By Kenechukwu Aguolu FCA, PMP, CBAP

President Bola Ahmed Tinubu has directed the Central Bank of Nigeria to suspend the implementation of the Cyber Security Levy. The decision was made due to widespread signs of resentment. Here we shall examine the National Cyber Security Fund, the Cyber Security levy, and the arguments for and against its implementation.

In 2015, Nigeria took a significant step forward in combating cyber threats with the enactment of the Cybercrime Act. This legislation established a cybersecurity fund to finance diverse initiatives aimed at bolstering Nigeria’s cybersecurity infrastructure. Additionally, the Act introduced a cybersecurity levy on the total value of electronic transactions to serve as a financial source for the fund. Alongside the levy, the Act outlined the following alternative funding sources to enhance Nigeria’s cyber defences:

Grants-in-aid and assistance from donor, bilateral, and multilateral agencies;

All other sums accruing to the Fund by way of gifts, endowments, bequest or other voluntary contributions by persons and organisations: Provided that the terms and conditions attached to such gifts, endowments, bequest or contributions will not jeopardise the functions of the Agency;

Such monies as may be appropriated for the Fund by the National Assembly; and

All other monies or assets that may, from time to time accrue to the Fund.

The Amendment of 2024:  These amendments were made to eliminate ambiguities and strengthen cybersecurity provisions. The amended act established a clear framework for the cybersecurity levy, setting it at 0.5% of the value of electronic transactions. The Central Bank of Nigeria directed financial institutions to start deducting the levy on May 20, 2024. This directive sparked public discourse with many people scrutinizing and debating its potential impact on Nigerian society.

However, according to the Central Bank of Nigeria, the following transactions are exempted from the levy:

Loan disbursements and repayments

Salary payments

Intra-account transfers within the same bank or between different banks for the same customer

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

Savings and deposits, including transactions involving long-term investments such as Treasury Bills, Bonds, and Commercial Papers.

Government Social Welfare Programmes transactions e.g. Pension payments

Non-profit and charitable transactions, including donations to registered non-profit organizations or charities

Educational institutions’ transactions, including tuition payments and other transactions involving schools, universities, or other educational institutions

Transactions involving bank’s internal accounts such as suspense accounts, clearing accounts, profit and loss accounts, inter-branch accounts, reserve accounts, nostro and vostro accounts, and escrow accounts.

Arguments for the Levy:

Simplicity and Administration Ease: A flat levy is easy to administer, reducing bureaucratic hurdles and ensuring efficient collection of funds. This streamlines the process for both government agencies and businesses, allowing resources to be allocated more effectively towards cybersecurity initiatives.

Promotion of Financial Inclusion: A flat levy is preferable over a progressive rate as it doesn’t discourage individuals from engaging in large-value electronic transactions. This, in turn, supports financial inclusion by ensuring that people from all income brackets can participate in the formal financial system without facing additional barriers. Moreover, a more secure cyberspace fosters confidence in the Nigerian financial system, encouraging greater participation and trust.

Cybersecurity Enhancement: The funds generated from the levy are essential for strengthening Nigeria’s cybersecurity defences. Combatting cybercrime, protecting sensitive data, and safeguarding critical infrastructure requires substantial resources. By supporting initiatives like establishing counter-violent extremism cybersecurity research centers and promoting graduate traineeships in cybersecurity, the levy can help develop a skilled workforce and address emerging cyber threats effectively.

Arguments Against the Levy:

Impact on Low-Income Earners: Critics express concerns about the levy’s potential burden on low-income earners. The additional financial strain on vulnerable segments of society could exacerbate existing socioeconomic disparities, making it harder for them to access financial services and participate in the economy.

Timing and Economic Challenges: Introducing the levy during economic challenges may further burden businesses and consumers. Some fear the increased business costs would be passed on to consumers, contributing to inflationary pressures and hindering economic recovery efforts.

Need for Balancing: Critics have emphasised the importance of balancing cybersecurity priorities with socioeconomic realities. Although cybersecurity is undoubtedly crucial, policies must consider their potential socioeconomic impact; taking into account the needs of low-income earners and the broader economic context.

