Nigeria’s central bank has reversed its decision to implement a contentious 0.5% cybersecurity levy on electronic transfers just three days prior to its scheduled enforcement. The revision comes following an amendment to the Cybersecurity Act in 2024, which expanded the levy’s coverage to include fintechs, payment service providers, and other financial institutions, marking a substantial surge from 0.005%.
The circular that introduced the levy mentioned above is now rescinded,” stated the circular signed by Chibuzo Efobi, director of the central bank’s payment system management team, and Haruna Mustafa, director of financial policy and regulation.
Financial industry experts labeled the cybersecurity levy as “regressive” due to its significant hike in electronic transaction costs, coinciding with Nigeria’s highest inflation rate in thirty years and a severe cost of living crisis. Under mounting pressure from labor unions, the federal government halted the levy and announced plans for a review on Tuesday.
The now-rescinded cybersecurity levy would have imposed a fee of ₦5 for a ₦1,000 electronic transfer and ₦500 for a ₦100,000 transfer.
In addition to the levy, electronic transactions would also incur charges for stamp duty, SMS, and the national payment switch, resulting in a total fee of ₦130.875 for a ₦10,000 transaction. However, exceptions existed, such as transfers within the same bank, salary payments, school fees, and loan repayments.
Its elimination will be a relief for Nigerians who increasingly rely on electronic transfers for payments. Paystack, a prominent Nigerian fintech firm, disclosed that bank transfers accounted for more than half of its transactions in 2023. During the same period, Nigeria witnessed a 66% surge in the value of electronic transactions, exceeding ₦600 trillion.
