Unraveling the Controversy: CBN’s Cybersecurity Levy

The recent directive by the Central Bank of Nigeria (CBN) to impose a 0.005 cybersecurity levy on electronic transactions has ignited a fierce debate across the nation. Advocates argue that it’s a crucial step towards combating the escalating threat of cybercrime, while skeptics raise concerns regarding the timing and transparency of the initiative.

One of the primary points of contention revolves around the origin and scope of the proposed levy. Contrary to popular belief, neither President Bola Tinubu nor CBN Governor Olayemi Cardoso initiated the levy. Instead, it stems from the Cybercrimes Act of 2015, enacted by the National Assembly. This legislation aimed to curb the rising tide of cybercrimes within the country.

Despite the noble intentions behind the levy, apprehensions loom large regarding its implementation and accountability. Many fear that the substantial funds generated from these transactions, projected to amount to billions of naira annually, might not be utilized effectively. There’s a prevailing concern that the funds could potentially end up lining the pockets of a select few rather than being invested in bolstering cybersecurity measures.

Navigating the Road Ahead: Challenges and Opportunities

While the inception of the cybersecurity levy dates back to 2015, previous attempts to enforce it, notably in 2018 under former CBN Governor Godwin Emefiele, encountered significant backlash. Critics argued that such measures could further strain an already fragile economy. However, with the escalating global threat posed by cybercrimes, there’s a pressing need to fortify Nigeria’s defenses in the digital realm.

The absence of robust cybersecurity infrastructure remains a glaring concern, especially in light of alarming statistics highlighting the financial toll exacted by cybercrimes. According to Proshare, Nigeria incurred losses amounting to N250 billion in 2017 and N288 billion in 2018 due to cybercrimes. Moreover, projections by the Cyber Security Experts Association of Nigeria (CSEAN) indicate a worrisome escalation in cyber threats in the year 2024.

As Nigeria stands at a critical juncture in its battle against cybercrimes, the successful implementation of the cybersecurity levy hinges on addressing prevailing concerns regarding transparency, accountability, and economic impact. It is imperative for stakeholders to collaborate closely to ensure that the levy serves its intended purpose of fortifying the nation’s cybersecurity framework and safeguarding its digital landscape against emerging threats.

Nigerian Financial Experts Critique the CBN Cybersecurity Levy

The recent announcement of the Central Bank of Nigeria (CBN) regarding the implementation of a cybersecurity levy has sparked mixed reactions across the country. Notable figures within the academic and financial sectors have expressed varying opinions on the matter, shedding light on both the potential benefits and drawbacks of the policy.

Finance and capital market expert, Professor Uche Uwaleke, has raised concerns about the timing of the cybersecurity levy. He argues that introducing such a levy amidst the CBN’s efforts to address financial exclusion and curb the circulation of currency outside of banks may not be the most prudent decision. Uwaleke suggests that the focus should instead be on strategies to stimulate economic growth, thereby generating revenue through corporate taxes, similar to approaches adopted by other economies.

Echoing similar sentiments, Professor Ndubuisi Ekekwe of the Tekedia Institute emphasizes the need for prioritizing economic growth over additional levies. He points to examples such as the United States, which waived online sales taxes to foster economic development. Ekekwe advocates for a holistic approach to revenue generation, rather than relying solely on auxiliary fees like the cybersecurity levy.

Diverse Perspectives on the CBN Cybersecurity Levy Implementation

In contrast, Emmanuel Odunyemi, a cybersecurity expert, offers a differing perspective on the matter. He believes that the cybersecurity levy is a positive step towards enhancing national cybersecurity infrastructure. Odunyemi highlights the importance of establishing a National Cybersecurity Fund to support initiatives aimed at safeguarding digital assets and combating cyber threats. Despite acknowledging the need for further review of the 2024 Cybersecurity Act, Odunyemi remains optimistic about the potential benefits of the levy.

Meanwhile, the Socio-Economic Rights and Accountability Project (SERAP) has taken a proactive stance in response to the CBN directive. In a letter addressed to the President Tinubu-led government, SERAP has raised objections to what they deem as repressive provisions within the Cybercrimes Act. They have issued a 48-hour ultimatum for the withdrawal of the CBN directive and the amendment of the contentious provisions. SERAP warns of potential legal action should their demands not be met, citing public interest as their primary motivation.