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CBN backtracks on cybersecurity levy, withdraws circular

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By Temi Olowu

In a move in alignment with the presidential directive, the Central Bank of Nigeria (CBN) has withdrawn its directive for banks and financial institutions to collect a cybersecurity levy from customers.

The levy, outlined in the recently amended Cybercrime Prevention and Prohibition Act of 2024, faced widespread criticism for potentially adding an unnecessary burden to consumers.

The CBN announced the reversal in a revised circular dated May 17th, signed by key officials. This comes just weeks after the initial directive on May 6th, which sparked public outcry and concerns about the levy’s impact on financial transactions.

The proposed levy, a 0.5% charge on electronic transactions, aimed to fund national cybersecurity initiatives. However, critics argued that it would disproportionately affect low-income citizens and discourage cashless transactions, a key policy goal of the CBN.

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The public backlash reached the highest levels of government. Following the CBN’s initial directive, the Federal Executive Council intervened, suspending the levy’s implementation for further review.

This suspension likely played a significant role in the CBN’s decision to fully withdraw the directive.

The CBN’s retreat on the cybersecurity levy highlights the importance of public engagement in policy formulation.

With this episode, the Nigerian government has an opportunity to reassess cybersecurity funding strategies and explore alternative options that are both effective and less burdensome on citizens.

(Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

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