Nigeria’s Central Bank Raises Electronic Transaction Fees to Boost Cybersecurity

Starting May 20, Nigeria’s Central Bank is upping the ante on cybersecurity by implementing a revised 2015 Cybersecurity Act. 

Every electronic transaction will now carry an additional 0.5% fee, a whopping 900% increase from the previous 0.005% levy. What does this mean for your wallet? Well, let’s break it down: if you transfer ₦1,000 electronically, you’ll now shell out ₦5 in fees. Bump up the transfer to ₦100,000, and you’re looking at a ₦500 fee.

But wait, there’s more! On top of this new levy, you’ll still have to pony up for other charges like stamp duty and a ₦50 fee for electronic money moves exceeding ₦10,000.

Now, before you start fretting, there are a few exceptions to this new fee frenzy. Transfers within the same bank, paying salaries, school fees, and repaying loans will be spared.

But not everyone’s thrilled about these changes. Experts in finance argue that this could hit low-income earners the hardest, especially since electronic transactions have become a lifeline for many daily activities. In fact, in 2023 alone, electronic transactions in Nigeria surged by a staggering 66% to over ₦600 trillion, as reported by the Nigeria Inter-Bank Settlement System (NIBSS).

Now, let’s rewind a bit. The Cybersecurity Act made its debut back in 2015 with a modest 0.005% levy on electronic transfers. Fast forward to 2024, and it’s gotten a major makeover. The levy has skyrocketed by 900% to 0.05%, and now, it’s not just banks in the crosshairs. Fintechs, payment service providers, and other financial institutions are also feeling the pinch.

But not everyone’s singing its praises. Some financial gurus argue that this move is a step backward. Instead, they advocate for tweaking the law and putting a cap on these transaction fees.

Adding fuel to the fire, National Security Adviser, Nuhu Ribadu, is pushing for the amended act’s swift implementation, citing the growing importance of cybersecurity. And where does all this extra cash go? It’s heading straight to the National Cybersecurity Fund (NCF), managed by none other than the National Security Adviser.

And if that’s not enough drama for you, last week saw the NSA throwing down the gauntlet. Five fintechs got the order to halt new customer sign-ups, with crypto taking centre stage as a national security concern.