NESG seeks reconsideration of Cybersecurity Levy

The Nigerian Economic Summit Group (NESG) has urged the Central Bank of Nigeria (CBN) to reconsider its recent imposition of a cybersecurity levy on all electronic transactions.

Highlighting potential adverse effects, the NESG emphasized that the levy might exacerbate economic challenges faced by households, particularly amid employment uncertainties and income disparities.

The group expressed concerns that the levy, set at 0.5 per cent (equivalent to 0.005), could impede progress toward financial inclusion.

They suggested alternative policy strategies such as increased capital spending and government transfers to mitigate the impact on economic actors.

NESG cautioned that levies could strain aggregate demand and limit economic growth, potentially leading to a decline in Gross Domestic Product (GDP).

While acknowledging the intention to combat cybercrimes and boost government revenue, the group emphasized the importance of achieving higher revenue without disproportionately burdening poor and vulnerable Nigerians.

NESG warned that the policy might inadvertently create loopholes for cybercriminals to exploit alternative routes for illicit activities. Instead, they advocated for an integrated approach involving collaboration among financial institutions, security agencies, the EFCC, and other stakeholders to effectively combat cybercrimes.

The CBN, had on Monday, issued a circular to various financial institutions, including commercial, merchant, non-interest, and payment service banks, indicating that the cybersecurity levy would take effect two weeks from the release of the circular.