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NESG Warns Against Cybersecurity Levy Impact on Financial Inclusion

NESG Warns Against Cybersecurity Levy Impact on Financial Inclusion

May 11, 2024

The Nigerian Economic Summit Group (NESG) has raised concerns over the Federal Government’s proposed 0.5 percent cybersecurity levy, stating it could undermine efforts to achieve 95 percent financial inclusion by 2025.

In a recent report, the NESG criticized the timing of the levy, citing potential negative impacts on financial inclusion initiatives and public sentiment. The group proposed targeting high-net-worth individuals with the levy and suggested a specific amount transferred electronically to mitigate public apprehensions amid rising living costs.

Highlighting a misalignment with fiscal policy objectives, the NESG urged for deferment of the levy pending consultation with the Presidential Committee on Fiscal Policy and Tax Reforms. The group emphasized the need to streamline taxes and levies to avoid policy conflicts.

Moreover, the NESG underscored how the levy would compound the already high banking transaction costs, potentially eroding public trust in the financial system. With concerns over fairness, transparency, and accountability, the group recommended reducing banking transaction costs to incentivize Nigerians to embrace financial services and deter reliance on cash transactions.

In response to mounting opposition, the House of Representatives instructed the Central Bank of Nigeria (CBN) to halt the levy’s implementation, citing misinterpretation of the Cybercrime Act. The House called for clarity through a revised circular from the CBN to address ambiguity surrounding the levy.

The NESG’s stance reflects broader apprehensions within Nigeria’s economic landscape, emphasizing the delicate balance between cybersecurity measures and financial inclusion imperatives amidst evolving regulatory frameworks.

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