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Nigerian government faces backlash over proposed cybersecurity levy

House of Representatives, Northern Elders Forum, and private sector express concern, urging CBN to suspend controversial levy.

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The introduction of a cybersecurity levy on electronic transactions by the Central Bank of Nigeria (CBN) has sparked outrage among Nigerian lawmakers, prominent groups, and members of the Organised Private Sector (OPS). The levy, proposed to be imposed on online banking transactions, has drawn criticism for its potential to exacerbate economic hardship in the country and its perceived insensitivity to prevailing economic challenges.

On Thursday, the House of Representatives, the Northern Elders Forum (NEF), and representatives from the private sector called for the suspension and complete reversal of the policy, denouncing it as arbitrary and out of touch with the realities faced by Nigerians. They raised concerns about the ambiguity of the CBN circular, which mandates financial institutions to implement the levy, potentially shifting the burden onto bank customers.

The controversy stems from a CBN circular issued on May 6, 2024, requiring financial institutions to introduce the cybersecurity levy, amounting to 0.5 per cent of all electronic transaction values. The levy, according to the CBN, is in compliance with the recently passed Cybercrime (Prohibition, Prevention, etc.) Amendment Act and aims to bolster the nation’s cybersecurity initiatives overseen by the Office of the National Security Adviser.

However, the House of Representatives, through a motion of urgent public importance moved by the House Minority Leader, Kingsley Chinda, challenged the CBN’s directive, arguing that it contravened the provisions of the Cybercrimes Act. Lawmakers urged the CBN to withdraw the circular and issue a clear directive in line with the Cybercrimes Act, 2024.

Echoing similar sentiments, the NEF condemned the levy, citing its imposition amidst escalating costs associated with banking transactions. The forum expressed dissatisfaction with the policy, emphasizing its adverse impact on individuals and businesses already grappling with economic hardships.

Private sector advocacy groups, including the Lagos Chamber of Commerce and the Centre for the Promotion of Private Enterprise, joined the chorus of disapproval, describing the levy as ill-timed and burdensome. They cautioned against its implementation, warning of potential adverse effects on economic activities and investment.

The Nigerian Economic Summit Group (NESG) urged the government to reconsider the levy, suggesting a more targeted approach that minimizes its impact on the populace. The NESG warned that the levy could lead to a boycott of digital payments, reducing revenue for the government and impeding financial inclusion efforts.

Amidst mounting criticism, the CBN has remained silent on the matter, prompting speculation and public debate on social media platforms. Nigerians have expressed concerns over the proposed levy, questioning its rationale and timing in the face of prevailing economic challenges.

As stakeholders await further clarification from the CBN, the controversy surrounding the cybersecurity levy underscores the need for transparent and consultative policymaking processes that consider the interests of all stakeholders in Nigeria’s socio-economic landscape.

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