What a nation: “In a move said to be aimed at fortifying Nigeria’s digital defenses, the Central Bank of Nigeria (CBN) has issued a directive mandating financial institutions to enact a cybersecurity levy. This levy, amounting to 0.5% of the value of all electronic transactions, is intended to boost the National Cyber Security Fund administered by the Office of the National Security Adviser (NSA).”

We’re already paying NITDA Levy (information technology),  ITF (training), TETFUND (education), and now Cybersecurity Levy, besides other auxiliary fees. I expect by 2027 for a Federal Labour Levy to be enacted to help pay salaries of workers.

Nigeria does not need this playbook. What we need is to GROW the economy so that corporate taxes can take care of these auxiliary fees. America waived online sales taxes for more than a decade to grow the ecommerce sector, knowing that when companies like Amazon ascend, all the lost taxes would be made up.

In other words, there is a clear plan with a big picture. We need to learn something because this piecemeal disparate approach of charging this and that, as fees, on people’s properties, seems non-optimal in my view. Taking 0.5% is a lot of money, and it makes the Office of the National Security Adviser (NSA) the most investable fintech in Nigeria if it is open for investments.

Meanwhile, the plan to register POS agents in Nigeria is a good policy. There is no more room in Nigeria for informal players: “Nigeria’s 1.9 million PoS agents are now required to register with the Corporate Affairs Commission (CAC) by the Federal Government to tackle fraud and enhance financial inclusion. This move, which includes providing a unique terminal identification number to each PoS agent and may require Know Your Customer (KYC) documents for certain transactions, is expected to be completed within a two-month timeline with the support of fintech companies.”

What a nation: “In a move said to be aimed at fortifying Nigeria's digital defenses, the Central Bank of Nigeria (CBN) has issued a directive mandating financial institutions to enact a cybersecurity levy. This levy, amounting to 0.5% of the value of all electronic transactions,… pic.twitter.com/lBef78ApqX

— Ndubuisi Ekekwe (@ndekekwe) May 7, 2024

In a move said to be aimed at fortifying Nigeria’s digital defenses, the Central Bank of Nigeria (CBN) has issued a directive mandating financial institutions to enact a cybersecurity levy. This levy, amounting to 0.5% of the value of all electronic transactions, is intended to boost the National Cyber Security Fund administered by the Office of the National Security Adviser (NSA).

The CBN’s directive, communicated via a circular signed by Chibuzor Efobi and Haruna .B. Mustafa, Directors of payments system management and financial policy and regulation respectively, signifies a proactive approach to combating the escalating threat of cybercrime. This move comes in response to the enactment of the 2024 Cybercrime (Prohibition, Prevention, etc) Amendment Act, which provides the legal framework for the implementation of the cybersecurity levy.

According to the circular, financial institutions, including banks, mobile money operators, and payment service providers, are required to commence the deduction and collection of the cyber security levy within two weeks of the circular’s issuance. The levy will be calculated as 0.5% of the value of all electronic transactions, with the funds channeled into the National Cyber Security Fund to enhance Nigeria’s cybersecurity capabilities.

“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).

“Accordingly, all Banks, Other Financial Institutions, and Payments Service Providers are hereby required to implement the above provision of the Act as follows.

“Calculate the levy based on the total 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’.”

The CBN’s directive comes amid escalating threats posed by cybercriminals. With the rapid digitization of financial services and the increasing reliance on electronic transactions, Nigeria’s digital infrastructure has become a prime target for cyberattacks. The Nigeria Inter-Bank Settlement System (NIBSS) said that financial institutions lost about N17.67 billion to fraud in 2023.

Thus, the implementation of the cybersecurity levy is believed to be a proactive measure to safeguard against these threats and protect the integrity of Nigeria’s digital economy.

However, while the cybersecurity levy is a step in the right direction, its implementation also raises several challenges and implications for both consumers and businesses. 

Everyday users may experience concerns about the potential increase in the cost of digital services, as the levy is likely to be passed on to consumers in the form of higher transaction fees. This could impact consumer behavior and adoption rates of digital financial services, particularly among low-income individuals who are more sensitive to changes in transaction costs.

