Nigeria’s 0.5% Cybersecurity Levy Issued by CBN Stir Emotions

Implementing the 0.5% cybersecurity levy on all bank transactions has sparked a great deal of unhappiness among Nigerians. The Central Bank of Nigeria (CBN) announced on Monday that the charge would go into effect two weeks from May 6 in a circular sent to financial institutions, including merchant, non-interest, payment service, and commercial banks.

The charge must be applied when initiating an electronic transfer, after which the financial institution must deduct and remit the amount. The amount withheld will be shown as a “Cybersecurity Levy” on the customer’s account.

Section of the order stated: “Monthly remittance of the levies collected in bulk to the NCF account domiciled at the CBN by the fifth business day of every subsequent month, and deductions shall commence within two weeks from the date of this circular for all financial institutions.”

Nigerians have expressed utmost displeasure and cited the fact that several fees are making banking transactions more and more expensive. “In a country plagued by hardship, poverty, & unemployment, the Federal government has introduced new cyber security levies,” according to Sarki, an X user. Another user, Lola Okunrin wrote, “Cybersecurity Levy in a country where it looks like bank staff are giving out our banking details to scammers”, We are paying for a completely unsafe cyberspace.

The Nigeria Labour Congress and the Socio-Economic Rights and Accountability Project (SERAP) have intervened and demanded that the instruction be rescinded. The Cybercrimes Act 2024’s section 44 and other harsh provisions should not be enforced, according to SERAP’s request that Nuhu Ribadu and the Office of the National Security Adviser (NSA) stop their enforcement. The group urged President Bola Tinubu’s administration to revoke the “arbitrary and illegal directive” the CBN gave within 48 hours, according to a statement released by Deputy Director Kolawole Oluwadare of SERAP. According to the group, Nigeria is a signatory to the African Charter on Human and Peoples’ Rights, the International Covenant on Civil and Political Rights, and the Nigerian Constitution, all of which are flagrantly violated by these actions.

“SERAP shall consider appropriate legal actions to compel the Tinubu administration to comply with our request in the public interest if the unlawful CBN directive is not withdrawn and appropriate steps are not taken to amend the repressive provisions of the Cybercrimes Act within 48 hours.”

“Removing the illegal CBN directive and removing the oppressive elements of the Cybercrimes Act 2024 will be fully compliant with President Tinubu’s constitutional oath of office, which mandates public servants to preserve the constitution, the rule of law, and refrain from any improper actions,” the statement stated in sections.

The charge on electronic transactions has drawn criticism from the NLC, which claims that it unfairly punishes vulnerable groups and workers. The union stated that while it acknowledges the significance of cybersecurity in the current digital world, it is inexcusable to impose such a tax on electronic transactions without taking into account the potential effects on employees and other vulnerable groups in society.

In a press release, the president of the Nigeria Labour Congress stated that “this fee is described as another tax that is too onerous for the people of Nigeria, adding to their already heavy financial load.” “This levy is yet another attempt by the ruling class to extort and exploit poor, defenceless Nigerians so that their cronies in the financial centres can carry on indulging in reckless spending. In our most recent May Day speech, we urged the government to put the welfare of Nigerian workers and the general populace above profit-seeking, which puts further strain on the populace, in policy decisions and actions.

We question whether the government intends to encourage people to return to carrying cash and conducting cash transactions rather than using electronic transfers, which appear to be harming individuals, especially when it became illegal for people to save their little salaries in the banks.

“The wider impact on routine transactions cannot be disregarded, even though the CBN has exempted loan transactions and interbank transfers from this charge. The statement stated that such deductions further reduce the purchasing power of the average citizen and have a direct impact on workers’ disposable income.

Nigerians continue to express their opinions on the matter, and Peter Obi, the presidential candidate of the Labour Party, criticized the implementation of the cybersecurity levy, claiming it will further burden the country’s already declining economy. On his X account on Wednesday, Obi voiced his serious concerns about the government’s decision. He claimed that such measures deepen poverty and reduce the nation’s economic competitiveness.