The House of Representatives has taken a firm stance against the implementation of the Central Bank of Nigeria’s (CBN) cybersecurity levy, calling for an immediate halt to its execution. 

This directive comes in response to a circular issued by the apex bank, which the House believes is prone to misinterpretation by Nigerians and violates the provisions of the Cybercrime Act.

In a motion presented by Minority Leader Kingsley Chinda (PDP Rivers) on behalf of the members, the House emphasized the need for the CBN to withdraw its previous circular on the levy and issue a new one consistent with the provisions of the Cybercrime Act. Section 44(2a) of the act specifies entities such as GSM and telecom companies, internet providers, banks, financial institutions, insurance companies, and the Stock Exchange as liable for the levy, not individual Nigerians.

The decision by the House reflects concerns that the implementation of the levy has the potential to aggravate economic hardships faced by Nigerians, particularly in light of ongoing challenges such as the increase in petroleum product prices, and the free fall of the naira resulting in sky-high inflation. 

The circular from the CBN has stirred apprehension across the country, prompting calls for its immediate withdrawal.

Peter Obi, the former presidential candidate of the Labour Party has condemned the Cybersecurity Levy, describing it as ‘‘milking a dying economy.’’ In a statement issued on Wednesday, Obi decried the rate President Bola Tinubu’s government is increasing taxes, despite his assurances to address multiple taxation as a way of creating a conducive business environment.

‘‘The imposition of a Cybersecurity Levy on bank transactions is particularly sad given that the tax is on the trading capital of businesses and not on their profit hence will further erode whatever is left of their remaining capital, after the impact of the Naira devaluation and high inflation rate,’’ he said.

Also, the Centre for the Promotion of Private Enterprise (CPPE) raised alarm over the adverse effects of the newly introduced cybersecurity levy and a barrage of other taxes imposed by various tiers of government in Nigeria. 

A statement signed by Dr. Muda Yusuf, the CEO of CPPE, raised concerns regarding the detrimental impact of these levies on the capacity of businesses to stimulate economic growth.

“Businesses and the generality of citizens are yet to recover from the shocks of current reforms. Inflationary pressures have not abated, high cost of living is still a major worry, operating and production costs for businesses remain elevated, amidst weak consumer purchasing power. This is not a good time to impose an additional levy both on businesses and citizens,” he said.

Socio-Economic Rights and Accountability Project (SERAP) has condemned the policy, giving the federal government a 48-hour ultimatum to retract the 0.5% cybersecurity levy imposed on Nigerians. 

The levy, directed by the CBN to be implemented effective May 20, 2024, entails a 0.5% charge on electronic transactions, with proceeds remitted to the National Cybersecurity Fund administered by the Office of the National Security Adviser (NSA), headed by former Chairman of the Economic and Financial Crimes Commission (EFCC) Nuhu Ribadu.

The CBN’s clarification indicates that the levy will be reflected in customers’ accounts as a “Cybersecurity Levy” and applied at the point of electronic transfer origination, subsequently deducted and remitted by financial institutions. Despite the CBN’s assertion that this directive aligns with previous circulars issued in 2018, criticism persists regarding its potential adverse effects on Nigerians already grappling with economic challenges.

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The former Minister of Aviation, Hadi Sirika, along with his daughter, Fatimah, and two others, has been arraigned before the Federal Capital Territory High Court by the Economic and Financial Crimes Commission (EFCC) over an alleged N4.1 billion fraud related to the failed Nigerian Air project between April 2022 and March 2023. 

The charges against them include conferring unfair advantage in the illegal award of consultancy contracts and awarding contracts to companies linked to family members.

Upon their arraignment, all defendants pleaded not guilty to the charges. However, the defense counsel, Kanu Agabi, sought bail for Sirika based on self-recognition, a request opposed by the prosecutor, Rotimi Jacobs. Despite the opposition, Justice Sylvanus Oriji granted bail to Sirika and his daughter of one hundred million naira each with two sureties in like sum.

The sureties are required to declare to an affidavit, and failure to meet the bail conditions would result in the defendants being remanded in prison pending compliance. This development follows the detainment of Sirika by the EFCC on April 23 before his arraignment.

The charges against Sirika include allegations of awarding consultancy contracts to Tianaero Nigeria Limited for the startup of Air Nigeria, with Prof. Gabriel Tillman, reportedly an associate of the former Minister, acting as the alter ego of the firm. 

Tianaero received N1.3 billion for its consultancy services. Additionally, Sirika is accused of awarding a contract worth approximately N1.4 billion for the construction of the apron at Katsina Airport to Al-Duraq Global Investment Limited, a company owned by his daughter and son-in-law.

The back story

Sirika’s tenure as the Minister of Aviation was mired in corruption allegations, notably, his purchase of 12 firefighter vehicles at the cost of N1 billion each, and the launch of the non-existent Nigerian Air. The national carrier was launched two days before the end of President Muhammadu Buhari’s government.

Last May, following the hasty launch of Nigerian Air, investigative journalist David Hundeyin reported that Sirika was being fraudulent by presenting a rented plane to Nigerians. In his report, Hundeyin noted that that unveiled aircraft, a Boeing 737-800 with registration number, ET-APL, belonged to the Ethiopian Airlines – and was still in active service with the company.

Aviation expert and analyst, Captain Ado Sanusi, also said in an interview with ChannelsTV then that it is practically impossible for Nigeria Air to start commercial passenger operation in two days given the rigorous process involved, upholding the Hundeyin’s report that the launch was fraudulent.

Although in June 2022, Sirika disclosed that the majority shares of 49 percent of the Nigeria Air project will be owned by Ethiopian Airlines, 46 percent by Nigerians while the Federal Government will own just five percent of the shares, the unveiling of just one plane not backed by operational infrastructure, among other things, created doubts and questions about the national carrier.

Against this backdrop, the House of Representatives launched an investigation. During the investigation, the Nigerian Airspace Management Agency (NAMA) told members of the committee that the aircraft bearing Nigerian colors was on a chartered flight to Nigeria. According to other stakeholders who confirmed NAMA’s disclosure, a chartered flight could be painted in any color and with any inscriptions.

Consequently in June 2023, the House of Representatives declared the launch of Nigerian Air fraudulent, ordering that the national carrier project, which reportedly gulped N85 billion, be suspended immediately.

The case against Sirika and his co-defendants, which has long been anticipated, is one of several others that allegedly took place under the administration of Buhari. Anti-graft said that this development, like several others, serves as a stark reminder of the persistent challenges posed by deep-rooted corruption in Nigeria’s governance system. 

They note that the alleged misappropriation of funds meant for crucial aviation projects reflects a systemic issue that undermines trust in governance and diverts resources away from much-needed infrastructure development. The ramifications of such alleged corruption in public office are profound, particularly in the context of Nigeria’s economic development. 

Such corruption not only erodes public confidence but also hampers the country’s ability to attract investment and foster sustainable economic growth, they say.

The current Minister of Aviation, Festus Keyamo, has suspended the Nigerian Air project. Keyamo, who pledged reforms in the aviation sector, announced that all arrangements initiated under Sirika, including the proposed Nigeria Air project, have been halted to facilitate a thorough audit of contracts.