for both nations.”
A representative of MAIR Group added:
“This collaboration underscores our commitment to advancing strategic industries in Abu Dhabi and building integrated solutions that reinforce the UAE’s position as a global hub for trade, food security, and industrial excellence.”
A spokesperson from AD Ports Group commented:
“Our partnership with BUA Group and MAIR Group highlights Khalifa Port’s role as a catalyst for high-impact industrial investments. This initiative will enhance regional food security, strengthen global trade connectivity, and support Abu Dhabi’s economic diversification goals.”
This MoU marks a historic collaboration that combines world-class infrastructure, industrial expertise, and strategic vision, setting the stage for a sustainable and resilient food and logistics ecosystem that will benefit the UAE, the region, and global markets alike.
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