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Cash Crisis Fuels Loan App Nightmare in Nigeria

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Cash-strapped and in dire need of N30,000 (about $20), Mariam Ogundairo turned to a loan app, downloading it and registering her phone number.

The money was quickly sent over but came with a 21.6 percent interest rate, due in two weeks.

Like many in Nigeria, battered by inflation, Ogundairo was too broke to pay back what she owed.

Then came a deluge of harassment — a tactic that has become the hallmark of many loan apps in Africa’s fourth-largest economy.

“They started calling my phone contacts when I couldn’t pay back on time, saying I owed them. “I lost my security, and it makes me so sad and scared,” Ogundairo told AFP.

Such loan apps in Nigeria, branded “predatory” by campaigners, are texting threats and leaking sensitive photos to their mobile phone contacts when people squeezed by the country’s ongoing economic crisis cannot pay up.

Often enticed by false promises of low interest rates, thousands of Nigerians have turned to personal finance apps seeking quick access to short-term loans as galloping prices put pressure on incomes, with inflation standing at 21.8 percent at the end of July.

Ogundairo struggled through the embarrassment for weeks until she was able to pay off her balance.

– ‘Quick fix’ gone wrong –

“A friend recommended it because I needed a quick fix,” another victim, a 24-year-old who took out a loan two years ago as a university student and asked his name not be used, told AFP.

After spending more than N300,000 conducting laboratory investigations for his final thesis and still needing more funds to complete his research and beat submission deadlines, the money seemed like a lifesaver.

He took out N70,000 when he was a final-year student in 2023. He was meant to pay back about N110,000 within a month, but was too broke.

The loan app then began sending messages to his phone contacts that he was a “ritualist killer”. He said he was not aware he had given the app access to his contacts.

“A couple of my coursemates got the messages.

“It wasn’t the case of unwillingness to pay; it was just a case of impossibility,” he told AFP.

An increasing number of Nigerians have turned to personal loans following reforms by President Bola Tinubu to shock the country’s moribund economy and remove costly subsidies.

Though some economists have voiced approval for the measures, Tinubu’s policies have sent inflation skyrocketing and the value of the naira plunging, hitting many ordinary Nigerians in their pockets.

Even when apps mislead people on interest rates, they can often provide better rates than traditional banks — with the benchmark interest rate at 27.5 percent, conventional loans can come with interest rates at 27 to 48 percent.

While there was no breakdown for so-called fintech apps, lenders in the country handed out about 470 billion naira in personal loans in the last quarter of 2024.

By December, outstanding personal loans jumped “by 21.27 percent to 3.82 trillion naira compared with the level at end-September 2024”, the Central Bank of Nigeria (CBN) said in March.

As of the same month, the Federal Competition and Consumer Protection Commission (FCCPC) approved 408 loan apps, up from 269 in September 2024, with 42 receiving conditional clearance.

The CBN approved 23 apps, up from 14 in the third quarter of last year.

Forty-seven were delisted and 88 placed on watchlists for various offences, including harassment.

The watchdog had said in the past that some loan apps were operating in the country illegally.

– Loan sharks ‘thrive’ –

Many of the loan apps’ ease of access and swift processing create a trap, said Funmi Oderinde, a lawyer at Citizens’ Gavel, a civil society organisation that has been pushing back against the lenders.

The organisation has so far received at least 1,300 complaints over “predatory digital loan apps”.

“These promises are deceptive, and borrowers soon face unethical recovery practices such as defamation, harassment, threats, breaches of data privacy, arbitrary fines, and excessively high interest rates aimed at pressuring them into repayment,” Oderinde said.

Some victims of the harassment have formed different support groups on Facebook. One such group has more than 21,000 members.

A victim told Citizens’ Gavel that, after her phone was accessed remotely, a fake obituary and a real nude photo were shared with her contacts by a loan app.

According to Oderinde, two of the people who approached the organisation for legal help “could have died” due to harassment from loan app agents.

The FCCPC, in a note sent to lenders in August, said it would “periodically monitor interest rates for services of consumer lending, and ensure rates are not exploitative”.

But despite regulatory moves, dozens of apps continue to operate under new names, and desperate borrowers often do not check approval lists before applying.

The result is that loan sharks “thrive”, Oderinde said, “because of weak sanctions and poor enforcement”.

AFP

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Atiku Backs Calls for Suspension of new tax framework , following unconstitutional forgery

This constitutional violation exposes a troubling reality: a government obsessed with imposing ever-increasing tax burdens on impoverished Nigerians rather than creating conditions for prosperity.

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Atiku Abubakar, ex- Vice President of Nigeria (1999-2007) has strengthened the public calls for the suspension of the Federal Government’s new tax laws following the discovery of illegal and unauthorized alterations made to document after passage by the National Assembly.

Atiku, in a statement he signed personally on Tuesday, asserted “What the National Assembly did not pass cannot become law.”

Atiku described the forgery of the tax law as “a brazen act of treason against the Nigerian people and a direct assault on our constitutional democracy.”

The statement reads: “This draconian overreach by the executive branch undermines the foundational principle of legislative supremacy in the making of laws.

It reveals a government more interested in extracting wealth from struggling citizens than empowering them to prosper.

