The Central Bank of Nigeria (CBN) has issued a directive instructing deposit money banks in the country to impose a 0.5% cybersecurity levy on transactions. The decision, conveyed through a circular dated May 6, 2024, applies to all commercial, merchant, non-interest, and payment service banks, as well as mobile money operators and payment service providers.

Quoting from the circular, the CBN stated: “Following the enactment of the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024 and pursuant to the provision of Section 44 (2) (a) of the Act, ‘a levy of 0.5% (0.005) equivalent to a half percent of all electronic transactions value by the business specified in the Second Schedule of the Act’, is to be remitted to the National Cybersecurity Fund (NCF), which shall be administered by the Office of the National Security Adviser (ONSA).”

The implementation of the levy is slated to commence two weeks from the circular’s issuance date.

The circular further details the operational framework: “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’. Deductions shall commence within two weeks from the date of this circular for all financial institutions and the monthly remittance of the levies collected in bulk to the NCF account domiciled at the CBN by the fifth business day of every subsequent month.”

However, certain transactions are exempted from this levy, including loan disbursements and repayments, salary payments, and intra-account transfers within the same bank or between different banks for the same customer. Also excluded are inter-branch transfers within a bank, cheque clearing and settlements, Letters of Credits, and banks’ recapitalization-related funding, among others.

This directive follows the CBN’s recent measures, including the cessation of onboarding new customers by fintech firms like Opay and Palmpay, and the mandate for banks to apply a 0.375% stamp duty charge on all mortgaged-backed loans and bonds.