There is a burst of literal fire and anger in the air. Many Nigerians are livid at the moment. Institutions are not left out. The organised labour, civil society organizations, professional bodies, commercial ventures, among others, have all taken umbrage at a circular from the Central Bank of Nigeria (CBN) to banks.
The apex bank’s offending circular was sent on Monday to all commercial, merchant, non-interest and payment service banks, among others, directing them to start deducting a half per cent cybersecurity levy from all electronic transactions. The directive, which is supposed to begin within two weeks from the date of the circular, was, according to the CBN, sequel to the enactment of the Cybercrime (Prohibition, Prevention, etc) Amendment Act 2024.
The apex bank said Section 44(2)(a) of the Act mandates the levy, while the total money accruing from the deductions is to be remitted every month to the National Cybersecurity Fund (NCF), which will be administered by the Office of National Security Adviser(NSA). “The levy shall be applied at the point of electronic transfer origination, then deducted and remitted by the financial institution. The deducted amount shall be reflected in the customer’s account with the narration, ‘Cybersecurity levy,’” the CBN circular directed.
Certain transactions are, however, exempted from the levy. They include loan disbursements and repayments, salary payments, intra-account transfers between customers of the same bank, inter-bank transfers within a bank, cheque clearing and settlements, among others.
There were momentary, tetchy outbursts of angst among the populace to the apex bank’s circular, an imposition considered as one too many. Truly, it smacks of an execrable insensitivity to even broach any idea of adding any further burden, however small, to Nigerians who are already literally sagging under the weight of the unkindest inflationary morass in 28 years.
It is, indeed, imprudent to impose any levy in whatever guise now, at a time an average Nigerian is still struggling to make sense out of a maze of misery brought upon him or her by the sudden removal of fuel subsidy and the concomitant, steep rise in the costs of living; the forex somersault; the electricity tariff hike and the strains of a debilitating fuel scarcity!
The public outrage is thus understandably massive. The Nigerian Labour Congress (NLC) described the levy as another anti-people policy of the government imposed amid economic hardship. A statement issued by the NLC President, Joe Ajaero, said, inter alia: “This levy, to be implemented by deduction at the transaction origination, is yet another burden on the shoulders of hardworking Nigerians. This move, ostensibly aimed at bolstering cybersecurity measures, threatens to exacerbate the financial strain already faced by the people.”
His Trade Union Congress (TUC) counterpart, Festus Osifo, described the levy as an extortion. He said it is illogical, coming at a time Nigerians are grappling with high cost of living that is imposed by the devaluation of the naira, hyper hike in the cost of petrol, supersonic increment of electricity tariff, etc.
Osifo lamented that an average bank account holder “is already charged staff duty, transfer fee, VAT on transfer fee and all forms of maintenance levies by both government and the banks.” He added: “This burden seems not to be enough as government is poised to inflict further pain on the already battered Nigerians.”
The President of Bank Customers Association of Nigeria, Dr Uju Ogubunko, said the cybersecurity levy could negatively affect the cashless and financial inclusion drive of the CBN, adding that there is no justification for it. “What about those who do not have accounts in the bank, for example?,” Dr Ogubunko posed, “So, how do you get their portions? For me as an individual, I think it is unfair and that the government did not come with clean hands.
“What they are trying to do is to set us backwards. We are talking about less cash in this economy and now you want to be charging customers for making transfers. If you do not want to be charged, you carry your cash. How are we helping this other policy, if we go this way? I think they need to rethink and have wider consultations.”
However, the House of Representatives faulted the CBN’s circular, dealing a great blow on the faux pas. The lower chamber of the National Assembly, after passing a resolution on the matter, consequently directed the apex bank to withdraw the circular because it completely misinterpreted the Cybercrime Act 2024. The lawmakers said CBN should, therefore, immediately issue an unequivocal circular in line with the letter and spirit of the law
The lawmakers explained that the levy of 0.5 per cent in all electronic transactions, according to Section 44 of the Cybercrime(Prohibition, Prevention, etc.) Amendment Act 2024, was expected to be remitted by businesses and regulators listed in the Second Schedule of the Act, to fund the National Cybersecurity Fund to be domiciled in the CBN and administered by the office of NSA
According to the lawmakers, Section 44(1) and(2)(a) of the Act(as amended) provides: “There is established a Fund, which shall be known as the National Cybersecurity Fund. There shall be paid and credited into the Fund, established under subsection(1) of this section and domiciled in the CBN, a levy of 0.5 per cent(0.005) equivalent to a half per cent of all electronic transactions value by the business specified in the Second Schedule to this Act,” and subsection(6) of the same Section 44 states: “The office of the NSA shall administer, keep proper records of the accounts and shall ensure compliance monitoring mechanism.”
