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CBN clarifies suspension of cybersecurity levy

…withdraws 2024-2025 Policy Guidelines Amid Misrepresentation

The Central Bank of Nigeria (CBN) has temporarily withdrawn its biennial Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines for 2024-2025 following widespread media misreporting.

This decision comes in light of misunderstandings surrounding the now-suspended Cybersecurity Levy, initially mentioned in the guidelines published on September 17, 2024.

In a detailed statement, the CBN clarified that the levy had been suspended since May 2024, following public outcry and a decision by the Federal Executive Council (FEC).

The CBN explained that the guidelines were intended as a reference to past policies and directives issued up to December 31, 2023, and not as new regulations.

However, some media outlets misrepresented the information, which has prompted the temporary withdrawal of the document.

The cybersecurity levy, which had its roots in the Cybercrime Prevention and Prohibition Amendment Act of 2024, was originally mandated by the CBN for collection by commercial banks, payment service providers, and non-interest banks.

These institutions were to remit the levy to the appropriate authorities to enhance the nation’s cybersecurity infrastructure. However, due to strong public resistance, the Federal Executive Council opted to suspend the levy during its last meeting in May 2024.

In line with the FEC’s decision, the CBN formally withdrew its earlier circular instructing financial institutions to collect and remit the levy.

Read Also: ‘Cybersecurity Levy failed due to poor communication’

This development was communicated to relevant stakeholders through a circular that superseded previous directives.

The CBN stated that the withdrawal was made to “minimize risk of any further misrepresentation” and ensure clarity in the nation’s cybersecurity framework.

The CBN emphasized that the primary aim of its biennial guidelines is to provide stakeholders with a comprehensive reference for monetary, credit, foreign trade, and exchange policies.

The document, the CBN noted, is not a collection of new policies but a compendium of previously issued directives and guidelines, meant to streamline access to policy information for stakeholders.

According to the CBN, the guidelines serve three core purposes. First, they act as a single reference source for stakeholders, allowing for ease and convenience when navigating CBN policy. Second, they serve as a basis for adjudicating policy conflicts involving stakeholders, providing a valid framework for resolving disputes.

Third, the guidelines offer additional clarification on CBN policies and directives, ensuring stakeholders understand and apply the policies correctly.

The apex bank reiterated that the provisions in the guidelines are only applicable to the extent that no updates or revisions have been made to the policies contained therein.

The bank further stated that recent amendments and revisions to certain policies—particularly in 2024—have rendered parts of the guidelines outdated.

The bank pointed out that, in line with previous editions, the most recent publication (January 2024) includes policies and guidelines that were in effect up to December 31, 2023.

While some of these policies will remain relevant through 2024 and 2025, many others will no longer apply due to subsequent revisions or updates.

This clarification is critical, the CBN said, to prevent further misunderstandings about the applicability of outdated policies.

September 20, 2024
Cybersecurity levy: ‘Direct your anger at lawmakers, not Tinubu’

The Social Democratic Party (SDP) presidential candidate in last year’s general election, Prince Adewole Adebayo, has urged fellow Nigerians to direct their anger about the cybersecurity levy to the lawmakers at the National Assembly and not at President Bola Tinubu.

Addressing an interactive session of the Nigeria Leadership Series hosted by the Africa Leadership Group, Adebayo said President Tinubu did not pass the law but the National Assembly did.

He said: “Your representatives passed the law. The media carried the news of the law when it was passed. So, if you don’t want the levy, stop talking about Tinubu. Just tell every member of House of Representatives and your senators that within 48 hours, they must bring a repeal of that law.

Read Also: Cybersecurity levy

“The government is not one person. It’s a good thing that the President has suspended the operation of the levy. But the way government works is that you must ensure that if you are against that levy, as I am against it, you need to let your representatives go there now and repel the law. If the law is repealed, there will be no levy to pay.

“So, we need to have a deeper understanding of our government. I am an SDP politician. When government brings a policy and we are discussing the good or bad side of the policy, I always ask my fellow party people: how did the elected SDP members vote?”

May 24, 2024
Cybersecurity levy

•Its suspension would enable government clear suspicions, confusion

It took a circular from the Central Bank of Nigeria (CBN) directing all money deposit banks to ensure deduction of a levy of 0.5 per cent from all electronic transfers to a dedicated account for the Office of the National Security Adviser (ONSA) to combat cyber crime. The fund is said to have been necessitated by the growing incidents of cybercrimes in the country.

