Nigeria’s central bank has scrapped a controversial 0.5% cybersecurity levy on electronic transfers just days before it was to be implemented.
This levy, introduced in the 2024 amendment to the Cybersecurity Act, marked a dramatic increase from 0.005% to 0.5% and included fintechs, payment service providers, and other financial institutions.
The central bank announced the withdrawal in a circular signed by Chibuzo Efobi and Haruna Mustafa, directors of the payment system management team and financial policy and regulation, respectively.
Financial industry experts criticised the levy as “regressive” due to the steep cost increase during a time of high inflation and a cost of living crisis in Nigeria. Mounting pressure from labour unions led the federal government to suspend the levy, promising a review on Tuesday.
Had it gone into effect, the levy would have charged ₦5 for a ₦1,000 transfer and ₦500 for a ₦100,000 transfer.
The levy would have been in addition to existing charges like stamp duty, SMS fees, and national payment switch fees, making a ₦10,000 transaction cost ₦130.875. However, there were exceptions for transfers within the same bank, salary payments, school fees, and loan repayments.
The cancellation of this levy is a relief for many Nigerians who heavily rely on electronic transfers.
Paystack, a leading Nigerian fintech company, reported that bank transfers made up over half of its processed transactions in 2023, with electronic transactions in the country increasing by 66% to over ₦600 trillion that year.
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