News & Press

Bridging the Gender Gap: Towards Tax Equity in Nigeria

News & Press

Bridging the Gender Gap: Towards Tax Equity in Nigeria

18th March, 2024


In Nigeria, as in many parts of the world, discussions about taxation often center on revenue generation, fiscal policy, and economic development. Yet, beneath the surface lies a profound issue of gender inequality within the tax system, one that is often overlooked but has significant implications for social justice and economic empowerment. Addressing tax equity, particularly through the lens of gender, is not just a matter of fairness; it is essential for building a more inclusive and prosperous society.

At its core, tax equity means that individuals and businesses should contribute to public finances based on their ability to pay, with due consideration given to their economic circumstances. However, the reality in Nigeria, as in many countries, is far from equitable, especially when it comes to the treatment of women within the tax system. Gender disparities intersect with various aspects of taxation, perpetuating social norms, and reinforcing discrimination against women.

One of the key issues is the undervaluation of unpaid work, primarily performed by women. Despite playing a crucial role in sustaining households and communities, activities such as caregiving, domestic labour, and subsistence farming are often unrecognized and unremunerated. As a result, women’s economic contributions remain invisible in the eyes of the tax system, leading to a skewed distribution of tax burdens.

Moreover, gender disparities in employment and income exacerbate the problem. Women in Nigeria, on average, earn less than men and are more likely to be engaged in informal or precarious work. Consequently, they have fewer resources available for tax payments, yet they bear a disproportionate share of indirect taxes, such as value-added tax (VAT), which are regressive and place a heavier burden on low-income individuals and households.

Furthermore, social norms and cultural expectations often limit women’s participation in the formal economy, leading to their underrepresentation in higher-paying professions and decision-making positions. This systemic exclusion perpetuates a cycle of economic disadvantage, leaving women more vulnerable to poverty and less able to meet their tax obligations.

Addressing these challenges requires a multifaceted approach that recognizes the interconnectedness of gender inequality and taxation. First and foremost, there needs to be a shift in mindset within both the government and society at large to acknowledge and value the unpaid work done by women. This could involve implementing policies that provide tax credits or deductions for caregiving responsibilities or creating social security systems that recognize and support unpaid caregivers.

Moreover, the tax system itself must be reformed to be more progressive and equitable, with a focus on redistributing wealth and addressing income disparities. This could include measures such as implementing progressive income tax rates, increasing taxes on wealth and capital gains, and reducing reliance on regressive indirect taxes that disproportionately affect low-income individuals, including women.

Additionally, efforts to promote women’s economic empowerment and gender equality must be integrated into tax policy and administration. This could involve providing targeted support and incentives for women-owned businesses, promoting access to education and training opportunities, and addressing barriers to women’s participation in the formal economy.

Beyond policy changes, addressing gender disparities in taxation requires challenging entrenched social norms and stereotypes that perpetuate discrimination against women. This necessitates comprehensive education and awareness-raising campaigns to promote gender equality and challenge harmful beliefs and practices that perpetuate gender-based discrimination.

Furthermore, empowering women to participate in decision-making processes related to taxation and public finance is essential for ensuring that their voices are heard and their interests are represented. This could involve promoting women’s participation in budgetary processes, tax policy development, and oversight bodies, as well as ensuring that tax administration agencies have gender-sensitive policies and practices in place.

Ultimately, achieving tax equity in Nigeria requires a concerted effort to address the intersecting factors that contribute to gender disparities within the tax system. By recognizing and valuing women’s contributions, reforming tax policies to be more progressive and equitable, promoting women’s economic empowerment, and challenging discriminatory social norms, Nigeria can take significant strides towards building a more inclusive and just society for all its citizens.

In conclusion, taxation is not just about revenue collection; it is a powerful tool for promoting social justice and economic development. By prioritizing tax equity and addressing gender disparities within the tax system, Nigeria can create a more equitable and prosperous future for all its citizens, regardless of gender. The time to act is now.

Meet the Author

Abdulrauf Aliyu

Polymath. Public Policy Wonk. Strategist. View his portfolio on LinkedIn

Latest News

The African center for tax and governance ™
News & Press

Sustainable Financing Alternatives in Nigeria and the Offerings of ESG Reporting

Sustainable Financing Alternatives in Nigeria and the Offerings of ESG Reporting

By Musa Kalejaiye and Susan Omeh (Project and Finance Lawyers).

