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Tinubu orders review of controversial cybersecurity levy amid public backlash

President Bola Tinubu responds to public outcry, urging Central Bank of Nigeria to suspend implementation and reconsider cybersecurity levy policy.

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In a significant turn of events, President Bola Tinubu has intervened in the brewing controversy surrounding the implementation of the cybersecurity levy in Nigeria. His directive comes on the heels of mounting pressure from various quarters, including the House of Representatives, to reconsider the contentious policy.

The decision, made public following a tumultuous week of debates and public outcry, underscores the escalating tensions surrounding the cybersecurity levy. The levy, announced by the Central Bank of Nigeria (CBN) through a circular issued on May 6, 2024, mandates financial institutions to impose a 0.5 per cent charge on all electronic transactions.

According to provisions outlined in the Cybercrime (Prohibition, Prevention, etc) (Amendment) Act 2024, the levy aims to bolster cybersecurity measures by channeling funds to the National Cybersecurity Fund under the oversight of the Office of the National Security Adviser.

President Tinubu’s intervention follows the House of Representatives’ call for the CBN to withdraw its circular, highlighting concerns over the potential adverse effects on businesses and the digital economy. The circular, which set a deadline for implementation starting May 20, 2024, faced criticism for its perceived haste and lack of stakeholder consultation.

Key aspects of the levy, including its scope and exemptions, have been subject to scrutiny and debate. Financial institutions were required to deduct the levy at the point of electronic transfer origination and remit the collected amount to the designated fund. However, concerns were raised regarding the impact on transaction costs and the burden on businesses, particularly in light of ongoing economic challenges.

The CBN’s stringent enforcement measures, including penalties for non-compliance, further intensified apprehensions among stakeholders. Non-compliant entities risk facing fines amounting to two per cent of their annual turnover, as stipulated in the Act.

While the levy seeks to enhance cybersecurity infrastructure, critics argue that its implementation could hinder the growth of digital transactions and exacerbate existing economic pressures. Exemptions listed in the circular aim to mitigate some of these concerns, including provisions for loan disbursements, salary payments, and transactions involving educational institutions and non-profit organizations.

The public reaction to the cybersecurity levy reflects broader apprehensions about Nigeria’s digital economy and regulatory environment. As the country strives to navigate the complexities of technological advancement and cybersecurity threats, the need for inclusive and transparent policymaking becomes increasingly paramount.

President Tinubu’s directive to suspend the implementation of the cybersecurity levy signals a pivotal moment in the ongoing discourse surrounding digital governance and economic resilience. With calls for greater stakeholder engagement and policy review, the path forward hinges on collaborative efforts to strike a balance between cybersecurity imperatives and economic sustainability.

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