Trump's new tax plan: A blow to African economies and families
The new proposal by President Donald Trump's administration, introduced on Thursday, regarding a 5% tax on private foreign money transfers, will significantly impact the economies of African countries and migrant families. Each year, migrants living in the U.S. send approximately $13 billion to Africa, as calculated by Agenceecofin.
The tax is part of a project known as the "Great, Beautiful Act," which was passed by the U.S. House of Representatives on Thursday. The bill, now moving to the Senate, aims to help President Trump fulfill his campaign promises by extending the tax cuts implemented during his first term.
According to financial analysts, these cuts could significantly increase the federal deficit. Therefore, to mitigate their impact on the budget, lawmakers have proposed, among other measures, implementing a tax on money transfers sent by migrants.
It will not apply to U.S. citizens, but to about 46 million migrants living in the United States. Especially those residing there illegally. This group includes over 2 million African migrants who remit part of their earnings to families in Africa. In 2021, $5.7 billion was sent from the U.S. to Nigeria, $1.8 billion to Egypt, and $1.2 billion to Kenya.
Billions of dollars derived from corruption and theft
Billions of dollars derived from corruption and theft are transferred from Africa to the United States. The scale of this flow is evidenced by an agreement made in January between the U.S. and Nigeria concerning the return of nearly $53 million to the African government's control, confiscated by the FBI from corrupt Nigerians.
This was only part of more than $100 million that was laundered in the United States and used to buy luxury real estate in California and New York. It was also enough for Nigerians to purchase a 65-metre yacht.
In its report last year, the international organization Transparency International, which works to expose and combat corrupt practices, reported nearly $4 billion transferred out of Africa, including to the U.S., noting that this figure only comes from documented cases.