Furthermore, effective implementation of the cybersecurity levy hinges on robust oversight mechanisms and transparent management of the cybersecurity fund. Following the Cybercrime Act, the fund is domiciled with the Central Bank of Nigeria, with the Office of the National Security Adviser tasked with administration, keeping records of accounts, and compliance monitoring. Furthermore, stringent auditing protocols outlined by the Auditor General of the Federation ensure accountability and transparency in fund utilisation.

As Nigeria confronts the challenges of its cybersecurity landscape, the debate surrounding the cybersecurity levy underscores the delicate balance between security imperatives and socioeconomic equity. While the levy holds promise in strengthening Nigeria’s cyber defenses, it is imperative to navigate its potential impact on the average Nigerian carefully. Thus, the development of effective policies to safeguard Nigeria’s digital future requires ongoing dialogue, stakeholder engagement, and robust oversight to uphold principles of fairness and inclusivity. Through these concerted efforts, Nigeria can forge a path towards a resilient and secure digital ecosystem for all.

Kenechukwu is a Finance Expert, Business Analyst and Project Manager based in Abuja, Nigeria. He can be reached on +2347062136241

Joel Oladele, Abuja

Since 1960, October 1 has remained and will continue to be a significant day in the history of Nigeria. It represents the day the most populous black nation gained independence from British colonialism.

Nigerians since then have set aside the day to celebrate the liberty of their sovereign nation, earned through selfless sacrifices of many heroes past.

Like the biblical Israelites, the country has left Egypt but seems not arrived at its promised land as it has been wandering in the wilderness full of various challenges. Top on the list of such challenges is insecurity.

Well-meaning Nigerians have been gravely concerned about the issue of insecurity in the country as they keep wondering how we arrived at this level, where no one is safe and efforts by different administrations to put a stop to the ugly trend has not yielded any significant result, rather it seems escalating and now totally out of control.

None among the six geo-political zones in the country is spared as they all contend with one form or multiple forms of insecurity.

The security challenges that cut across the nation include, cybercrime, armed robbery, kidnapping, extrajudicial killings, herder-farmer conflicts, ritual killings, banditry, secessionist agitation, attacks by unknown gunmen, militancy, Boko Haram insurgency, the Islamic State in West Africa Province, ethno-religious killings among others.

These have led to loss of thousands of lives, extensive damage and loss of property.

According to the Global Terrorism Index (GTI), Nigeria (8.065) is currently the 8th most terrorised country among 163 nations in the world. Even Myanmar (7.977) and the Niger Republic (7.616) fared better than Nigeria in the GTI.

Nigeria was better than Afghanistan (8.822), Burkina Faso (8.564), Somalia (8.463), Mali (8.412), Syria (8.161), Pakistan (8.16) and Iraq (8.139).

GTI is a composite measurement made up of four indicators: incidents, fatalities, injuries and hostages. To measure the impact of terrorism, a five-year weighted average is applied.

No doubt, a more holistic approach is required to address the root causes of conflicts and agitations in the country.

In his inaugural speech, President Tinubu promised to make security a top priority because development could not take place without it.

“Security shall be the top priority of our administration because neither prosperity nor justice can prevail amidst insecurity and violence. To effectively tackle this menace, we shall reform both our security doctrine and its architecture.

“We shall invest more in our security personnel, and this means more than an increase in number. We shall provide better training, equipment, pay and firepower,” the President vowed.

As part of efforts to fulfill the promise made, President Tinubu, on June 1, ordered Service Chiefs and heads of security and intelligence agencies to crush criminals and anyone involved in oil theft, saying that his administration would not tolerate criminality.

He stated this in his maiden official meeting with Security and intelligence heads led by the Chief of Defence Staff, General Lucky Irabor at the Presidential Villa, Abuja.

Before Tinubu took over, insecurity had claimed 98,112 lives in 12 years; 27,311 persons under the watch of former President Buhari in his first term; and 35,900 persons between 2019 and May 29, 2023.

