In a bid to enhance Nigeria’s cybersecurity defenses, Nigerian banks and fintech companies will soon introduce a 0.5% levy on applicable electronic transactions. The Central Bank of Nigeria (CBN) recently announced this new measure, which will take effect from May 20, 2024.
The introduction of the levy comes as concerns grow over the rising instances of cybercrime targeting financial institutions in Nigeria. Mandated by the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024, this levy aims to generate funds for the National Cybersecurity Fund managed by the Office of the National Security Adviser.
Under the new regulation, users can expect an additional charge of 0.5% on various electronic transactions, such as online payments, electronic and mobile funds transfers, point-of-sale (POS) transactions, and potentially, ATM withdrawals. However, the CBN has clarified that certain transactions are exempt from this levy, including loan disbursements and repayments, salary payments, specific intra-bank and inter-bank transfers, cheque clearings, and savings deposits.
While proponents argue that the levy is crucial in combatting cyber threats, critics have raised concerns regarding its potential impact on Nigerians, especially those heavily reliant on digital payments. The additional 0.5% cost may discourage cashless transactions and hinder ongoing efforts to promote financial inclusion. Additionally, ensuring transparency in the allocation and utilization of the collected funds remains a key concern.
Failure to comply with the new regulation may result in penalties, with businesses that fail to deduct and remit the levy facing fines of up to 2% of their annual turnover.
The implementation of the cybersecurity levy on electronic transactions represents a significant step forward in fortifying Nigeria’s cybersecurity infrastructure. However, it is crucial for stakeholders to address the concerns raised by critics and work towards establishing transparency in the utilization of the collected funds. By doing so, Nigeria can strive towards a more secure digital landscape while ensuring continued financial inclusion for its citizens.