7th July, 2024


As discussions continue to grow, globally, on the need to transition into cleaner energy, the world continues to witness a significant increase in the adoption of financial instruments to meet the demands of decarbonization. Notably, finance is a top priority in decarbonization efforts, and climate considerations continue to influence investment decisions and access to capital. The dawning reality for businesses is that Environmental, Social and Governance (“ESG”) metrics being crucial for accessing capital are not merely performative. For instance, the popular case of ClientEarth v Shell [2] where a shareholder sued Shell for non-compliance with energy transition plans, received massive support from the investing community [3] . Also, TotalEnergies had to quit its investment in the Canadian oil sands for want of alignment with its low carbon investment commitments [4 ] . There has also been a significant inclusion of ESG-specific requirements in commercial contracts (mostly supply contracts and shareholders’ agreements) in the last decade. In Nigeria, the Federal Government has committed to achieving carbon neutrality by 2060 and has been walking the talk with its adoption of Compressed Natural Gas as its transition fuel, the enactment of ESG-related laws [5] , the launch of the Energy Transition Plan, the pioneer launch of green bonds in Africa, amongst other transition-focused initiatives. In all of these, one thing is certain – the global policy imperative for energy transition makes exploring sustainable finance alternatives and compliance with ESG reporting obligations, non-negotiable. The climate crisis presents an opportunity for businesses to explore sustainable financing options beyond the normative traditional means of finance. This is further accentuated by the fact that the financial realities of Nigerian companies are falling short of projections, given the impact of the rising debt profile, instability in global oil prices and foreign exchange rates. This article examines the opportunities available for ESG-compliant companies, particularly in terms of accessing sustainable financing instruments and espouses the essence of ESG disclosures. Notably, it considers acceptable ESG reporting standards with the aim of assisting companies better position themselves to benefit from the financial instruments available for decarbonization.

Innovative Sustainable Financing Instruments
Institutional investors’ risk appetite for long-term projects is now dependent on ESG considerations relevant to their investment portfolios. J.P. Morgan, in underscoring the essence of sustainable finance, reported that 45% of millennials with a potential wealth of $68 trillion subscribed to aligning their prospective investment decisions to ESG responsibilities. [6] Key sustainable financing instruments that entities can leverage to generate more capital are:

  1. Sustainability Linked Loans
  2. Under Sustainability Linked Loans (“SLLs”), companies can obtain credit facilities where the cost of debt servicing is tied to certain set and measurable sustainability targets of the borrower. Where the borrower meets the sustainable target, it gets a discount on payable interest, otherwise, a premium will accrue. SLLs can be offered as cross-border facilities from international lenders, and development finance institutions. A distinctive feature of SLLs is that the funds raised can be deployed to service corporate needs beyond environmental and social projects. This has increased its attractiveness in the global debt market, as SLL lenders get more deposits compared to non-SLL lenders. According to Business Times, the world will experience an exponential increase in the use of SLLs in 2024. [7]

  3. Climate Funds
  4. Financing opportunities are available to entities that are aligned towards ESG metrics as required by different climate funds. These funds aim to enhance low-carbon emission and climate-resilient developments in public and private sectors. A leading climate fund is the Green Climate Fund (“GCF”) which is the largest international climate fund in the world. The GCF offers financial instruments (grants, loans, equity, guarantees, etc.) to accredited entities from various countries. Generally, accreditation is based on direct access or international access. While direct access entities require the nomination of National Designated Authorities (“NDAs”) of their respective countries (the National Council on Climate Change (“NCCC”) is the NDA for Nigeria), international access entities can apply without any nomination, and non-accredited entities can submit proposals to the GCF through accredited entities. Nonetheless, all proposals must have a no-objection approval from relevant NDAs of countries where the proposed project is to be implemented. Another notable example of climate funds is the Sustainable Energy Fund for Africa managed by the African Development Bank for Africa. In 2023, the African Venture Capital (VC) industry recorded significant investment in climate funds – a testament to the visibility of climate funds in VC investments. [8] From Novastar’s Africa People + Planet Fund worth $200 million to E3 Capital and Lion’s Head joint $100 million Low Carbon Economy Fund, the ecosystem is thriving in green investments. Other instances are AfricaGoGreen’s $47 million climate equity investment, climate-focused funds from Echo VC, Grovest, Sasol’s Venture, Gaia Energy and so on.

  5. Green Bonds
  6. The global value of green bonds rose from USD37 billion in 2014 to USD487 billion in 2022. [9] Given its international acceptance, issuances and subscriptions to green bonds come from both the public and private sectors across the world. In Africa, Nigeria pioneered the launch of this financing instrument with its first issuance of green bonds in 2017. To further advance green bonds in Nigeria, the FMDQ Securities Exchange partnered with the Climate Bonds Initiative and the Financial Sector Deepening Africa to set up the Nigerian Green Bond Market Development Programme in 2018. Later in 2019, the Nigerian Securities and Exchange Commission (the “SEC”) approved Access Bank’s Book Building process for issuance of the first corporate bond in Nigeria, and in the same year, an N8.5 billion green guaranteed infrastructure bond issued by North South Power Company Limited recorded a 60% oversubscription. The increased adoption of green bonds in Nigeria has also been spurred by the release of the Green Bonds Issuance Rules by the SEC. With green bonds, entities that are ESG-compliant can access funds for specific environmental impact projects such as renewable energy technologies, clean transportation projects, energy transition programs, and clean transportation systems. Green bonds are typically characterized by the adherence to green bond principles [10] which emphasizes using proceeds of the bond for environmentally friendly projects and in an equitable manner.

