By John Ikani
Nigerians are fuming over a new levy imposed by the Central Bank of Nigeria (CBN) on electronic bank transfers.
The 0.5% levy, intended to boost cybersecurity funding, is set to take effect in two weeks, sparking outrage among citizens already grappling with economic hardship.
Many Nigerians see the levy as a regressive tax that will disproportionately burden those struggling to afford basic necessities.
Dr. Abdulrazaq Fagge, an economics lecturer at Yusuf Maitama University, condemns the move as detrimental to the nation’s economic recovery.
He decried the additional burden it places on citizens already grappling with affording basic necessities.
“It is not only bad timing but a wrong move altogether as no government should put [an] additional burden on its citizens at a time they are struggling to get by,” he told BBC.
“If you transfer a million naira, five thousand naira gets deducted as cybersecurity levy, which is not fair to ordinary persons.”
Small businesses are also expected to bear the brunt of the levy. Dr. Fagge argues that the financial burden should fall on banks, considering their significant profits.
Ordinary citizens like bread seller Abubakar Sheka have vowed to abandon electronic transactions altogether.
Sheka highlights the meagre profit margins in his business and the additional strain the levy imposes.
He questioned the rationale behind this policy during a period of rising food and fuel costs.
“There is no way I will agree to be giving 0.5 percent on my transfers when I earn very little, many people don’t buy bread now and business is fragile.
“Why will this government further make us cry with this despite what we are already going through with high cost of food and fuel?” he quizzed newsmen.
The Nigeria Labour Congress and the Socio-Economic Rights and Accountability Project (SERAP) have vehemently rejected the levy. The government’s silence on the public outcry is concerning.
Analysts fear this policy could be a major setback for Nigeria’s cashless economy drive. Public affairs analyst Habu Sani predicts a return to cash dominance as people seek to avoid the levy.
This could trigger another cash shortage, similar to the one experienced in 2023 following currency reforms.
Ironically, the CBN’s push for electronic transactions last year, in part due to anti-fraud measures, led to increased mobile money adoption.
However, with only 8% of Nigerians aged 16-64 using mobile payments in 2024 (down from the previous year), low digital penetration due to limited mobile network coverage and smartphone affordability remains a hurdle.
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