The Nigerian cyber space has been bedevilled by so many attacks that have the tendency to erode interest and confidence in banking and the financial system generally. The May 6 CBN circular that mandated banks to effect deductions from May 20 was seen by many as one tax too many.

However, following intervention by federal lawmakers, around which protests galvanised, the President instructed a suspension of the levy’s payment.

This is the way to go in a democracy where public opinion is respected by elected officials.

The CBN has argued that its action is in line with the Cybercrimes Prevention Act of 2015, amended in February, 2024.

However, the confusion and outcry came from the attempt by the apex bank to push the payment to all bank customers, save some specified exemptions, whereas the act expects only some corporate bodies to pay.

Read Also: NBS: Nigeria had 250,227 policemen in 2022

As government banker that also has supervisory authority over all the banks, we expect the CBN to have thoroughly studied the act, taking advice from its legal department. The flip flop is unnecessary and avoidable at a time when most people are impacted by the state of the economy.

Already, bank customers are unhappy with their banks because of the myriad of inexplicable charges on their accounts. To add any other, however meager, could only have provoked the kind of outcry witnessed in the past week.

For the apex bank to be robed in dignity, it must be seen to be independent, indeed. A direct instruction by the President for withdrawal or suspension of the circular is not neat, and should be avoided in days ahead. The bank’s governor who is its symbol should ensure professionalism and thoroughness in all its actions, be it in relation to the banks it supervises or the general public.

It’s good that the National Assembly has stepped in by inviting the bank’s managers to come and explain what happened. This is within the lawmakers’ powers and we expect that an improved circular in line with the law will emanate from the authorities. Cybercimes are source of concern all over the world and truly deserve special attention by the security, but does the ONSA have the capacity to handle the assignment, especially the trillions expected to be generated? This should be examined by both the legislators and the executive.

One other lesson to learn from the hoopla is that people should not wait until a law or policy is given effect before they examine and react to it. Those who have taken the government to court would have saved the country so much trouble if they had actively participated in the lawmaking process. The public hearing by relevant committees of the legislature is incorporated into the process to allow citizens participate.

May 23, 2024
Cybersecurity levy: Why implementation can’t take off

The Central Bank of Nigeria (CBN) is expected to direct banks to suspend the implementation of the Cybersecurity Levy billed to begin on Monday, it was learnt at the weekend.

There has been an outcry since the CBN circular to banks on the levy was made public.

A source in the Presidency said the President, given his sensitivity to the plight of Nigerians under the current economic conditions, would not allow anything that would further stress the citizens.

Confirming the development to The Nation yesterday in Abuja, another Presidency source said the implementation of the Act was an Office of the National Security Adviser (ONSA) affair, with the CBN playing the middle role.

“He (The President) didn’t order the CBN. That is a wrong slant. It is not a CBN action; it is an ONSA action. The CBN only issued the circular to banks as implementing institutions.

“The President simply stopped the implementation for now to avoid putting extra burden on Nigerians. The NSA also didn’t get his approval before implementing the provision of the Cybersecurity Act.

“It is wrong to say he (NSA) ordered the CBN to stop. The CBN is not the originator of the action. It is the NSA,” the source added.

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A CBN source said banks are expected to get an order to “ignore the implementation directive” this week.

The CBN official explained that the apex bank does not have the power to repeal any law but would engage the banks not to implement the cybersecurity levy deductions.

Reacting to the development, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, said the Act, which originated from 2015, belongs in the category of old laws that his committee was working on.

“The law you’re talking about, I’m sure you’re referring to the Cybersecurity Levy. It is a law of 2015. So, these are the past issues we’re trying to deal with. That law was recently amended. But even the levy was in the original 2015 version. So, you can talk about the rates.

“We have to admit and recognise that these problems will not disappear overnight. It’s work in progress. We have not even submitted our work to the National Assembly,” he said.

Also, Senate Chief Whip Ali Ndume has praised President Tinubu for listening to Nigerians’ complaints and halting the implementation of the levy.

In an interview yesterday on a television programme, the Borno South Senator said: “It’s good that the President has now acted and we will go back to the drawing table to look at the Act again.”

