In Nigeria, policies usually arrive like unexpected app updates, short on explanations, but telling you there’s something better, with untold charges that drain your battery faster than they help.
The government’s new tax act is the latest example. Tucked inside it was a 5% fuel surcharge that would have pushed up the cost of transportation, logistics, and ultimately, digital services. But after public outcry, implementation has been delayed.
The suspension may look like a reprieve, but the episode reveals Nigerians no longer trust that reforms are designed with them in mind. The digital economy, from ride-hailing to food delivery, from fintech transfers to e-commerce, now sits at the centre of this trust issue.
What’s in the New Tax Act?
The Finance Act 2026 was meant to strengthen revenue collection in a country struggling with deficits and a weakening currency. Among its provisions was a 5% fuel surcharge, to be applied across petrol and diesel usage. The government argued it would fund infrastructure and stabilise the economy.
But the context matters. Inflation is at 21.88%, food inflation stands at 22.74%, and the naira last week closed at ₦1,535/$1 in the parallel market. Nigerians still feel squeezed by subsidy removals, FX adjustments, and high bank charges. Adding a fuel surcharge on top of that was bound to ignite resistance.
Why the 5% Surcharge Matters
Transport is the backbone of Nigeria’s economy, and the digital economy in particular. A surcharge on fuel does not stay at filling stations. It ripples into delivery costs, ride-hailing fares, and the price of moving goods.
Take Lagos as an example: an average Bolt ride costs about ₦5,000. With the surcharge, that would have jumped by at least ₦250. Scale that across 100,000 rides daily in the city, and consumers alone would have shouldered ₦25 million extra every day.
For SMEs relying on Jumia or GIG Logistics, higher delivery charges mean higher product prices or thinner margins. Either way, trust in both government policy and platform pricing takes another hit.
The Digital Economy at the Crossroads
Nigeria’s digital economy contributed 17.68% of GDP in 2024 (NBS data). That is larger than oil in some quarters, however, its growth depends on affordability and adoption.
Platforms like OPay and PalmPay have already introduced transfer fees that led to public backlash. Add higher logistics and energy costs, and Nigerians will begin to question whether digital platforms are easing life or taxing them.
The tension is way beyond cost. It is about ownership. Are Nigerians building a digital economy for themselves, or are they bankrolling platforms while struggling with fees and unpredictable policies?
The Trust Deficit
Trust is the real casualty here. Nigerians are used to policies that land without warning and change without explanation. The removal of fuel subsidy, the central bank’s constant currency adjustments, sudden banking charges, and now a tax law that has been rolled out, suspended, and may yet return.
An Afrobarometer survey (2024) showed that only 28% of Nigerians trust government to do what is right most of the time. That figure is not surprising when reforms look like experiments and citizens feel like test subjects.
Platforms and banks are caught in the middle. They bear the cost of compliance, pass it down to users, and in the process, lose consumer trust as well.
Winners and Losers
- Winners (short-term): The government, if revenue targets are met; platforms, if they successfully shift costs to users.
- Losers: Consumers, who pay more for transport, deliveries, and digital services. SMEs, whose logistics bills eat into profits. And ultimately, the digital inclusion agenda, as people turn back to cash to avoid charges.
The long-term danger is that if reforms drive people out of the formal system, Nigeria will stall in its effort to boost digital adoption.
Lessons from Elsewhere
Kenya introduced a digital service tax in 2021, starting at 1.5% of transaction value. It has since risen to 3%, but its rollout was gradual, with public communication at every stage. South Africa relies more on VAT collection from platforms than on adding transport surcharges.
Nigeria’s approach “tax first, explain later”, risks increasing the gulf between policy intent and public trust.
A Way Forward
Nigeria needs revenue, but it cannot afford to erode digital adoption in the process. Three steps could help:
- Transparency: show clearly how revenue will be used. Citizens are more likely to accept taxes when they see results.
- Phased rollouts: allow businesses and households time to adjust.
- Protection for low-income groups: exemptions or reliefs to cushion the impact on the most vulnerable.
If Nigeria’s economic reforms were an app, many citizens would uninstall it. But since that is not an option, the least government can do is fix the bugs before asking users to pay for premium.
The suspension of the fuel surcharge is just a warning. Unless policies are designed with transparency, fairness, and trust in mind, every new tax will be met with suspicion, and every platform caught in the middle will struggle to hold consumer confidence.