Similarly, businesses will need to adjust their financial strategies to accommodate the levy, balancing the need for compliance with the imperative of managing operational costs. The stringent penalties for non-compliance, including fines amounting to no less than 2% of the annual turnover for defaulting businesses, underscore the seriousness of this initiative and the importance of adherence to cybersecurity protocols.

Despite these challenges, many believe the implementation of the cybersecurity levy is a representation of a crucial step forward in Nigeria’s efforts to strengthen its digital resilience. They believe that by investing in cybersecurity infrastructure and capabilities, Nigeria can better protect its digital assets and safeguard against the potentially devastating impact of cyberattacks. 

Amidst growing criticism faced by the Lagos government over the recent demolition of buildings and shanties across the state, Oluyinka Olumide, the Commissioner for Physical Planning and Urban Development in Lagos, has disclosed a startling revelation. 

In an interview with journalists, Olumide revealed that an overwhelming 80 percent of buildings in the Ibeju Lekki-Epe corridor lack government approval.

Olumide shed light on the challenges encountered in securing government approval for property development, citing the persistence of developers and property owners in circumventing due process. He explained the rigorous procedures involved in obtaining approval and stressed the importance of adhering to zoning regulations.

“The procedure to get approval is first to get the planning information, as to what those areas have been zoned for. In this case, what we have is agricultural land, and people now go to their families to buy agricultural land. Of course, those lands would be sold because those families do not know the use such land would be put to,” Olumide explained.

He outlined the multi-layered process involved in obtaining approval, including obtaining planning information, fence permits, and layout permits.

“The procedure to get approval is first to get the planning information, as to what those areas have been zoned for. In this case, what we have is agricultural land, and people now go to their families to buy agricultural land. Of course, those lands would be sold because those families do not know the use such land would be put to,” he said.

“The next thing to do is the fence permit. If you missed the earlier information on not knowing the area zoning, at the point of getting the fence permit, you would be able to detect what the area is zoned for. After that, the layout permits a large expanse of land. So, you can see all these layers. 

“But people still go ahead to start advertising. Some have even gone to the extent of displaying the sizes they want to sell. Imagine someone in the diaspora who wants to send money without any knowledge.

“Then, no approval is eventually gotten. Even if they pass the assignment and the survey to them, we would not grant the individual permit, because that area is not zoned for that purpose.”

Despite these stringent requirements, Olumide blamed the proliferation of unauthorized structures in the Ibeju Lekki-Epe corridor on developers’ actions.

The disclosure has stirred fresh criticism against the government, with many describing it as a sign of poor governance. 

One of the shortfalls cited by critics is the overly assertive function of the Lagos State Building Control Agency (LASBCA), which is expected to result in not less than 90 percent approval of buildings in Lagos. The LASBCA is notably at every construction site across the state, and in most cases, sealing them off until approval is given.

Thus, the people imagine, how despite this close monitoring of construction projects in Lagos, the government could boldly announce that 80 percent of buildings in the Ibeju Lekki-Epe corridor lack government approval. 

Against this backdrop, critics have raised concerns about the effectiveness of the LASBCA in ensuring compliance with building regulations across the state. 

Furthermore, economists warn that this development could have negative implications for Nigeria’s quest for foreign direct investments. The lack of proper regulation and oversight in Nigeria’s commercial capital undermines investor confidence and raises doubts about the government’s commitment to creating a conducive business environment.

In response to the criticism, the commissioner for the environment in Lagos, Tokunbo Wahab, said that the demolished structures were erected in contravention of the city’s master plan and had occluded drainage channels. He added that the government’s actions were by the law, aimed at removing encumbrances obstructing drainage channels.

However, the response has failed to curtail the growing anti-investment sentiment stemming from the state’s approach. 

Amidst mounting pressure, the Lagos government faces the daunting task of restoring public trust and ensuring adherence to regulatory standards to foster sustainable development and attract much-needed investment to Nigeria’s commercial hub.

Stakeholders are calling for greater transparency and accountability in the approval process for property development in the state. They note that the revelation of widespread non-compliance underlines the need for stricter enforcement measures to prevent unauthorized construction and safeguard public infrastructure.