New Cybersecurity Levy Directive by Central Bank of Nigeria

The Central bank of Nigeria (CBN) has issued a new directive requiring deposit money banks in the country to impose a 0.5% cybersecurity levy on certain transactions conducted by their customers.

This directive was communicated through a circular dated May 6, 2024, addressed to various financial institutions including commercial, merchant, non-interest, and payment service banks, as well as mobile money operators and payment service providers.

Key Points from the Circular:

• The levy is in accordance with the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024.
• The levy amount is set at 0.5% of the value of all electronic transactions specified in the Second Schedule of the Act.
• Funds collected through this levy will be remitted to the National Cybersecurity Fund (NCF) administered by the Office of the National Security Adviser (ONSA).
• Implementation of the levy is scheduled to commence two weeks from the circular’s date.

• The levy will be deducted at the point of electronic transfer origination and reflected in the customer’s account as ‘Cybersecurity Levy’.

• Financial institutions are required to remit the collected levies to the NCF account at the CBN by the fifth business day of each subsequent month.

Exempted Transactions:

• The cybersecurity levy will not apply to transactions such as loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, inter-branch transfers within a bank, cheque clearing and settlements, Letters of Credits, and certain funding activities related to banks’ recapitalization.
• Transactions involving savings, deposits, long-term investments, and other specified categories are also exempt from this levy.

This new cybersecurity levy aims to enhance cybersecurity measures in the financial sector and ensure the protection of electronic transactions against cyber threats. Financial institutions and customers are advised to familiarize themselves with the details of the directive to comply with the requirements set forth by the CBN.