The CBN new policy: Everything You Need To Know About The 0.5% Levy

Few weeks ago, May 20th to be precise, Nigerians will start paying more charges for digital transactions.

What’s going on? 

The Central Bank of Nigeria released a circular on Monday to different categories of banks, mobile money operators, payment service providers and others, ordering them to start charging a 0.5 % cybersecurity levy on transactions. For example, following the new CBN directive, if a customer wants to transfer the sum of ₦10,000, the customer will be charged ₦50 for the cybersecurity levy.

This excludes bank charges or other charges incurred on bank transactions. Already, Nigerians pay a ₦50 stamp duty on transactions, transfer fees between ₦10 and ₦50, depending on the fee, and Value Added Tax of ₦0.75 on 10 transfers; ₦1.875 on 25 transfers; and ₦3.75 on 50 transfers.

Are there exceptions?

Yes, some transactions are excluded from the cybersecurity fee, like loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, and intra-bank transfers between customers of the same bank.

Other financial institutions’ instructions to their correspondent banks, interbank placements, banks’ transfers to CBN and vice versa, inter-branch transfers within a bank, cheque clearing and settlements, letters of credits, banks’ recapitalisation-related funding—only bulk funds movement from collection accounts, among others.

What does this mean?

For everyday users, the additional transaction charge raises concerns about the rising cost of digital services, potentially impacting consumer behaviour and digital adoption rates. Nigeria’s e-payment system has grown from about ₦150 trillion a couple of years ago to a little over ₦600 trillion in 2023. This growth was as a result of a mobile payment leap and an almost seamless interbank transfer system, which falls under the purview of this new tax.

The simple question is: what are we benefiting from government that they won’t allow us to breath?