The Central Bank of Nigeria (CBN) has officially withdrawn its recent circular mandating a cybersecurity levy, following a suspension directive from the Federal Government (FG). This move comes amid heightened scrutiny and feedback from industry stakeholders regarding the levy’s implications on the banking sector.
The circular, initially introduced by the CBN, aimed to bolster cybersecurity measures within the financial industry by imposing a levy of 0.5% cybersecurity levy on electronics transaction on. However, the Federal Government’s intervention led to its immediate suspension, prompting the CBN to retract the directive.
This decision came after significant public backlash and the Federal Government’s suspension of the levy last week. In its latest circular, dated May 17, 2024, the CBN referred to its previous circular from May 6, 2024, advising financial institutions that the directive on implementing the cyber-security levy “is hereby withdrawn.”
The latest CBN circular was co-signed by Chibuzo Efobi, Director of the Payments System Management Department, and Haruna Mustafa, Director of the Financial Policy and Regulation Department.
The initial circular, dated May 6, 2024, had instructed all deposit money banks, mobile money operators, and payment service providers to deduct the levy and remit it to the National Cybersecurity Fund (NCF), managed by the Office of the National Security Adviser (ONSA).
The announcement of the levy sparked widespread outrage, with labor unions threatening actions and pressure groups criticizing the timing of the levy amidst a cost-of-living crisis exacerbated by rising inflation. This led to the Federal Government’s suspension of the cyber-security levy on May 14, 2024.
The CBN’s swift compliance with the FG’s directive underscores the dynamic relationship between regulatory bodies and the importance of collaborative efforts in policy implementation. The ongoing discourse is expected to shape a more balanced approach to strengthening cyber-security within Nigeria’s financial system.