May 13, 2024
Cybersecurity levy

Are ordinary Nigerians excluded from the 0.5 per cent cybersecurity levy on all electronic transactions which the Central Bank of Nigeria CBN directed financial institutions to commence immediate collection? That is the big question the House of Representatives is spurring to entangle.

In a circular last week, the CBN directed commercial, merchant, non-interest and payment service banks, other financial institutions, mobile money operators and payment service providers to deduct a levy of 0.5 per cent (0.005) equivalent to a half per cent from all electronic transactions. The apex bank cited the enactment of the cybercrime (prohibition, prevention, etc) (amendment) Act 2024 and the provisions of section 44(a) of the Act to back up the order.

By the terms of the circular, the deducted sum is to be remitted to the National Cybersecurity Fund (NCF) and to be administered by the Office of the National Security Adviser (ONSA). Offenders are liable on conviction, to a fine of not less than two per cent of the annual turnover of the defaulting business.

But the House of Representatives has cried foul and ordered the CBN to suspend implementation of the cybersecurity levy. It said the circular by the apex bank negates the spirits and letters of section 44(2a) of the Cybercrime Act. The section listed those to pay the levy as GSM and telecom companies, internet providers, banks and other financial institutions, insurance companies and stock exchange.

The House directed the CBN to withdraw the circular; issue another in its place as the impression created is that the levy is to be paid by the ordinary citizens. This misconception, the House reasoned, was responsible for the furore trailing the directive. That was the new twist the circular took at the weekend.

The observations of the House of Representatives illustrate the glaring ambiguities and misunderstanding that trailed the CBN directive since it became public knowledge. Reactions to the circular have been quite adverse.

Public perception of the CBN directive was that the burden of the 0.5 per cent deductions from all electronic money transactions is to be borne by Nigerians at the point of transaction. This reading accounted for the avalanche of criticisms, ultimatums and threats that became the sad fate of the directive. Much of the reservations on the cybersecurity levy had centred on the propriety of burdening the hapless and suffering poor citizens with the added responsibility of paying for cybercrime fighting. It also raised the question of the role and responsibility of the government in maintaining law and order.

No doubt, cybercrimes of all hue have wrought incalculable harm on the national economy. Not only does it lead to huge losses of depositors’ funds diminishing confidence in the banking system, it is one criminal activity that has continued to paint the country black especially in the eyes of the international community.

The rate at which our youths (both the educated and not well-educated) take quick resort to such criminalities is bound to give serious concern to all and sundry.

Effective measures including equipping the various government crime-fighting agencies with sufficient tools and funds to decisively confront this manner of criminality cannot but attract the support of all fair-minded Nigerians. So why the hullabaloo about the cyber security levy? Why is everybody seemingly up in arms against the levy? This poser is the basis for the intervention of the House of Representatives directing that the levy be halted henceforth.

So, the issue is not as much with the propriety of adequately funding cybercrime fighting as with the confusion created by the CBN circular regarding those that should pay the levy. As far as the House members are concerned, the wordings of the CBN circular conveyed the erroneous impression that individual Nigerians are to pay the levy.

But there is nowhere in the letters of the relevant schedule of the Act that it was explicitly so stated. Rather, the Act was unambiguous in listing the financial institutions that are to be charged the cyber security levy.

How the CBN arrived at the idea of individuals paying the levy at the point of transaction is the raison d’être for the House directing that the memo be withdrawn. And in its place, a new one that reflects the letters and spirits of the Act be issued.

The observations of the House are very fundamental. Coincidentally, they hinge on all the reservations that have been expressed about the levy. Much of the criticisms have centred around the rationale for shifting the burden of cybercrime fighting to the ordinary citizenry especially at this period of general hardship occasioned by hyperinflationary trend arising from government policies?

Issues have also been canvassed regarding the prospects of the new levy suffocating the citizens already overburdened by such multiplicity of taxes as services charges, Value Added Tax, Stamp Duty and sundry deduction made while withdrawing cash at the Point of Sales POS centres.

That is not all. The cyber security levy is also loaded with the frightening prospects of making a mess all the gains from the cashless policy of the government-a policy that Nigerians cannot forget in a hurry for the injuries it inflicted on their collective psyche when it was being introduced.