  7. Social Bonds
  8. Social bonds are similar to green bonds, albeit the use of funds here is for social projects such as affordable housing, healthcare, education, job creation as well as initiatives aimed at supporting vulnerable populations. Social bonds are issued in line with the Social Bonds Principles (“SBP”). Although these principles are not binding, they are international standards developed by the International Capital Markets Association (“ICMA”) to guide issuers on the approach to issuing social bonds and facilitate access to credible information to aid investors’ decision-making when investing in social bonds. The SBP is replicated in the SEC’s Rule on Social Bonds released in 2021 which regulates the issuance of social bonds in Nigeria.

  9. Carbon Emissions Trading
  10. To incentivize companies’ transition to clean energies, Carbon Emission Trading (“CET”) Systems are developed and permits or allowances are issued to regulate the greenhouse gas emission limits of companies. Entities that can reduce their emissions below the permitted threshold can trade their permits as commodities and earn income from companies that require additional permits. With operations in 28 countries, the European Union Emissions Trading System is the largest in the world. In Africa, the African Carbon Markets Initiative was launched in 2022 at COP27 to facilitate the establishment of voluntary carbon markets. Although Nigeria is yet to launch its emission trading system, the NCCC has confirmed that this is a priority, as the development of a mechanism for emission trading is mandated under the Climate Change Act 2021. [11]

  11. ESG-Based Equity Investments
  12. Between 2013 and the first half of 2021, more than USD200 billion was invested in climate-related technology firms, globally. [12] Bloomberg has projected a potential growth beyond USD140.5 trillion in ESG funds’ assets by 2025. [13] These investments typically have screening processes that prioritize ESG considerations. Notable examples of ESG-based investment in Nigeria are Arnergy’s USD9 Million Series A funding for investing in renewable energy technologies, and Rensource’s USD20 million fund to boost its technology-enabled power solutions project.

  13. Incentives from the government
  14. Incentives from the government to aid climate initiatives are commonplace. These include subsidies, tax exemptions, grants, and concessional loans. The Nigerian Electrification Project and Bank of Industry’s Solar Energy Fund are examples of concessional loans offered at low-interest rates compared to obtainable market rates to entities looking to develop sustainability-linked projects. Also, renewable energy equipment enjoys subsidies such as total waiver of import duty on solar panels with diodes. [14]
The Difference ESG Reporting Makes
The adoption of ESG Reporting standards potentially positions companies for sustainable finance opportunities. Through ESG reporting, companies can effectively and transparently assess, monitor, and communicate their ESG performances to stakeholders and investors. Although different financiers have peculiar metrics for assessing sustainable performance, a company’s existing sustainable framework in line with global standards makes it readily equipped to align with given ESG indices set by specific financiers. Notably, companies demonstrate their commitment to ESG through carbon emissions reductions, improved diversity and inclusion policies in employees’ demography, stakeholder engagements, etc. However, a holistic approach is for companies to entrench ESG frameworks into their operations and cater for their expectations, taking into cognizance the relevant disclosure framework applicable to their value chain, the industry where the company operates, comparative analysis of competitors’ approaches, the company’s particular stakeholders and audience, compliance with relevant laws and regulations [15] , and the appointment of a sustainability officer. [16] ESG Reporting standards adopted globally are the Global Reporting Initiative (GRI), the Sustainable Accounting Standards Board’s standards (SASB), the Task Force on Climate-related Financial Disclosures (TCFD), the Climate Disclosure Standards Board (CDSB), and the International Integrated Reporting. On 26 June 2023, the International Sustainability Standards Board (“ISSB”) launched its inaugural sustainability standards – IFRS S1 and IFRS S2 – which introduced consolidated metrics for ESG reporting in capital and financial markets across the world. [17] While IFRS S1 focuses on general sustainability-related disclosures to be included in financial reports to help investors’ decisions, IFRS S2 details disclosures relating to climate risks (physical and transition risks) that could impact the entity’s financial performance. In its usual fashion of pioneering climate change initiatives in Africa, Nigeria was the only African nation selected to launch the IFRS S1 and IFRS S2, and this was done through the collaborative efforts of the ISSB, the NGX Regulation Limited and the Financial Reporting Council (“FRC”). Thus, effective from January 2024, Public Interest Entities [18] that are legally required to file annual financial statements or opt to make sustainable disclosures must comply with the IFRS S1 and IFRS S2 Disclosures requirements. [19]

