The Central Bank of Nigeria (CBN) has recently implemented a new directive that mandates a 0.5% cybersecurity levy on most electronic transactions. This move is part of the efforts to bolster the nation’s cybersecurity infrastructure in the wake of increasing digital threats. The levy, as stipulated by the Cybercrime (Prohibition, Prevention, etc.) (amendment) Act 2024, is to be remitted to the National Cybersecurity Fund (NCF), managed by the Office of the National Security Adviser (ONSA).
The cybersecurity levy is applied at the point of electronic transfer origination and is reflected in the customer’s account statement as “Cybersecurity Levy”. This directive exempts only 16 categories of transactions, including salaries, loans, cheques, and clearing and settlements, from the levy. The collected funds are intended to provide financial support for the nation’s cybersecurity initiatives, which are crucial in safeguarding Nigeria’s digital space.
The implementation of this levy has been met with mixed reactions. On one hand, it represents a proactive step towards addressing the growing concerns of cyber threats and the need for robust cybersecurity measures. On the other hand, it adds to the list of existing charges that customers have been paying over the years, raising concerns about the additional financial burden on consumers and businesses alike.
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One of the key documents that provide a basis for the application of charges on various products and services offered by financial institutions is the “Guide to Charges by Banks, Other Financial and Non-Bank Financial Institutions” which took effect from January 1, 2020. This guide aims to enhance flexibility, transparency, and competition within the Nigerian banking industry.
The guide covers a wide range of charges, including but not limited to:
Interest on deposits.
Interest rates and lending fees.
Current account maintenance fees.
Commission on bonds, guarantees, and indemnities.
Foreign exchange commission/charges.
Electronic banking charges.
For instance, customers are charged an electronic money transfer levy for deposits of 10,000 naira or more. There are also fees for electronic funds transfers, SMS alerts, quick balance enquiry, card maintenance, and ATM withdrawals.
It’s important for customers to note that some charges are negotiable, and they have the right to discuss these with their financial institutions. The CBN requires that any new product, service, or charge not covered by the guide must be presented to it for prior written approval.
The CBN’s effort to review and reduce most charges and fees for banking services reflects its commitment to making banking more affordable for Nigerians. Customers are encouraged to stay informed about the charges they incur and to engage their banks if they have any concerns or need clarifications.
The introduction of the cybersecurity levy comes at a time when Nigeria is grappling with economic challenges, including the removal of fuel subsidies and the resultant inflation. The decision to implement this levy reflects the government’s prioritization of cybersecurity, recognizing the critical role it plays in the stability and integrity of the nation’s financial systems.
As the country navigates through these changes, it will be important to monitor the impact of the cybersecurity levy on electronic transaction habits, customer experience, and the overall effectiveness of the cybersecurity measures funded by this initiative. The balance between securing the digital economy and ensuring affordability for users will be a key factor in the success of this policy.