The new levy will further drive people into more patronage of cash transactions and use of the cheques as safeguard against the harsh economic realities that have significantly eroded their real income and purchasing power. Inflation will further rise even as the ability of the CBN to effectively control the money in circulation will face additional hurdles.

A decisive war against cybercrimes is a compelling imperative. But the thinking that the burden must be borne by the ordinary people is highly misplaced. It is misplaced against the background of the existential challenges it is bound to impose on peoples’ lives as they contend with the excruciating consequences of the policies of the government on subsidy removal among others. It is also misplaced for placing higher premium on funding as if it is a guarantee for waging a successful war against cybercrime.

The Nigerian Communications Commission in a recent report claimed that Nigeria is “losing $500 million annually to all forms of cybercrimes including hacking, identity theft, cyber terrorism, harassment and internet fraud”.

Read Also: Tinubu suspends cybersecurity levy policy implementation

That may be a rough estimate of the losses as the figures may be even higher. But it underscores the enormity of the challenge posed by cybercrimes to the country’s financial system. That would seem enough justification for the new cybersecurity levy.

But it goes with the underlying assumption that the money to be generated would be ploughed judiciously into cybercrime fighting. The profligacy and glaring mismanagement of funds in public offices do not give much confidence in this regard. That is however, beside the point.

Issues have also been raised on the rationale in domiciling the remittance of the levy into the National Cybersecurity Fund (NCF) ostensibly to be administered by the Office of the National Security Adviser (ONSA). The Nigerian Interbank Settlement System (NIBSS) in a report, said electronic payments on its platform in 2023 stood at N600 trillion. 0.5 per cent of this amounts to N3 trillion. This, by all standards is really huge.

The proper thing is for such funds to be paid into the Consolidated Fund for the National Assembly to make the necessary appropriations. This would make for probity and accountability in the use of public funds.

The House has taken the rightful lead in raising issues with the impression conveyed by the CBN circular on those listed by the Act to pay the levy. That such ambiguities in the interpretation of the cybercrime Act should arise is really sad and unfortunate.

The House order for the halting of the levy implementation before it overburdens the citizenry in error is the proper thing to do. It should also instruct a cybersecurity funding strategy involving the government, the regulatory bodies and stakeholders.

But the burden must be lifted from the shoulders of the ordinary people. It would amount to one levy, too many!

May 13, 2024
Tinubu suspends cybersecurity levy policy implementation

Details have emerged over the weekend on why President Bola Tinubu instructed the Office of National Security Adviser (ONSA) to suspend the implementation of the cybersecurity levy policy.

A reliable presidency source on Sunday, May 12, said President Tinubu directed the suspension of the policy because the National Security Adviser (NSA) did not get the proper approval before embarking on the implementation of that provision of the Cybersecurity Act.

The source further revealed that the President is abreast of the current economic situation in the country and would not wish that the situation is compounded with new taxes, hence his reason for directing the proper authority in the implementation of the provision, the ONSA, to hold back.

President Tinubu was reported over the weekend to have instructed the suspension of the implementation of the provision policy.

This followed widespread negative reaction to the new instruction with the National Assembly also calling for the suspension of the implementation.

Confirming the development to The Nation on Sunday, the Presidency source, who preferred anonymity, said the implementation or suspension order was an ONSA affair as the Act is directly related to the office and the Central Bank of Nigeria (CBN) just playing the middle role.

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He said President Tinubu gave the suspension directive because he would not want Nigerians to be over-burdened with economic pressures.

He further noted that had the proper consultations for approval were sought, the level would not have been an issue at the moment, considering the economic situation that citizens are currently having to content with.

“He didn’t order CBN. That is a wrong slant. It is a not a CBN action, It is an ONSA action, CBN only issued circular to banks as implementing institutions

“The President simply stopped the implementation for now so as not to put extra burden on Nigerians. NSA also didn’t get his approval before implementing the provision of the Cybersecurity Act

“It is wrong to say he ordered CBN to stop, CBN is not the originator of the action. It is NSA”, the source said.

The CBN had on May 6, 2024, issued a circular to concerned financial institutions, informing of the plan to start implementation of the National Cybersecurity Fund (NCF), which will be administered by the ONSA.

“Following the enactment of the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024 and under the provision of Section 44 (2)(a) of the Act, a levy of 0.5 per cent (0.005) equivalent to a half per cent of all electronic transactions value by the business specified in the Second Schedule of the Act.

