Fiscal Policy
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While global financial centres contend with subdued growth and elevated interest rates, Africa’s capital markets have entered 2026 with notable momentum.
The inflows—expected from the African Development Bank and a yen-denominated Samurai loan arranged last year—are part of a broader financing pipeline linked to reform milestones, climate frameworks and multilateral support.
Nigeria is set to implement a new green tax surcharge on motor vehicles with larger engines starting July 1, 2026.
The borrowing plans come even as Angola— Africa’s second-largest oil producer— stands to benefit from a surge in crude prices linked to the Middle East crisis
Beyond the immediate fiscal impact, authorities are increasingly concerned about fuel availability as supply disruptions persist along key global shipping routes.
With external pressures rising and key export projects delayed, Mozambique’s debt outlook is increasingly tied to improvements in foreign exchange availability and progress on its LNG developments.
The proposal would remove the current $38,000 (KSh5 million) annual turnover threshold for VAT registration, requiring all businesses, regardless of size, to charge, remit, and account for the tax.
The price increases come against a backdrop of heightened volatility in international energy markets, where crude oil prices have surged more than 25% since January due to disruptions in Middle Eastern supply chains.
Taiwo will replace Doris Uzoka-Anite, who has been redeployed as Minister of State for Budget and National Planning, her third portfolio in the administration
Treasury bonds comprise $44.5 billion (KSh 5.739 trillion) about 81% of the total with local banks, pension funds, and insurance companies accounting for nearly 79% of domestic securities
The IMF has unlocked $2.3 billion for Egypt after key reviews, praising sharp inflation declines and a stabilizing economy—but urging faster progress on privatization and structural reforms to secure lasting growth.
South Africa’s 2026 budget scraps a proposed VAT hike, targets sustained primary surpluses and debt stabilisation, while expanding savings incentives and infrastructure spending.
Leveraging the 75% anticipated revenue uplift from the cashless mandate, which digitises gates, parks, lounges, and fees, post-implementation IGR could reach $271.6 million (₦364 billion) annually, assuming seamless rollout.
This will be Godongwana’s second budget under the Government of National Unity (GNU) and comes at a delicate political moment. With 2026 shaping up as a year of heightened electoral sensitivity.
The funding forms part of the lender’s Country Strategy Paper for 2024–2028, a framework designed to support Kenya’s medium-term development priorities by directing capital toward high-impact sectors.
The DMO report shows that domestic loans now account for ₦81.82 trillion ($55.48 billion), or 53.37% of Nigeria’s total debt stock, slightly outpacing external obligations of ₦71.48 trillion ($48.46 billion) or 46.63%.
After the fourth review of Burkina Faso’s Extended Credit Facility (ECF) Arrangement, IMF made a disbursement of about US$33 million. Approved (RSF) arrangement of about US$124.3 million.
African governments are borrowing to drive growth, but rising debt costs and weak revenues are forcing tougher fiscal rules and sharper trade-offs between stability and development.
Nigeria’s 2026 fiscal strategy hinges on tighter cash control, selective divestments and PPPs. Global precedents offer hope, but execution risks could test credibility and growth.
For businesses and households, the shift means higher tax burdens as policymakers return to a more aggressive revenue mobilisation push.
