Central Bank of Nigeria Withdraws Cybersecurity Levy, Issues Directive to Banks

The Central Bank of Nigeria (CBN) has rescinded its directive for banks and other financial institutions to charge a cybersecurity levy on electronic transfers.

This decision came after the House of Representatives last Thursday requested that the CBN retract its circular mandating all banks to impose a 0.5 percent cybersecurity levy on all electronic transactions in the country.

Recall that on May 6, 2024, the CBN had issued a circular requiring all banks, mobile money operators, and payment service providers to implement the new cybersecurity levy, in line with the provisions of the Cybercrime (Prohibition, Prevention, etc) (Amendment) Act 2024.

According to the Act, the levy was to be collected and remitted to the National Cybersecurity Fund, managed by the Office of the National Security Adviser. Financial institutions were instructed to apply the levy at the point of origination of electronic transfers.

The deducted amount was to be explicitly recorded in customer accounts under the descriptor “Cybersecurity Levy” and remitted by the financial institution. All financial institutions were expected to start implementing the levy within two weeks from the issuance of the circular.

This meant that the deduction of the levy by financial institutions was set to commence on May 20, 2024. However, CBN halted the move to charge the cybersecurity levy in a circular titled ‘Re: Cybercrimes (Prohibition, Prevention, ETC) (Amendment) Act 2024 — Implementation Guidance on the Collection and Remittance of the National Cybersecurity Levy,’ and dated May 17.

The circular made public on May 19 was signed by Chibuzo Efobi, director, payments system management department, and Haruna Mustafa, director, financial policy and regulation department.

“The Central Bank of Nigeria circular dated May 6, 2024 (Ref:PSMD/DIR/PUB/LAB/017/004) on the above subject refers,” CBN said.

“Further to this, please be advised that the above referenced circular is hereby withdrawn. Please be guided accordingly.”

President Tinubu has therefore directed the apex bank to suspend the implementation and review the modalities for its implementation.