“The levy shall be applied at the point of electronic transfer origination, then deducted and remitted by the financial institution. The deducted amount shall be reflected in the customer’s account with the narration, ‘Cybersecurity Levy’”, it said.

Meanwhile, reacting to the wind that gathered around the Cybersecurity Levy, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, said the Act, which originated from 2015, belongs in the category of old laws that his Committee is working on, assuring that it would be sorted out along the line.

“The law you’re talking about, I’m sure you’re referring to the Cyber Security Levy, is a law of 2015. So these are the past issues we’re trying to deal with. That law was recently amended, but even the levy was in the original 2015 version, so you can talk about the rates.

“We have to admit and recognize that these problems will not disappear overnight, it’s work in progress. We have not even submitted our work to the National Assembly.

“So our expectation is, as we progress now from ideation, proposal to implementation, you’ll see less and less of those issues and then you’ll see that harmony in the direction of the fiscal system, not only in the number of taxes we collect being very few, with threshold for poor people and small businesses, you will also see an improvement in how those monies are being spent in terms of priority of spending, in terms of the efficiency of spending, and then in terms of focusing on what impacts on the lives of majority of our population who live in multi-dimensional poverty. That is the direction we’re going and we’re positive about that”, he said.

May 12, 2024
Cybersecurity levy aimed at financial institutions, telecoms, not Individuals, says Senate panel

Chairman, Senate Committee on National Security and Intelligence, Senator Shehu Umar Buba, on Sunday, May 12, explained that the recently introduced cybersecurity levy by the Central Bank of Nigeria (CBN) is not targeted at individuals or bank customers.

Buba representing Bauchi South on the platform of the All Progressives Congress (APC), sponsored the amendment to the Cybercrime Act.

According to a statement in Abuja, Buba said the levy would be charged on only financial institutions and telecom companies.

He said this has become necessary because the finance and telecoms sectors are the most vulnerable to financial crimes and cyber fraud and also to enhance cybersecurity measures and national security in the country.

He noted that the amended section of the Cybercrime Act is very clear about the businesses that are required to pay the levy, not the citizens.

The statement reads in part: “The Act is very explicit about who is responsible for the payment, not Nigerian citizens or individuals. The relevant Section of the Cybercrime Act 2015 listed the businesses required to pay the levy.

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“They include telecommunications companies, Internet Service Providers, Banks, Insurance Companies, the Nigerian Stock Exchange, and other Financial Institutions.

“The organisations in the sectors have been listed in previous circulars by the Central Bank of Nigeria, especially in 2018. The new circular by the CBN further provided many exemptions.”

Senator Buba also clearly explained the amount payable as a cybersecurity levy.

“It is either 0.005 or 0.5% arithmetically. The figure in the Principal Act was 0.005 as a fraction, which was converted to the percentage that became 0.5% in the amendment. Therefore, the statistics in fractions and percentages are the same,” he said.

The noted that the passage of the amendment bill was a collaborative effort of various stakeholders.

“The passage of the amendment bill was a collaborative effort involving the government, industry players, civil society, and academia in the contributions and active participation in the public hearing before and endorsement by the two chambers of the National Assembly.

“After rigorous processes, President Bola Ahmed Tinubu signed the Bill into law in February 2024,” he said.

He noted the outcry of Nigerians, civil society groups, and other stakeholders about the current economic situation but reassured that implementing the cybersecurity law was not meant to punish citizens.

He stressed that the levy is a collective effort to protect national security and the economy, with the financial burden primarily falling on the specified businesses.

Recall that the Cybercrime (Prohibition, Prevention, etc Amendment) Act 2024, which President Tinubu signed into law in February, imposes a 0.5 percent (0.005) levy equivalent to half the value of all electronic transactions by the businesses specified in the Second Schedule of the Act.

The levy will be remitted to the National Cybersecurity Fund, which the Office of the National Security Adviser (ONSA) shall administer.

The circular announcing the levy also exempted some transactions from the cybercrime levy, including loan disbursements and repayments, salary payments, intra-account transfers, and other financial transactions.

May 12, 2024
Cybersecurity Levy in best interest of national security, says group

A group, the Coalition of Civil Society Groups for Transparency and Accountability, has said the recently introduced Cyber security levy is in the best interest of all Nigerians.

