In a significant development, the House of Representatives has directed the Central Bank of Nigeria (CBN) to withdraw its circular imposing a cybersecurity levy on all electronic transactions. This move comes in the wake of widespread public outcry and criticisms from various stakeholders, including organized labor unions, professional associations, and commercial entities.
The House’s intervention highlights the apparent disconnect between the intentions of the Cybercrimes (Prohibition, Prevention, Etc.) Amendment Act 2024 and the CBN’s interpretation and implementation of its provisions. The lawmakers have accused the apex bank of misinterpreting the Act, leading to ambiguity and confusion surrounding the levy’s application.
At the core of the controversy lies Section 44 of the Act, which mandates a 0.5% levy on electronic transactions for businesses and regulators listed in the Second Schedule. However, the CBN’s circular appeared to extend this levy to individual bank customers, a move that has been widely condemned as an additional burden on Nigerians already grappling with the aftermath of subsidy removals and rising inflation.
The House’s directive to withdraw the ambiguous circular and issue a clear, unequivocal interpretation aligns with the spirit of the law is a commendable step towards safeguarding the interests of the Nigerian people. By stepping in and asserting its oversight role, the legislature has sent a strong message that it will not tolerate the misinterpretation or misapplication of laws, especially when it adversely impacts the already strained populace.
However, the situation also raises pertinent questions about the legislative process itself. While the House’s intervention is laudable, it begs the question of why such ambiguities and potential misinterpretations were not addressed during the drafting and enactment of the Cybercrimes Act. This incident highlights the need for more robust and inclusive consultations with relevant stakeholders, including legal experts, to ensure clarity and prevent unintended consequences.
The controversy has also reignited debates around the constitutionality of certain provisions within the Cybercrimes Act. Senior Advocate of Nigeria, Kunle Adegoke, has questioned the legality of Section 44, arguing that it contradicts Section 162 of the Constitution, which mandates that all revenue collected must first go into the Federation Account before being appropriated. If Adegoke’s assertion is valid, it could potentially nullify the entire provision and render the CBN’s directive unconstitutional from the outset.
Furthermore, the Nigerian Economic Summit Group (NESG) has raised valid concerns about the potential impact of the levy on financial inclusion efforts. The group argues that introducing additional transaction costs could discourage unbanked Nigerians from embracing formal financial services, thereby undermining the CBN’s ambitious targets for financial inclusion.
While the intention behind the cybersecurity levy – funding efforts to combat cybercrime and protect the national economy – is noble, the implementation approach has been deeply flawed. The House’s intervention is a necessary corrective measure, but it also highlights the urgent need for more comprehensive stakeholder engagement, constitutional scrutiny, and a holistic review of the policy’s potential unintended consequences.
As the dust settles on this controversy, it is imperative that the government learns valuable lessons. Effective policymaking requires not only good intentions but also a thorough understanding of the legal, economic, and social implications. Failure to do so risks eroding public trust and undermining the very objectives these policies aim to achieve.
Reference
Reps Ask CBN To Withdraw Circular On Cybersecurity Levy published in Daily trust