Nigeria’s central bank has withdrawn a controversial 0.5% cybersecurity levy on electronic transfers three days before it was supposed to take effect. The Cybersecurity Act was amended in 2024 and the scope of the levy was extended to cover fintechs, payment service providers and other financial institutions and introduced a 900% increase from 0.005%.
“Please be advised that the above referenced circular [the circular that implemented the levy] is hereby withdrawn,” the circular signed by Chibuzo Efobi, the director of the central bank’s payment system management team, and Haruna Mustafa, the director of financial policy and regulation, read.
The cybersecurity levy was seen as “regressive” by financial industry experts due to the sharp increase in the cost of an electronic transaction amidst the country’s highest inflation rate in thirty years and a cost of living crisis. Following mounting pressure from labour unions, the federal government suspended the levy and said it would be reviewed on Tuesday.
The now-revoked cybersecurity levy meant an electronic transfer of ₦1,000 would attract a ₦5 fee, while a ₦100,000 transfer would attract a ₦500 fee. “Since I heard of the levy, I have only transferred money to bank accounts in my bank,” *Ope, an online phone seller who deals with a lot of money daily, told TechCabal.
The levy would have been charged in addition to a stamp duty charge, an SMS charge, and a charge from the national payment switch. A ₦10,000 electronic transaction fee would have cost ₦130.875. But loopholes existed, like an exception with money transfers within the same bank, salary payments, school fees payments, and loan repayments.
Its removal would be welcomed by Nigerians like Ope who have come to increasingly rely on electronic transfers as a primary means of payment. Paystack, a Nigerian fintech giant, revealed last week that bank transfers accounted for over half of the transactions it processed in 2023. In that same year, the value of electronic transactions in Nigeria rose by 66% to over ₦600 trillion.
*This is a developing story
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