According to the group, painful as this may be, the levy is inevitable, if the country must achieve the overall vision of the Cybercrimes (Prohibition, Prevention Etc) (Amendment) Act 2024.

The group called on Nigerians to embrace it and support the full implementation this Cybercrimes Levy.

Convener of the group, Comrade Igwe Ude-Umanta, at a briefing in Abuja on Saturday, distanced the office of the National Security Adviser as the collector of the levy.

They also called on the Federal Government to engage the citizens on what the levy is all about.

The CSO, said: “Let us expressly admit that many Nigerians are stressed and stretched and are therefore justified when they express displeasure and resistance to any form of levy or tax. Taxes and levies are not usually convenient for citizens, and this is a fact. However, the issue under discourse here is far more than the narrow and straight-jacket perspectives that have been promoted in the media.

“It is however incumbent on the Federal Government, particularly the CBN to provide the necessary enlightenment on this subject, and to engage stakeholders in achieving a seamless compliance. Right now, the right information is not in the public space and Nigerians cannot be blamed for regarding the levy with suspicion.

“As we now know, Section 44 (2)(a) of the Cybercrimes (Prohibition, Prevention Etc) (Amendment) Act 2024 imposes a levy of 0.5% or 0.005 of all electronic fund transfers from the accounts from where the transfers are emanating. Many exceptions have been listed thereto in order to avoid levying where it is unacceptable like, on salaries, loans, linked accounts etc.

“The problem with this levy appears to be more about the misinformation, misconceptions, distortions and even outright blackmail, mischief and politicization of the issue. For instance, many Nigerians have been misinformed that all their electronic transfers will be levied, contrary to the exceptions that are listed in the CBN’s Circular.

“The allegation that the Office of the National Security Adviser will serve as a Revenue Collection Agency in this matter is not only a blatant lie, but also a clearly calculated political mischief and a deliberate campaign against a matter of important National Security. For clarity, this levy is to be collected by the CBN through the Nigeria Inter-Bank Settlement System (NIBSS) PLC and domiciled in an account known as National Cybersecurity Fund (NCF). The National Security Adviser has nothing to with collecting the levy, keeping it or unilaterally dispensing of it. This narrative which has gained undue popularity is negative and in bad faith.

“It should be known that in the entire Cybercrime prevention architecture, the job of the National Security Adviser is that of coordination. There are other people in that set-up, including the Attorney General of the Federation who improves the legal framework; law enforcement, security and intelligence agencies who develop the institutional capacity required for the effective implementation of the Act and initiate, develop or organize national or international Cybercrime -related training programs.

“We must as a country never lose sight of the menace of Cybercrimes (internet-assisted crimes) including fraudulent electronic mails, identity theft, pornography, hacking, Cyber harassment, spamming and Automated Teller Machine (ATM) spoofing which apart from burgeoning in dimensions and an ever imminent danger to National Security, is also a wreck on the National Economy.

“Global economy is expected to lose $10.5 trillion per day by 2025 through Internet fraud known as Yahoo Yahoo. According to Federal Bureau of Investigation (FBI), Nigeria is ranked 16 in Cybercrime victims, and internet fraud cost the country more than 0.8% of its Gross Domestic Product (GDP) each year. This should bother us greatly, and we must be prepared to offer any sacrifice necessary to address this ever-growing problem and threat.

“Like we have suggested, government owes citizens a duty to explain this matter very well. It is a step in the right direction, but education is required.

“Let us state clearly that we support this levy, in spite of the sacrifice we have to make. It is a necessary sacrifice for a larger National Security interest. If we fail to protect our Cyberspace from the menace of hackers and sundry internet criminals, the consequences will be dire. It must be vigorously resisted and avoided.”

May 11, 2024
Northern Elders reject CBN’s cybersecurity levy, says, it’s illegal, insensitive

The Northern Elders Forum (NEF), a prominent socio-cultural organization representing the interests of the Northern region of Nigeria, has strongly condemned the Central Bank of Nigeria‘s recent decision to impose a cybersecurity levy on bank customers.

In a statement released by the NEF’s Director of Publicity and Advocacy, Abdul-Azeez Suleiman, the Forum expressed its dissatisfaction with the policy, citing the escalating costs associated with banking transactions as a result of multiple charges.