It is projected that between 2024 to 2034, the adoption of sustainable finance will grow at a Compound Annual Growth Rate (CAGR) of 20.10%. It is also projected that the world will witness an unprecedented growth in sustainability-linked projects within this period. Interesting times lie ahead for sustainability financing, globally, and in Nigeria. In light of this, it is prudent to stay alive to the realities of energy transition, sustainable practices and ESG disclosures. The icing on the cake here is that sustainable practices open the door to sustainable financing instruments. To effectively maximize sustainable financing alternatives, entities must be clear on internal and external sustainability strategies. Particularly, entities must align their daily operations with ESG metrics, set ESG targets in line with their industries’ requirements, publicize their ESG milestones, and adequately prepare to make ESG disclosures. Ultimately, the roles of experts in integrating sustainable practices, making ESG disclosures and accessing sustainable finance cannot be overemphasized.

  1. [2023] EWHC 1137 (Ch)
  2. ClientEarth, “Our Groundbreaking Case against Shell’s Board of Directors comes to an End” (ClientEarth, November 2023) < >
  3. Iain Esau, “TotalEnergies to Quit Canadian Oil Sands” (Upstream Energy Explored, 2022) < >
  4.  The Petroleum Industry Act 2021, the Employees Compensation Act 2010; The Factories Act, 1987; The National Housing Fund (Establishment) Act 2018; National Health Insurance Authority Act, 2022; The Pension Reform Act, 2014; the Industrial Training Fund Act, 2011, the Environmental Impact Assessment Act, 1992, the Climate Change Act 2021, the Federal Competition and Consumer Protection Act, 2018, the National Environmental Standards and Regulations Enforcement Agency Act 2007, the Harmful Waste (Special Criminal Provisions) Act 1988, the Flare Gas (Prevention of Waste and Pollution) Regulations, 2018, etc.
  5. J.P Morgan, “Impact Investing” (JP Morgan Chase, 2020) < >
  6. Janice Lim, “ESG Bond and Loan Proceeds to Rise in 2024 on Lower Rates” (The Business Times, January 2024) < >
  7. Timi Odueso, and Faith Omiyi, “Funding Reaches Two-Year Decline as African Startups Raise $3.2 Billion in 2023” (TechCabal, 2024) < >
  8. Statista, “Green Bonds Issued Worldwide” (Statista, 2022) < >
  9. Such as the principles laid down by the International Capital Market Association in 2014 which was also reflected in the Green Bond Issuance Rules released by the SEC in 2018.
  10. Section 4 (j), the Climate Change Act, 2021
  11. Ananthakrishnan Prasad, “Mobilizing Private Climate Financing in Emerging Market and Developing  Economies” (IMF eLibrary, 2022)  < >
  12. Bloomberg, “ESG Assets Rising to $50 Trillion will Reshape $140.5 Trillion of Global AUM by 2025” (Bloomberg, 2021) < >
  13. Paragraph 2 of the VAT Modification Order, 2021
  14. For instance, private entities with a minimum of fifty (50) employees are under obligation to put in place measures to achieve the annual carbon emission reduction targets in line with the National Climate Change Action Plan. See section 24 (1) (a), the Climate Change Act, 2021.
  15. 24 (1) (b), the Climate Change Act, 2021 mandates private entities with a minimum of fifty (50) employees to designate a Climate Change Officer or an Environmental Sustainability Officer. The Officer will be responsible for coordinating the entity’s sustainable practices and shall be responsible for the filing of sustainability-linked reports to the Secretariat of the National Council on Climate Change.
  16. IFRS, “ISSB Issues Inaugural Global Sustainability Disclosure Standards” (IFRS, 2023) < >
  17. Section 24 of the Financial Reporting Council (Amendment) Act, 2023 defines ‘Public Interest Entities’ to include governments and government organizations; listed entities on any recognized exchange in Nigeria; non-listed entities that are regulated; public limited companies; private companies that are holding companies of public or regulated entities; concession entities; privatized entities in which government retains an interest; entities engaged by any tier of government in public works with annual contract sum of N1billion and above, and settled from public funds; licensees of government; and all other entities with an annual turnover of N30 billion and above.
  18. Templars:

Meet the Author

Abdulrauf Aliyu

Polymath. Public Policy Wonk. Strategist. View his portfolio on LinkedIn

The African center for tax and governance ™