Nigeria's recent introduction of a 0.005 percent cybersecurity levy on electronic transactions has sparked a significant backlash from various quarters, including the Nigeria Labour Congress (NLC), the Trade Union Congress (TUC), and the Bank Customers Association of Nigeria. These groups have called for the immediate withdrawal of the levy, citing concerns over increased economic hardship and potential disruptions to the financial inclusion goals of the Central Bank of Nigeria (CBN).
Joe Ajaero, President of the NLC, criticized the levy as an additional burden on Nigerians who are already facing economic difficulties. "This new levy is yet another anti-people policy imposed amid economic hardship. It threatens to exacerbate the financial strain already faced by the populace," Ajaero stated in a press release.
Similarly, TUC's National Vice President, Tommy Etim, expressed concerns that the levy could deter people from using banking services, potentially pushing more transactions into the informal economy, which could hurt manufacturing and entrepreneurial activities. Etim highlighted the lack of stakeholder engagement in the decision process, emphasizing that such unilateral government actions could undermine public trust and democratic engagement.
Dr. Uju Ogubunka, President of the Bank Customers Association of Nigeria, referred to the levy not as a charge but as a new form of government taxation, which was implemented without adequate justification or consultation. "This will set us backwards. We are talking about promoting less cash in the economy, and now you're penalizing customers for making transfers," Ogubunka argued, suggesting that the levy could contradict other financial policies aimed at enhancing the digital economy.
The CBN, in its circular, outlined that the levy was part of the enforcement of Nigeria's amended cybercrime law, which includes the operationalization of the National Cybersecurity Fund. This fund targets a small percentage of all electronic transactions to bolster the country's cybersecurity infrastructure. While certain transactions are exempt, such as salary payments and government social welfare programs, the broad application of the levy has raised concerns about its overall impact on everyday financial activities of ordinary Nigerians.
Business leaders, like Dele Kelvin Oye, National President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), have also voiced objections. Oye called for a thorough review and reconsideration of the levy, suggesting that the financial burden of cybersecurity should be integrated into the current security and defense budget rather than imposed as a separate charge on transactions.
Economic experts and academicians are calling for a suspension of the policy to allow for more comprehensive consultations and reviews. They argue that the implementation of such a levy without a thorough impact assessment risks undermining the growth of digital transactions and could exacerbate the economic challenges faced by businesses and consumers alike.
As debates continue, the NLC and other stakeholders are seeking dialogue with the government to revisit the policy, emphasizing the need for transparency, fairness, and public involvement in decisions that have far-reaching implications on the economic wellbeing of Nigerians.
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