NEF described the CBN’s directive as arbitrary, illegal, and out of touch with the realities faced by Nigerians.

It therefore called on the Federal Government to reconsider the policy and explore alternative measures to ease the financial strain on individuals while still promoting the use of electronic payments.

The Northern Elders pointed out that the introduction of cybersecurity levies, in addition to existing fees such as stamp duty, transfer fees, value-added tax, and SMS charges, has placed an unbearable financial burden on individuals engaging in electronic transactions.

The forum highlighted the various charges that bank customers now face, including cybersecurity levies ranging from ₦5 on ₦1,000 to ₦50,000 on ₦10,000,000 transactions, transfer fees, stamp duty, and value-added tax.

NEF emphasized the need for a more balanced approach that ensures the costs of security measures are reasonable and do not excessively burden bank customers.

It argued: “These additional costs have significantly increased the overall expense of electronic transactions for both senders and receivers. While acknowledging the importance of cybersecurity in safeguarding electronic transactions.”

According to the statement, “In a country already grappling with economic challenges and hyperinflammatory conditions, the additional financial burden imposed by the cybersecurity levy is unjust and unfair and urged the government and relevant stakeholders to find a sustainable solution that strikes a fair balance between enhancing cybersecurity and alleviating the financial strain on the Nigerian populace.

Read Also: ‘Cybersecurity levy to tackle crimes, terrorism’

“It is imperative that the administration takes into account the concerns raised by a vast majority of Nigerians and prioritizes policies that protect the interests of the people while also fostering economic growth and development.

“The forum’s stance highlights the importance of considering the impact of regulations on ordinary citizens and advocating for measures that promote financial inclusion and alleviate economic challenges.

“It is crucial that the government listens to the concerns of organizations like the NEF and works towards implementing policies that benefit all Nigerians, rather than burdening them with additional costs and hardships.

“It is essential to strike a delicate balance between enhancing cybersecurity and easing the financial burden on the populace, particularly at a time when the Nigerian economy is facing significant challenges due to inflation and other economic factors,” Suleiman said.

It however urged the authorities and relevant stakeholders to engage in meaningful review and find a solution that addresses the legitimate concerns raised by the public regarding the cybersecurity levy.

May 9, 2024
‘Cybersecurity levy to tackle crimes, terrorism’

• N273b lost to cybercrime in 2022

The Presidency yesterday said the cybersecurity levy was introduced to tackle cybercrimes and terrorism.

It said the nation lost over N273billion (approximately $762million) to cybercrime alone in 2022.

It also claimed that the same levy is in place in Ghana and Rwanda.

Opposition to the policy grew yesterday, with the Trade Union Congress (TUC), ex-Labour Party (LP) presidential candidate Peter Obi, and the Coalition of Northern Groups (CNG) rejecting it.

A top source, who spoke in confidence with our correspondent, said the Federal Government “cannot be blind to the grievous effects of cybercrimes on the nation’s economy.”

The source made the clarification against the backdrop of the mounting criticisms on the inclusion of Cybersecurity Fund in the Cybercrime Act 2024.

The source said: “The Cybercrime Act 2024 is meant to protect the nation’s economy from collapse; it is not targeted at the masses. Those criticizing the Act do not have the full knowledge of the rationale behind it.

“According to the Nigeria Inter-Bank Settlement System (NIBSS), the Nigerian banking sector lost over N273 billion (approximately $762 million) to cybercrime in 2022 alone.

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“Apart from that, there have been SIM-swapping attacks on Nigerian banks since 2019 to date.

“Flutterwave, a leading African fintech company, has faced several allegations of security breaches in recent months amounting to millions of dollars in losses to customers.

“Even the Nigerian National Identity Management Commission (NIMC) has put adequate security in place to check incidents of data breaches.”

The source said the inherent benefits of the Cybercrime Act are contained in Section 44 of the Cybercrime Act.

He said Section 44 was designed for National Cyber Security Fund in which a levy of 0.005 of all electronic transactions b by some businesses to fight cybercrimes and terrorism.

The source added: “Contrary to insinuations, the Fund will be domiciled in the Central Bank within a period of 30 days.

“Also, an amount not exceeding 40 percent of the Fund may be allocated for programmes relating to countering violent extremism.