The businesses and regulators listed in the Second Schedule of the Act and which are to pay the levy are: GSM service providers and all telecommunications companies; internet service providers; banks and other financial institutions; insurance companies and the Nigerian Stock Exchange.
According to the House Minority Leader, Hon. Kingsley Chinda (PDP, Rivers), who moved the motion on the cybersecurity levy, “the Fund is expected to be used for the establishment of the National Computer Emergency Response Team(CERT) Coordination Centre, which will be responsible for managing cyber incidents in Nigeria.
He said the wording of the CBN’s circular is open to multiple interpretations, including that customers should be made to pay the levy, against the letter and spirit of Section 44 and the Second Schedule of the Act, which specifies the businesses that should be levied accordingly
“Unless immediate pragmatic steps are taken to halt the proposed action of the CBN, the Cybercrime Act shall be implemented in error at a time when Nigerians are experiencing the aftermath of multiple removals of subsidies from petroleum, electricity and so on amidst rising inflation,” the Minority Leader submitted.
The House adopted the motion and directed the CBN to withdraw the ambiguous circular and issue an unequivocal one in line with the letter and spirit of the law. The lower chamber also directed its committees on banking regulations and other ancillary institutions to guide the apex bank properly.
Ironically and surprisingly, however, the upper chamber, the Senate, toed a different path on the cybersecurity levy. It applauded both the CBN and NSA for initiating the process for what it called the operationalisation of the cybersecurity levy
The Senate, through its Committee on National Security and Intelligence, defended the Act, saying that public hearings were held where Nigerians made their contributions before the amendment bill was passed into law by the two chambers of the National Assembly. The committee chairman, Shehu Buba Umar, said the Cybercrime Act 2015 was amended to correct some consequential words omitted in the law
Defending the desirability of the cybersecurity fund, Senator Umar said: “It is urgently imperative to fund the security of Nigeria’s Critical National Information Infrastructure (CNII), counter-terrorism and violent extremism, strengthen national security and protect digital economic interests and fully implement the National Cybersecurity Programme through the operationalisation of the National Cybersecurity Fund by all regulators and businesses specified in the Act.
The lower chamber has a strong ally in the fiery human rights lawyer, Femi Falana (SAN), who concurred with the lawmakers that the CBN, indeed, misinterpreted the provisions of the Cybercrime(Prohibition, Prevention, etc.) Amendment Act 2024 in imposing the levy. He said individual customers are not required to pay the 0.5 per cent levy, contrary to the CBN’s circular to the banks
Falana, in a press release he made on Thursday, said the circular issued by the CBN gave the erroneous impression that the levy is payable by individual customers. He said: “The errorneous interpretation might have arisen from the substitution of ‘businesses’ for ‘business’ in the amendment.”
“For the avoidance of doubt”, he said, “by virtue of Section 42(a) of the Cybercrime Act 2024, as amended, the businesses which are required to pay the levy are: (a)GSM service providers and all telecommunications companies; (b)Internet service providers; (c)Banks and other financial institutions;(d)Insurance companies and (e) the Nigerian Stock Exchange.
Falana said in view of this, CBN should be directed to withdraw the wrong circular and apologize to Nigerians “for the misleading interpretation of the clear and unambiguous Cybercrime(Prohibition, Prevention, etc.) Amendment Act 2024.”
Sadly enough, even if, indeed, the CBN misinterpreted the Cybercrime Act 2024 and the scale tilts against the GSM service providers and other big businesses and they eventually have to pay the levy, there is not much to cheer about. Those businesses will certainly pass the cost to the end users of their products and services, who are the same Nigerians already assailed by harsh economic environment. So, head or tail, the shadow or silhouette of the levy will come back to haunt Nigerians unless it is taken out totally.
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