The Central Bank of Nigeria (CBN) is projected to generate approximately N50 billion by the end of 2024 through the newly introduced 0.005% cybersecurity levy on electronic transactions, according to economic analysts.
Vincent Nwani, Head of Research at FMDQ Group Plc, confirmed this projection, highlighting the significant growth in electronic payments in recent years. Data from the Nigeria Inter-Bank Settlement System indicates that electronic payments reached a staggering total of N987 trillion between 2022 and 2023. Applying the 0.005% levy to this total results in an estimated revenue of around N49.35 billion.
In detail, electronic payments amounted to N387 trillion in 2022, generating N19.35 billion from the levy. This figure soared to N600 trillion in 2023, leading to N30 billion in revenue. Nwani explained, “We witnessed a remarkable 55% increase in total electronic payments from N387 trillion in 2022 to N600 trillion in 2023, with projections for 2024 at N999.9 trillion. At 0.005% cybersecurity fees, this would equate to approximately N50 billion.”
Additionally, Nwani noted a significant rise in point-of-sale (PoS) transactions, which increased by 27.85% from N8.39 trillion in 2022 to N10.73 trillion in 2023. He pointed out that PoS transactions cost Nigerians N214.6 billion in 2023 due to a N100 fee on every N5,000 withdrawal.
David Adonri, Vice Chairman of Highcap Securities, commented on the trend, stating, “The increase in electronic payments is driven by the CBN’s cashless policies and naira redesign. Despite contractionary monetary policies, the money supply continues to grow, likely boosting electronic payments even further in 2024.”
He added that with projected electronic payments reaching N999 trillion, the levy could indeed yield N50 billion for the government.
The 0.005% levy, enacted under the Cybercrime (Prohibition, Prevention, etc.) (Amendment) Act 2024, applies to all electronic transactions and aims to fund the National Cybersecurity Fund managed by the Office of the National Security Adviser. Despite initial resistance from President Bola Tinubu and the House of Representatives, who called for a suspension and review of the policy, the CBN remains committed to enforcing the levy.
As Nigeria continues to adapt to a more cashless economy, the implications of this levy and the resulting revenue generation will be closely monitored, reflecting the ongoing evolution of the nation’s financial landscape.