THE federal government’s decision to suspend the cyber security levy deduction from Nigerians is not just the right thing to do but a sensible decision given the economic realities in the country. On May 6, the Central Bank of Nigeria directed all commercial, merchant, non-interest, and payment service banks, mobile money operators, and payment service providers to charge a 0.5 per cent cybersecurity levy on electronic transfers. The circular was a continuation of earlier communications, specifically a letter dated June 25, 2018 (Ref: BPS/DIR/GEN/CIR/05/008), and another on October 5, 2018 (Ref: BSD/DIR/GEN/LAB/11/023), regarding compliance with the Cybercrimes (Prohibition, Prevention, etc.) Act 2015.

ACCORDING to the apex bank, the deduction and collection of the cybersecurity levy followed the enactment of the Cybercrime (Prohibition, Prevention, etc.) Amendment Act of 2024. The CBN said the charges would be remitted to the National Cyber Security Fund and administered by the Office of the National Security Adviser (ONSA). The deduction was to commence on May 20. Transactions exempted from the level were loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, and intra-bank transfers between customers of the same bank. Other financial institutions’ instructions to their correspondent banks, interbank placements, banks’ transfers to CBN, and vice-versa, will also remain unaffected by the new charge.

HOWEVER, due to pressure from Nigerians and some stakeholders, the federal government announced the suspension of the deduction. As the Minister of Information and National Orientation, Mohammed Idris, stated, the deduction has been put on hold and is being reviewed. This implies that the cyber levy deduction is not cancelled but put on hold and might be reactivated at any time. It is important to note that Nigerians pay several charges for transacting with commercial banks, a key reason for some Nigerians to seek solace in online wallets such as O’pay, Palmpay, Moniepoint and Kuda.

IN December 2019, the CBN updated its Guide to Charges by Banks, Other Financial, and Non-bank Financial Institutions, effective January 1, 2020. The electronic transfer charges were revised from a flat N50 to N50 for transactions above N50,000, N25 for transactions between N5,000 and N50,000, and N10 for transactions below N5,000. The charge for ATM withdrawals from other banks’ ATMs was reduced from N65 to N35 for the third withdrawal within the same month. For mandatory SMS alerts, customers are now charged based on cost recovery instead of the previous maximum charge of N4. In 2021, USSD payment channel users were mandated to pay a flat fee of N6.98 per transaction, replacing the former N4.89 session billing. For bill payments via e-channels, the maximum charge was reduced to N500 from 0.75 per cent of the transaction value, previously capped at N1,200. Additionally, value-added tax (VAT) charges are N0.75 on an N10 transfer fee, N1.875 on a N25 transfer fee, and N3.75 on an N50 transfer fee. The CBN warned that any financial institution breaching the guide’s provisions would face a penalty of N2 million per infraction or as determined by the CBN.

THESE data indicate that Nigerians pay significant amounts for using banks due to multiple charges. Nigerians already shoulder several burdens, and adding the cybersecurity levy would further diminish their purchasing power. With high and increasing inflation in the country, the prices of commodities, electricity, cable TV subscriptions, and other charges have also increased recently. Adding more burdens on the people contradicts the “Renewed Hope” mantra of President Bola Ahmed Tinubu.

MOREOVER, customers should not have to pay a cybersecurity levy for transacting with GSM service providers, telecommunication companies, Internet Service Providers, banks, and other financial institutions, insurance companies, and the Nigerian Stock Exchange. These service providers are supposed to ensure the safety of customers’ information, property, deposits, or transactions. Implementation of policies should not be done using a fire brigade approach; policies should be implemented with due consideration of the economic indices and social welfare of the people.

WHILE we commend the government for suspending the implementation of the cybersecurity levy deduction, we urge the government to consider the situation in the country before implementing borrowed policies. Democracy is a government of the people, by the people, and for the people; ours should not be to stifle the people and deny them the dividends they should enjoy.