The Central Bank of Nigeria is forecasted to generate around N50 billion by the close of 2024 from the newly introduced 0.005 percent cybersecurity levy on electronic transactions, according to projections by economic analysts.
The Head of Research at FMDQ Group Plc,Vincent Nwani, explained that the CBN aims to collect N50 billion from this levy within the year.
“The CBN is expected to raise N50bn from the cybersecurity levy by 2024,” he stated.
Figures from the Nigeria Inter-Bank Settlement System show that electronic payments amounted to a staggering N987 trillion across 2022 and 2023. When the 0.005 percent levy is applied to this total, it translates to an estimated revenue of approximately N49.35 billion.
Nwani further elaborated on the annual breakdown, noting that in 2022, electronic transactions reached N387 trillion, yielding N19.35 billion from the levy.
By 2023, with a sharp rise in transactions to N600 trillion, revenue from the levy climbed to N30 billion.
“For instance, we saw a remarkable 55 percent surge in total electronic payments, from N387 trillion in 2022 to N600 trillion in 2023, and the 2024 figure is projected at N999.9 trillion. At 0.005 percent cybersecurity fees, the Nigerian government will earn N19.5bn for 2022, N30bn for 2023; 2024 will be equivalent to N50bn [projected figure] from its citizens,” he explained.
He also observed an upward trend in point-of-sale transactions, which increased by 27.85 percent, growing from N8.39 trillion in 2022 to N10.73 trillion in 2023. He pointed out that Nigerians incurred N214.6 billion in PoS fees in 2023 due to the N100 charge on every N5,000 withdrawal.
“In 2023, the total value of PoS transactions surged to N10.73 trillion, up from N8.39 trillion in 2022, marking a notable 27.85 percent increase. Additionally, a fee of N100 is charged for every N5,000 withdrawn via PoS, equating to two percent of the withdrawal amount. POS transactions cost Nigerians a total of N214.6bn in 2023 and N167.8bn in 2022. This growing reliance on PoS and the associated charges reflect the broader economic effects of the cashless policy on the population,” the economist noted.
Vice Chairman of Highcap Securities, David Adonri, also weighed in on the issue, attributing the rise in electronic payments to the CBN’s cashless initiatives and naira redesign efforts. He warned that despite the CBN’s contractionary monetary policies, the money supply is still expanding, potentially pushing electronic payment volumes even higher in 2024.
“With the projected rise in electronic payments to N999tn, the levy could indeed generate as much as N50bn for the government,” Adonri remarked.
The 0.005 percent levy, implemented under the Cybercrime (Prohibition, Prevention, etc.) (Amendment) Act 2024, is applicable to all electronic transactions and aims to bolster the National Cybersecurity Fund managed by the Office of the National Security Adviser.
Despite initial opposition from President Bola Tinubu and the House of Representatives, who had called for the policy’s suspension and review, the CBN has reaffirmed its commitment to enforcing the levy, underscoring its importance for funding cybersecurity initiatives in the country.