“The Federal Government is well-intended with the Cybercrime Act 2024. We live in a global village in Africa, we cannot afford to ignore the reality of the threats of cybercrimes to our economic survival.

“The management of the Cyber Security Fund has enough checks and balances to prevent abuse. This government is determined to fight cybercrime.”

Section 44 of the Act reads: “(1) There is established the National Cyber Security Fund (in this Act referred to as “the Fund”).

“(2) There shall be paid and credited into the Fund established under subsection (1) of this section and domiciled in the Central Bank of Nigeria-

(a) a levy of 0.005 of all electronic transactions by the businesses specified in the Second Schedule to this Act;

(b) grants-in-aid and assistance from donor, bilateral and multilateral agencies;

(c) all other sums accruing to the Fund by way of gifts, endowments, bequest or other voluntary contributions by persons and organisations:

“Provided that the terms and conditions attached to such gifts, endowments bequest or contributions will not jeopardise the functions of the Council:

(d) such monies as may be appropriated for the Fund by the National Assembly; and

(e) all other monies or assets that may, from time to time, accrue to the Fund.

“(3) All monies accruing to the Fund shall be exempted from income tax and all contributions to the Fund shall be tax deductible.

“(4) The levy imposed under subsection 2(a) shall be remitted directly by the affected businesses or organizations into the Fund domiciled in the Central Bank within a period of 30 days.

“(5) An amount not exceeding 40 percent of the Fund may be allocated for programs relating to countering violent extremism.

“(6) The Office of the National Security Adviser shall keep proper records of the accounts.

“(7) The Account of the Fund shall be audited in accordance with guidelines provided by the Auditor-General of the Federation.”

Wave of opposition, rejections

The TUC rejected the planned cybersecurity levy.

Its President, Comrade Festus Osifo, in a statement, urged the Federal Government to give a “marching order to the CBN to immediately withdraw the circular and cancel the planned levy forthwith.”

The statement reads: “It is indeed illogical that this is coming at a time that Nigerians are grappling with the high cost of living that is imposed by the devaluation of Naira, hyper hike in the cost of Petrol, supersonic increment in the cost of electricity tariff, etc.

“Whereas a bank account holder in Nigeria today is currently charged stamp duty, transfer fee, VAT on transfer fee, and all forms of account maintenance levies by both government and the banks.

“So many policies of this government are not only imposing hardship on the downtrodden Nigerians but also on businesses, as some of them are shutting down because of the unfriendly business environment.

“The National Assembly that ought to be the bastion of democracy and the protector of the citizens oftentimes engages in collusion with elements within the executive to exploit the people. “

Obi faulted the levy, saying it was another form of taxation at a time when the government should be nurturing economic recovery and growth.

He said: “The introduction of yet another tax, in the form of Cybersecurity Levy, on Nigerians who are already suffering severe economic distress is further proof that the government is more interested in milking a dying economy instead of nurturing it to recovery and growth.

“This does not only amount to multiple taxation on banking transactions, which are already subject to various other taxes including stamp duties, but negates the government’s avowed commitment to reduce the number of taxes and streamline the tax system.

“The imposition of a Cybersecurity Levy on bank transactions is particularly sad given that the tax is on the trading capital of businesses and not on their profit hence will further erode whatever is left of their remaining capital, after the impact of the Naira devaluation high inflation rate.”

“It is inconceivable to expect the suffering citizens of Nigeria to separately fund all activities of the government.

“Policies such as this not only impoverish the citizens but make the country’s economic environment less competitive.

“At a time when the government should be reducing taxes to curb inflation, the government is instead introducing new taxes. And when did the office of the NSA become a revenue-collecting centre?

“And why should that purely national security office receive returns on a specific tax as stated in the new cybersecurity law?”

Also, the CNG, rejected the proposal, saying it was anti-masses and insensitive.

In a statement its National Coordinator, Jamilu Charanchi, CNG said: “This levy, which is expected to be effective within the next two weeks, exemplified the Federal Government’s lack of compassion and empathy to the plight of Nigerians in the face of the current economic hardship.

“It is crass heartlessness that is a sequel to fuel subsidy removal which now took fuel above N1000 per litre and the electricity tariff abruptly soaring.

“It is tantamount to another daily-light extortion in the offing by the government that came to be through democratic processes.”

May 9, 2024