By Martin Ekpeke
The Founder, GoLegit Africa, Mr. Remi Afon has given some insight into the 0.5 percent cybersecurity levy on all electronic transactions, which many citizens especially on social media argue is coming at the wrong time, following the hardship being faced by the average Nigerian presently.
The Central Bank of Nigeria (CBN) had in a circular jointly signed by Chibuzor Efobi, Director of Payments Systems Management and Haruna Mustafa, Director of Financial Policy and Regulation, yesterday announced a 0.5 percent cybersecurity levy on all electronic transactions effective May 20, 2024.
The announcement directed all financial institutions to initiate the deductions for onward remittance to the National Security Fund, overseen by the Office of the National Security Adviser (ONSA).
But reacting to the announcement, the founder of GoLegit Africa, a non-governmental organization dedicated to helping individuals who have been involved in or aspire to be involved in cybercrimes to turn their lives around and become productive members of society, said the levy has been a component of the Cybercrime Act of 2015 and is aimed at contributing to the National Cybersecurity Fund.
Remi Afon, a former President of the Cyber Security Expert Association of Nigeria (CSEAN), added that with the recent amendment in the 2024 Act, the government has opted to initiate its implementation.
He argued that the implementation comes with pros and cons as highlighted below:
Pros:
- Funding for Cybersecurity Infrastructure: The levy can generate revenue to invest in cybersecurity infrastructure, including training, tools, and technologies to protect against cyber threats. This can enhance Nigeria’s overall cybersecurity posture and better defend against cyberattacks.
- Increased Awareness: Introducing the levy can raise awareness about the importance of cybersecurity among businesses and individuals. It can encourage them to take proactive measures to secure their digital assets and sensitive information, thereby reducing the likelihood of successful cyberattacks.
- Deterrent to Cybercriminals: A portion of the levy revenue can be allocated to law enforcement agencies to investigate and prosecute cybercriminals. Knowing that there are resources dedicated to combating cybercrime can act as a deterrent to potential attackers.
Cons:
- The burden on Consumers and Businesses: The levy could increase the cost of electronic transactions for consumers and businesses. Even though it’s a small percentage, it can add up, especially for frequent users of electronic payment systems. This might discourage the use of electronic transactions and hinder financial inclusion efforts.
- Administrative Complexity: Implementing and managing the levy system can introduce administrative complexities for financial institutions, businesses, and government agencies. This includes collecting the levy, ensuring compliance, and allocating funds effectively, which could create additional bureaucracy and overhead costs.
- Potential for Misuse of Funds: There’s a risk that the funds generated from the levy might not be utilized efficiently or transparently. Without proper oversight and accountability mechanisms, there could be misuse or misallocation of funds, leading to ineffective cybersecurity initiatives and wasted resources.
- Impact on Small Businesses: Small businesses, in particular, may struggle to absorb the additional cost imposed by the levy. This could disproportionately affect them compared to larger corporations with more financial resources, potentially stifling innovation and economic growth in the long run.
He also recommend that, while a cybersecurity levy on electronic transactions can provide much-needed funding for cybersecurity initiatives, careful consideration must be given to its implementation to mitigate potential drawbacks and ensure that it effectively contributes to improving cybersecurity resilience in Nigeria.