•It’s daylight robbery –Depositors …Burden too much for Nigerians –NLC
By Merit Ibe, Chinenye Anuforo, Chinwendu Obienyi and Chukwuma Umeorah
The introduction of the 0.5 per cent cybersecurity levy and reintroduction of processing fees by the Central Bank of Nigeria (CBN) has sparked mixed reactions, with depositors saying the development was scathing, just as experts have weighed in on the implications.
The cybersecurity levy on electronic transfers commences in two weeks. According to the CBN, this is part of efforts to contain the rising threats of cyber crime in the financial system.
The apex bank explained that the deducted funds are to be remitted to the National Cybersecurity Fund (NCF), which shall be administered by the Office of the National Security Adviser (ONSA).
The apex bank further reintroduced fees for deposits exceeding N500,000 for individuals and corporate account holders after suspending the processing fees on cash deposits above N500,000 until April 30, 2024.
Reacting to the developments, customers and economic experts who spoke to Daily Sun, questioned the timing of the directive while adding that the levy is uncalled for. Chijindu Happiness, a bank customer while expressing her frustration, said, “In other nations, the NSA is a revered agency but here in Nigeria, it just looks like it is just there for decoration. What is their role again? How effective is the Nigeria Computer Emergency Response Team? It is simple, this is their main role and so I ask how is it the citizens’ problem to curb cybercrime through this supposed levy? Very soon, we will be tasked to fund the national budget”.
An ICT expert, Chief Ajiji, via his X handle, said, “For every N1,000 interbank transfer, cyber security will collect N5, telecoms will collect N4 for SMS, NIBSS will collect N10, COT will collect N1 and then stamp duty at N5 will be charged by FG, making it a total cost of N25 (2.5 per cent processing fee for every N1,000). This is insensitive and should be reversed immediately. Whatever happened to the recovered loots? Why can’t the recovered loots be used to run this? This is totally strangulating and a daylight robbery on the masses.
For his part, Professor of Finance and Capital Market, Uche Uwaleke, said the levy is ill-timed and carries the downside risk of discouraging financial inclusion, adding that the circular be withdraw forthwith.
“I think the cybersecurity levy is ill-timed, coming at a time when the CBN is concerned about the high rate of financial exclusion and the increasing rate of currency circulating outside the banks.
It carries the downside risk of discouraging financial intermediation as well as complicating the transmission of monetary policy with more people shunning the banks due to high charges. The end result is that it makes difficult effort by the CBN to tame inflation”, Uwaleke said.
Also speaking, the Centre for the Promotion of Public Enterprises (CPPE), Dr Muda Yusuf, said the new cybersecurity level will diminish the capacity of investors to drive economic growth and fuel inflation.
He noted that businesses were yet to recover from the current reforms, just as inflationary pressures are yet to abate.
Also, the Nigeria Labour Congress (NLC) also condemned the 0.5 percent Cybersecurity levy on electronic transfers.
NLC National President, Joe Ajaero, in a statement on Tuesday, expressed strong opposition to the levy, labelling it as yet another hardship on the Nigerian populace who were already grappling with economic challenges.
Ajaero called on the Federal Government to reconsider these directives and prioritize policies that alleviate the financial burdens of Nigerians. They urged a collaborative approach between the government, regulatory bodies, and stakeholders to develop sustainable cybersecurity measures that do not unduly burden the populace.
He said that “The Nigeria Labour Congress recognizes the importance of cybersecurity in today’s digital age. However, imposing such a levy on electronic transactions, without due consideration for its implications on workers and the vulnerable segments of society, is unjustifiable.”
He added that Monies raised in the past have not helped in making lives better for the citizenry neither have they been seen in better infrastructural provisions.
The directive, outlined in a circular from the CBN, mandates banks and payment service operators to effect deductions at the transaction origination, with implementation set to commence within the next two weeks. While the CBN has exempted interbank transfers and loans transactions from this levy, the broader impact on everyday transactions cannot be overlooked.
The NLC alleged that “The levy is another plot by the ruling elite to continue its extortion and exploitation of hapless and helpless workers and the masses so that their cronies in various financial centres can continue wallowing in unbridled consumption.
“Moreover, the threat of fines for non-compliance, amounting to not less than two per cent of an institution’s annual turnover, adds further pressure on financial institutions. This, in turn, could lead to increased costs for consumers, exacerbating the already challenging economic environment in Nigeria,” Ajaero stated.