The introduction of the cybersecurity levy by the Central Bank of Nigeria (CBN) has sparked considerable controversy and opposition from various quarters. On May 6, the CBN announced the implementation of a 0.5 per cent levy on all electronic transactions, citing the recently passed 2024 Cybercrime (Prohibition, Prevention, etc.) Amendment Act as the basis for this directive. However, the House of Representatives, the Northern Elders Forum, and segments of the Organised Private Sector have vehemently opposed this move, arguing that it would exacerbate economic hardships and financial burdens on Nigerians.
Nigerian groups, like the House of Representatives and the Northern Elders Forum, demand suspension and reversal of the cybersecurity levy. They claim the levy would further burden Nigerians amidst economic challenges like inflation and subsidy removal. Furthermore, there are concerns that the wording of the CBN circular leaves room for interpretation, potentially resulting in confusion regarding who is responsible for paying the levy.
The Northern Elders Forum criticized the cybersecurity levy, citing rising banking costs, urging government reconsideration. Likewise, the Lagos Chamber of Commerce and the Centre for the Promotion of Private Enterprise voiced concerns about timing. They stressed prioritizing policies to ease, not worsen, financial challenges amid economic uncertainties and rising tariffs.
Economists and business leaders have also raised alarms about the potential negative impact of the cybersecurity levy on the economy. Imposing extra charges on digital transactions may discourage usage, hampering growth and hindering financial inclusion goals. Furthermore, there are concerns that the levy’s implementation contradicts earlier assurances by the Presidential Committee on Fiscal Policy and Tax Reforms to streamline taxes and levies for a better business environment.
The Nigerian Economic Summit Group (NESG) suggested focusing the cybersecurity levy on high-net-worth individuals to reduce burden. This proposal aims to alleviate financial strain and prevent reduced revenue while encouraging digital payment usage. The NESG cautioned against widespread levy imposition, fearing reduced government revenue and discouraged digital payment adoption. As of now, the Central Bank of Nigeria (CBN) has not addressed the concerns, sparking speculation on its motives. Nigerians are left questioning the levy’s implications on the economy and everyday transactions due to CBN’s silence.
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