The Central Bank of Nigeria (CBN) recently directed banks to initiate the deduction of a cybersecurity levy to be administered by the Office of the National Security Adviser (NSA). This levy, mandated by the 2024 Cybercrime (Prohibition, Prevention, etc.) Amendment Act, entails a 0.5% deduction from the value of all electronic transactions to be channelled to the National Cyber Security Fund overseen by the NSA.
While the levy applies to all electronic transactions and will be implemented at the point of transfer origination, the CBN has exempted 16 transaction types from this levy. These exemptions include:
- Loan disbursements and repayments
- Salary payments
- Intra-account transfers within the same bank or between different banks for the same customer
- Intra-bank transfers between customers of the same bank
- Other Financial Institutions (OFIs) instructions to their correspondent
- Banks Interbank placements
- Banks’ transfers to CBN and vice versa
- Inter-branch transfers within a bank
- Cheques clearing and settlements
- Letters of Credits (LCs)
- Banks’ recapitalization-related funding – only bulk funds movement from collection accounts
- Savings and deposits including transactions involving long-term investments such as Treasury Bills, Bonds, and Commercial Papers.
- Government Social Welfare Programs transactions e.g., Pension payments
- Non-profit and charitable transactions including donations to registered nonprofit organizations or charities.
- Educational Institutions transactions, including tuition payments and other transactions involving schools, universities, or other educational institutions.
- Transactions involving the bank’s internal accounts include suspense accounts, clearing accounts, profit and loss accounts, inter-branch accounts, reserve accounts, nostro and vostro accounts, and escrow accounts.
Reactions from Nigerians
In response to the announcement of the cybersecurity levy, there has been widespread criticism from Nigerians. Many argue that the timing of the levy, amid economic challenges and high inflation, is inappropriate. Mr. Akin Olaoye, Founder and CEO of House of Lunettes, described the levy as highly misguided, particularly given the lack of transparency in NSA expenditures.
Mr. Victor Asemota, a serial tech entrepreneur, suggested that the government should have allowed telecom operators to increase tariffs instead of introducing the cybersecurity levy. He questioned the logic of raising taxes while restraining telcos from tariff adjustments, suggesting that taxing telco price increases would yield more revenue.
Another social media user, Uncle Jay, expressed dismay at the levy, describing the 0.50% charge as excessive. As a more reasonable alternative, he proposed a flat fee of 2 naira for transactions above N10,000.
