Business & Strategy

Central Bank of Nigeria Orders Banks to Impose 0.5% Cybersecurity Levy

Written by Jerry Alomatu on May 7, 2024

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In a circular dated May 6, 2024, the Central Bank of Nigeria (CBN) has instructed deposit money banks across the nation to implement a 0.5% cybersecurity levy on transactions.

The directive, addressed to all commercial, merchant, non-interest, and payment service banks, as well as mobile money operators and payment service providers, stems from the enactment of the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024.

Quoting Section 44 (2) (a) of the Act, the circular stated, “a levy of 0.5% (0.005) equivalent to a half percent of all electronic transactions value by the business specified in the Second Schedule of the Act”, is to be remitted to the National Cybersecurity Fund (NCF), under the administration of the Office of the National Security Adviser (ONSA).

The CBN specified that the levy’s implementation would commence two weeks from the circular’s issuance. It outlined that the levy would be applied at the point of electronic transfer origination, deducted by the financial institution, and reflected in the customer’s account with the narration, ‘Cybersecurity Levy’.

Furthermore, the circular stated that deductions would start within two weeks, with monthly remittances of the levies collected in bulk to the NCF account domiciled at the CBN by the fifth business day of each subsequent month.

Transactions exempted from the levy include loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, among others.

This directive follows recent regulatory actions by the CBN, including the suspension of fintech firms like Opay and Palmpay from onboarding new customers and the mandate for banks to deduct 0.375% stamp duty charge on all mortgaged-backed loans and bonds.