NESG Faults CBN Cybersecurity Levy, Says Poor Timing Will Hurt Economy

The Nigerian Economic Summit Group (NESG) has faulted the Central Bank of Nigeria's (CBN) recent cybersecurity levy, saying it is poorly timed and will hurt the economy.

The Chief Executive Officer, NESG, Dr Tayo Adulojue, said this in a statement on Thursday in Lagos.

He said that the levy came amid rising inflation and living costs, which would further strain Nigerians.

"Amidst the cost of living crisis exacerbated by rising inflation, the cybersecurity levy is mistimed, considering CBN's concern about the high rate of financial exclusion and increased currency in circulation.

"The NESG posits that the levy should be targeted at high-net-worth individuals and a specific amount transferred electronically to allay the fears of the populace, who are still battling skyrocketing food and non-food prices.

"However, if this policy remains, several Nigerians will boycott electronic funds transfers, which does not even bode well for the government due to revenue loss from electronic transfer levy.

"The NESG, however, feels this is a critical time to implement such a policy," he said.

Adulojue argued that the impacts of the fuel subsidy removal, exchange rate reform, and, most recently, the removal of electricity subsidies still permeate the operating costs of businesses and citizens’ welfare.

He urged the government to be cautious of the numerous strenuous policies that stiffen the purchasing power and welfare of corporations and individuals.

He advised the government to properly sequence reforms for efficient socioeconomic outcomes, especially those that strain the people.

He noted that the policy was coming when the Presidential Committee on Fiscal Policy and Tax Reforms was yet to finalise its mandate.

Adulojue said, " one of the terms of reference of the Committee is that the number of taxes should be streamlined.

"Introducing a cybersecurity levy could thwart this essential mandate.

"To avoid conflict of interests and ensure no policy misalignment, the NESG strongly believes that the levy should be deferred and proper consultation until the Fiscal Policy Committee deems it necessary to implement it."

The ceo emphasised that the NESG acknowledged the exemptions highlighted by the CBN, saying however, the CBN needs to be proactive in monitoring banks' implementation to curb citizen exploitation.


He anticipated that there would still be overlapping transactions even with the exemption provided,

He said therefore that it is imperative for the monetary authority to develop an effective and practical framework to limit the levy to liable transactions.

He said, " It is noteworthy that the policy is intended to fight cybercrimes and raise revenue for the government.

"However, higher revenue should be achieved without imposing severe burden on poor and vulnerable Nigerians.

"Meanwhile, the policy could also create loopholes for cybercriminals to devise alternative routes to perpetrate the heinous acts.

"To narrow the alternative ways of committing cybercrimes, the NESG posits an integrated approach in the fight against cybercrimes involving the collaborative efforts of financial institutions, security agents, the EFCC and other key stakeholders.

Hence, he said that the introduction of a cybersecurity levy penalises the populace for the failure of the system to uproot the sources of cybercrimes.

Adulojue called for the cybersecurity levy to be reconsidered, considering the CBN's concern about the high rate of financial exclusion and increased currency in circulation.


He stressed the groups concern about the implementation of this policy at this critical time, adding that it will decelerate the pace of achieving the 95 percent financial inclusion target of 2025.


He said that the mere news of charges on bank transactions would demotivate many Nigerians from accessing financial services, potentially propelling a surge in the demand for cash.


He noted, "The cybersecurity levy adds to the list of levies and taxes collected by financial institutions on behalf of the government, including stamp duty, electronic transfer levy, and VAT.

"This embodiment of taxes increases the transaction costs of using a bank and could disrupt the financial intermediation role of banks.

"Furthermore, given the current strains that citizen face, perceived unfairness, lack of transparency and accountability would heighten distrust in the financial system.


"The NESG, therefore, suggests the need to reduce banks' transaction costs, signal clarity to improve trust in the financial system and to entice people to become financially included.

"For instance, the high transfer costs charged by the official channel (banks) have prompted many Nigerian migrants to route remittances via informal channels.