Market News

Boluwatife Omotayo 

The Central Bank of Nigeria has reduced the cybersecurity levy on electronic transactions from 0.5 per cent to 0.005 per cent according to its new fiscal guidelines for 2024-2025.

“The CBN shall continue to enforce the payment of the mandatory levy of 0.005 per cent on all electronic transactions by banks and other financial institutions, by the Cybercrime (Prohibition, Prevention, etc.) Act, 2015,” it read.

This reduction came as a result of the backlash that followed the introduction of the levy earlier in the year, which was met with opposition from the Nigeria Labour Congress, Trade Union Congress, and bank customers.

Enhancing Financial Innovation and Access (EFInA), noted, at the time that implementing a 0.5 percent cybersecurity levy on financial transactions would negatively impact financial inclusion.

“While the Cybercrimes Levy by the Federal Government is an effort to fund the strengthening of consumer protection in a fast-growing digital economy, the indirect impact of transferred costs to consumers that are already price-sensitive elevates the risk of further exclusion from formality,” EFInA said.

The levy, introduced under the Cybercrime (Prohibition, Prevention, etc.) Act 2015 amended in 2024, is set to support the National Cybersecurity Fund, administered by the Office of the National Security Adviser.

The 0.005 per cent fee will be charged on all electronic transactions conducted by commercial, merchant, non-interest, and payment service banks, among others.

In a directive issued by the CBN on Wednesday, certain transactions will be exempt from the levy, including wage payments, loan disbursements and repayments, and transfers between the same bank accounts or banks for the same client.

The exclusion also covers intra-bank transfers, clearing and settlement of cheques, Letters of Credit, and transactions between banks and the CBN.

In May, President Bola Tinubu ordered a suspension and review of the levy due to widespread protests, and the House of Representatives also demanded its immediate withdrawal. Despite these protests, the CBN announced it would continue with the levy under the revised rate as part of its monetary and exchange policy for the next fiscal years.