The Unconstitutional Alterations

The following substantive changes were allegedly illegally inserted into the tax bills after parliamentary approval, in clear violation of Sections 4 and 58 of the 1999 Constitution:

1. New Coercive Powers Without Legislative Consent

*Arrest powers granted to tax authorities

*Property seizure and garnishment without court orders

*Enforcement sales conducted without judicial oversightThese provisions transform tax collectors into quasi-law enforcement agencies, stripping Nigerians of due process protections that the National Assembly deliberately included.

2. Increased Financial Burdens on Citizens*Mandatory 20% security deposit before appealing tax assessments*Compound interest on tax debts*Quart

erly reporting requirements with lowered thresholds

*Forced USD computation for petroleum operations

These changes erect barriers that prevent ordinary Nigerians from challenging unjust assessments while increasing compliance costs for businesses already struggling in a difficult economy.

3. Removal of Accountability Mechanisms

*Deletion of quarterly and annual reporting obligations to the National Assembly

*Elimination of strategic planning submission requirements

*Removal of ministerial supervisory provisions

By stripping away oversight mechanisms, the government has insulated itself from accountability while expanding its powers—a hallmark of authoritarian governance.

A Government Against Its People

This constitutional violation exposes a troubling reality: a government obsessed with imposing ever-increasing tax burdens on impoverished Nigerians rather than creating conditions for prosperity.

Instead of investing in infrastructure, education, healthcare, and economic empowerment that would expand the tax base organically, this administration chooses the path of aggressive extraction from an already struggling populace.

Nigeria’s poverty rate remains alarmingly high, unemployment continues to devastate families, and inflation erodes purchasing power daily.

Yet rather than supporting citizens to become more productive, thereby generating sustainable tax revenues, the government employs draconian measures to squeeze resources from people who have little left to survive.

True economic growth comes from empowering citizens, not impoverishing them further through punitive taxation and erosion of legal protections.

A thriving economy with prosperous citizens naturally generates robust tax revenues. But this requires vision, investment, and patience, qualities evidently lacking in an administration that resorts to constitutional manipulation to achieve short-term fiscal goals.

I hereby call upon:1. The Executive to immediately suspend the implementation of the tax law effective January 1, 2026 to give room for a proper investigation.

2. The National Assembly to immediately rectify these illegal alterations through proper legislative processes and hold accountable those responsible for this constitutional breach.

3. The Judiciary to strike down these unconstitutional provisions and reaffirm the sanctity of the legislative process.

4. Civil Society and all Nigerians to reject this assault on democratic principles and demand governance that serves the people rather than exploiting them.

5. The Government to abandon this path of extraction and oppression, and instead focus on policies that enable Nigerian citizens and businesses to thrive.

6. The EFCC to immediately investigate and prosecute those found culpable in the illegal alteration of our laws to extort and defraud the Nigerian people.

What the National Assembly did not pass cannot become law.

This fundamental principle must be defended, or we risk descending into arbitrary rule where constitutional safeguards mean nothing.

The Nigerian people deserve better than a government that circumvents democracy to impose hardship.

We demand accountability, constitutional compliance, and economic policies that build prosperity rather than deepen poverty.”

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FIRS says NIN to serve as Tax ID for individuals

The new tax law is scheduled to come into force in January 2026 and mandates the use of a Tax ID for certain financial and economic transactions, including banking-related activities.

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The Federal Inland Revenue Service (FIRS) has announced that the National Identification Number (NIN) issued by the National Identity Management Commission (NIMC) will now automatically serve as the Tax Identification Number (Tax ID) for individual Nigerians under the country’s new tax regime.

FIRS also said that registered businesses will also no longer need a separate Tax Identification Number, as their Corporate Affairs Commission (CAC) registration (RC) number will now function as their Tax ID.

The Service made the disclosure on its official X handle on Monday, ahead of the passage of the Nigeria Tax Administration Act (NTAA), one of the new tax laws introduced as part of the Federal Government’s broader fiscal and tax reform agenda .

The new tax law is scheduled to come into force in January 2026 and mandates the use of a Tax ID for certain financial and economic transactions, including banking-related activities.

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Tanker crushes Akpabio’s dispatch rider to death

We went to Oyo State for the installation of our colleague, but the vehicles that came to pick me up at the Ibadan airport, unfortunately, my dispatch rider was run over by a tanker driver, and his head was shattered.

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Ibrahim Hussaini, a dispatch rider attached to the convoy of Godswill Akpabio, the Senate President, has been killed after a petrol tanker rammed into the motorcade.

Although the Senate President did not state the precise location of the crash, he said that it happened in Ibadan, Oyo State, shortly after members of his convoy picked him up from the Ibadan Airport.

Akpabio announced the death during the plenary on Tuesday; he extended condolences to the family of the deceased.

Dispatch riders, who are police officers, form part of the security detail of top government officials and typically escort convoys on motorcycles.

Dispatch riders, who are police officers, form part of the security detail of top government officials and typically escort convoys on motorcycles.

“We went to Oyo State for the installation of our colleague, but the vehicles that came to pick me up at the Ibadan airport, unfortunately, my dispatch rider was run over by a tanker driver, and his head was shattered.

“We just buried him 15 minutes ago in Kogi State. He left two wives and four children,” the Senate President told lawmakers

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