Emmanuel OchayiCybersecurity Levy Slashed by CBN
The Central Bank of Nigeria (CBN) has made a significant reduction in the cybersecurity levy on electronic transactions, lowering the rate from 0.5% to 0.005%.
This decision comes after months of public outcry and protests against the original rate, which many saw as detrimental to financial inclusion and consumer protection.
Join our WhatsApp ChannelThe new levy rate is part of the CBN’s 2024-2025 fiscal guidelines and is mandated by the Cybercrime (Prohibition, Prevention, etc.) Act of 2015. The central bank emphasised that it remains committed to enforcing the levy on all electronic transactions processed by banks and financial institutions.
“The CBN shall continue to enforce the payment of the mandatory levy of 0.005% on all electronic transactions by banks and other financial institutions, as required by the Cybercrime Act,” a statement from the CBN read.
Backlash and Calls for Reduction
The reduction follows intense criticism from several groups, including the Nigeria Labour Congress (NLC), the Trade Union Congress (TUC), and bank customers. The initial 0.5% rate, introduced earlier this year, was met with significant resistance, with many arguing that the levy was too high and would place an undue burden on consumers and businesses.
According to Enhancing Financial Innovation and Access (EFInA), a prominent financial inclusion organisation, the high levy posed risks to Nigeria’s goal of boosting financial inclusion.
READ ALSO: CBN Directs Bank To Stop Implementation Of 0.5% Cybersecurity Levy On Transactions
“While the Cybercrimes Levy by the Federal Government is an effort to fund the strengthening of consumer protection in a fast-growing digital economy, the indirect impact of transferred costs to consumers that are already price-sensitive elevates the risk of further exclusion from formality,” EFInA noted.
Many consumers shared these concerns, with one bank customer saying, “At 0.5%, the levy was just too much. It felt like an extra tax every time I made a transaction. The government needs to consider how these things affect ordinary Nigerians.”
Focus on Cybersecurity
Despite the protests, the government has defended the cybersecurity levy as a necessary step to fund the National Cybersecurity Fund. The fund is administered by the Office of the National Security Adviser and aims to strengthen Nigeria’s cybersecurity infrastructure in the face of growing cyber threats.
The cybersecurity levy, according to the CBN, will apply to all electronic transactions conducted by commercial, merchant, non-interest, and payment service banks, among other financial institutions. However, certain transactions will be exempt, such as wage payments, loan disbursements and repayments, and transfers between the same bank accounts or between banks for the same client.
“Exemptions will apply to specific transactions, including intra-bank transfers, loan repayments, and cheque clearings,” the CBN clarified in its directive. These exemptions are meant to ensure that the levy does not disrupt critical financial operations.
Public Response to Reduction
The announcement of the reduced cybersecurity levy has been welcomed by many, although some remain skeptical. “This is a step in the right direction, but we need to see how this plays out in practice,” said a representative of the Nigeria Labour Congress. “Our concern is not just the rate but the transparency in how the funds are used.”
Others have called for the complete removal of the levy. “We understand the need for funding cybersecurity, but why should ordinary Nigerians bear the cost?” asked a customer during a recent protest in Lagos. “The government needs to find another way to fund these initiatives without burdening the public.”
Looking Ahead
The CBN’s decision to continue with the levy, albeit at a lower rate, is part of its broader monetary and exchange policy strategy in the coming fiscal years. In May, President Bola Tinubu ordered a suspension and review of the levy following widespread protests, and the House of Representatives also demanded its immediate withdrawal.
While the reduction in the rate may alleviate some of the concerns, it remains to be seen whether the levy will achieve its intended purpose of bolstering cybersecurity without further backlash from the public.
The central bank has assured Nigerians that the revised cybersecurity levy will be implemented fairly and will contribute to safeguarding the nation’s digital financial systems from cyber threats. Whether this reduction will truly balance the needs of security and affordability remains a topic of national discussion.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
