Streaming, Selling, Surviving: When Africa’s Tax Policies Collide with the Creative Economy
On paper, a million streams looks like success. But for many African creators, by the time that stream translates into royalties, taxes — both foreign and domestic — have taken their bite. Add in local VAT on digital services, levies on mobile money, and weak intellectual property protections, and the dream of a sustainable creative career shrinks fast.
Earlier this year, Spotify announced that Nigerian and South African artists earned $59 million in royalties in 2024. It was a landmark figure, a sign of Afrobeats’ global pull. But how much of that money actually made it into the hands of creators — after deductions abroad, government taxes, and platform fees — is a question with no clear answer. What we do know is that Africa’s creative economy is growing in spite of, not because of, its taxation frameworks.
The Platform Wars: Who Really Gets Taxed?
African governments are racing to tax the digital economy. Nigeria introduced a 7.5% VAT on digital services in 2022, applying it to platforms like Netflix, Spotify, and Meta. Kenya rolled out a 1.5% Digital Service Tax targeting foreign-owned platforms. Ghana has its own e-levy on digital transactions.
On the surface, these measures target platforms. But the ripple effects reach creators directly. When a streaming service passes VAT costs down the chain, it’s the local artist or subscriber who pays. When Google deducts taxes at source on YouTube revenue, it’s the Nigerian vlogger or Ghanaian comedian who feels it.
Meanwhile, African creators remain locked out of some of the very monetization programs these taxes are supposed to support. TikTok’s Creator Fund still excludes African countries, even as the app soaks up millions in ad spend. That means governments tax platforms in Africa, platforms profit, but creators struggle for scraps.
It begs the question: are we taxing growth, or taxing survival?
Informality Meets the State: The Clash No One Wants to Talk About
The creative economy in Africa is overwhelmingly informal. Instagram sellers in Accra, freelance animators in Nairobi, TikTok influencers in Lagos — most operate without company registrations, accountants, or structured payroll. Their income is fluid, inconsistent, often seasonal.
When governments apply rigid tax policies to this ecosystem, the results are predictable: chaos. In Ghana, the controversial e-levy on mobile money transfers hit small entrepreneurs and digital creators hardest, leading many to revert to cash transactions. In Nigeria, fintech regulations have made it harder for freelancers to move money seamlessly.
For governments, taxation is about revenue. For creators, it can feel like punishment for trying to survive. Formalizing too early, without the financial backbone to sustain it, risks stifling the very innovation governments say they want to support.
The paradox is clear: governments want the revenue of a matured industry, but they are taxing an ecosystem that is still learning to breathe.
The Export Drain: When Global Success Doesn’t Come Home
Afrobeats is now a billion-dollar export engine. Burna Boy, Wizkid, and Davido headline arenas from London to New York. Nollywood films stream globally. African fashion graces Paris and Milan. But the money trail tells a different story.
Most of these revenues are taxed abroad before they ever reach African accounts. A Nigerian artist selling out the O2 Arena in London will pay UK taxes on ticket sales, venue fees, and promoter cuts. By the time the money comes home, double taxation treaties (or lack thereof) mean the artist could be taxed again locally.
South African DJs earning streaming royalties abroad face heavy withholding taxes with limited relief. Kenyan filmmakers whose work is licensed on Netflix rarely see direct payouts flow into Kenya without friction.
The result? Africa exports culture but often imports taxation losses. Governments celebrate soft power wins without asking why the financial benefits are so diluted.
The Youth Exodus: When Taxation Fuels Brain Drain
If the story ended at revenue leakage, it would be bad enough. But there’s a deeper, longer-term consequence: youth flight.
Africa’s creative economy is its youth economy. In Nigeria, more than 70% of the population is under 30. In Kenya, Gen Z drove last year’s protests against the Finance Bill, where new digital taxes were among the grievances. These aren’t abstract policy debates; they’re survival questions.
For a 22-year-old Nigerian video editor who earns $500 a month from foreign gigs on Fiverr, being taxed multiple times on money transfers is enough to consider relocating. For a Ghanaian TikToker hit by mobile money charges, moving their content to U.S.-based audiences feels more viable. The danger is clear: tax policies may look like short-term revenue wins, but they risk accelerating the export of Africa’s most valuable resource — talent.
Case Studies: The Three Frontlines
Nigeria: Tax First, Ask Later
Nigeria’s aggressive tax policies — VAT on digital services, new levies under the Finance Act — are designed to close fiscal gaps.
Yet, with weak IP enforcement and limited creator support, creators feel more like cash cows than stakeholders.
The irony: Nigeria’s creative economy is projected to hit $13.6 billion by 2028, but policies may choke the very ecosystem fueling that growth.
Kenya: Protest as Policy Feedback
Kenya’s Digital Service Tax and e-levy-type measures sparked backlash from creators and entrepreneurs alike.
Youth-led protests in 2024 forced the government to reconsider aspects of its Finance Bill.
The lesson: policy without stakeholder engagement breeds resistance — especially from a digitally savvy, politically aware Gen Z population.
Ghana: The E-Levy Experiment
Ghana’s e-levy on mobile money was meant to broaden the tax net. Instead, it shrank digital transactions by as much as 30% in its early months.
For small creative entrepreneurs, it felt like a tax on survival. Many reverted to cash, undermining the government’s push for a digital economy.
Global Comparisons: What Africa Can Learn
South Korea: Invested in K-Pop infrastructure, then taxed sustainably once the industry scaled. Now reaps billions annually in tax revenue from global entertainment exports.
Brazil: Built flexible tax exemptions for creative industries in early growth phases, treating them like national assets. The result: a thriving film and music ecosystem.
Europe: The EU’s Digital Markets Act prioritizes fairer returns for creators, balancing taxation with ecosystem health.
Africa doesn’t lack models — it lacks political will to prioritize the creative economy as economic infrastructure, not just a tax base.
What Needs to Happen: From Extraction to Empowerment
If Africa wants to truly harness its creative economy, tax policy must shift from extraction to empowerment.
Tax the Platforms, Not the Creators: Governments must ensure VAT and DST fall on multinationals, not individuals hustling to survive.
Invest in Creative Infrastructure: Taxes collected from digital platforms should be reinvested into local creative infrastructure: safe venues, digital payment systems, training hubs.
Protect Exports with Smarter Treaties: Negotiate stronger double taxation agreements to ensure revenue from Afrobeats concerts in London or Nollywood licensing on Netflix returns home fairly.
Create On-Ramps for Informal Creators: Instead of forcing compliance through blunt taxes, governments should build incentives — micro-tax regimes, creative sector grants, tax holidays for startups.
Closing Beat: Who Gets to Survive?
Africa’s creative economy is one of its greatest growth stories. It’s projected to add millions of jobs by 2030, driven by music, film, gaming, and digital content. But without smarter tax policies, much of that potential will remain untapped.
The choice is stark: treat creators as easy tax targets, or as the backbone of a future economy. Taxation, done wrong, risks stifling Africa’s most dynamic export. Done right, it could transform streaming into sustainable incomes, selling into global exports, and surviving into thriving.
Until then, every stream, every sale, and every survival story remains a negotiation — not just with platforms, but with the states meant to protect them.
A guest post by
A curious mind exploring the crossroads of creativity and insight.