CBN Mandates 0.5% Cybersecurity Levy on Electronic Transactions

The Central Bank of Nigeria (CBN) has instructed deposit money banks across the nation to implement a 0.5% cybersecurity levy on certain transactions conducted by their clientele.

Issued through a circular dated May 6, 2024, and distributed to all commercial, merchant, non-interest, and payment service banks, as well as mobile money operators and payment service providers, the directive cites the Cybercrime (Prohibition, Prevention, etc) (Amendment) Act 2024.

The circular stipulates, “Following the enactment of the Cybercrime (Prohibition, Prevention, etc) (Amendment) Act 2024 and pursuant to the provision of Section 44 (2) (a) of the Act, 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), which shall be administered by the Office of the National Security Adviser (ONSA).”

Implementation of the levy is set to commence two weeks from the circular’s issuance date. The levy will be applied at the point of electronic transfer origination, deducted by the financial institution, and remitted to the NCF account domiciled at the CBN monthly.

The circular clarifies exemptions from the levy, including loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, inter-branch transfers within a bank, cheque clearing and settlements, Letters of Credits, banks’ recapitalization-related funding, and certain transactions involving long-term investments.

This directive aims to bolster cybersecurity measures in Nigeria while exempting transactions vital to financial operations and customer services.