To put a stop to this, the President Tinubu said he was going to embark on a lot of reforms in terms of security architecture, and mandated the security agencies to come up with a blueprint, and redouble their efforts because, as far as he is concerned “this country should not be on its knees struggling while other countries are working and achieving greater heights.”

Although there seems to be an improvement in the war against insecurity since President Bola Tinubu took over on May 29, 2023, many parts of Nigeria are still killing fields as bandits, terrorists, gunmen, armed herders, criminals and insurgents unleash terror and mayhem on hapless citizens killing and kidnapping for ransom and rituals.

According to Nigeria Security Tracker(NST), a project of the Council on Foreign Relations’ Africa programme, as of August 29, no fewer than 1,406 Nigerians had been killed. These include 94 deaths recorded between May 29 and 31, 690 (June), 415 (July) and 207 (as of August 28).

The 1,406 deaths between May and August 2023 are fewer than the 2,897 recorded between June and August 2015 during the first 100 days of immediate past President Muhammadu Buhari administration.

The think tank states in its latest report titled ‘Understanding and Tackling Insecurity in Nigeria,’ which was released Monday, 7th November 2022, it stated that

“To overcome the widespread and growing insecurity within Nigeria’s borders, current military engagements should be sustained.

“But the nature, pattern and trend of security challenges confronting Nigeria cannot be dealt with efficiently using military power alone.

“Addressing only the manifestations of insecurity without tackling its drivers is akin to merely cutting off the tail of a dangerous snake while keeping intact its head and the rest of its body,” the report noted.

Allowing the prevailing security challenges to fester will hasten Nigeria’s slide to the league of failed states similar to the circumstances in Iraq and Syria.

Put together by a team of security experts, including those with service experience within and outside the country, the think tank report analysed the types as well as the drivers and manifestations of insecurity in Nigeria, if the recommendations from the report is duly followed, insecurity challenges in Nigeria might become a thing of the past.

Following from this, the report made short-, medium- and long-term recommendations on how to address the growing scourge which, it says, negatively impacts not just security of life and property in the country but also national cohesion, the capacity and the credibility of the state, economic growth, commerce, food production and education.

“Insecurity in Nigeria is multi-dimensional, as such, for any attempt at addressing the growing menace to be effective and sustainable, it needs to be holistic, deftly combining ‘hard’, military solutions with ‘soft’ approaches aimed at tackling the socio-economic underpinnings of conflict and crime. Insecurity does not thrive in a vacuum. Some factors are precursory to it. These are the environmental conditions that both kindle and nurture insecurity.”

Part of the drivers of insecurity in Nigeria includes as identified by experts are: Ineffective and inadequate security architecture, ineffective and insufficient criminal justice system, easy access to small arms and light weapons, the existence of porous borders, easy access to illicit drugs, prevalence of poverty and unemployment, impact of climate change, multiplication of unaddressed socio-political and economic grievances, poor land use policies, agitations over resource control, and failure to address structural and constitutional deficiencies.

To address the socio-economic underpinnings of conflicts and crimes, the report recommends a host of interventions. These include: reviewing the Land Use Act and other extant laws, providing targeted education and skills training to youths in conflict areas, prioritising dialogue and alternative conflict resolution mechanisms, strengthening legislative and judicial responses to ensure quick dispensation of justice, embracing the use of strategic communications to win the hearts and minds of the populace, addressing abuses by the security forces, controlling access to arms and drugs, and embracing a national healing process and ensuring reparations for victims of conflicts and abuses.

“The current security architecture of Nigeria may have once been effective in tackling the challenges at their time of institution,” the report states.

“However, the challenges across the country have evolved significantly. There are new domains of security threats, while smaller and largely benign groups have evolved into well-armed transnational insurgent groups.

“This means the security and defence structures that worked in prior dispensations are currently struggling to keep up with the evolved challenges. The need for a defence and security sector reform is imperative.”

According to the report, such a reform should start with a comprehensive and consultative audit of the missions, doctrines, training and staffing of all the military, paramilitary and other security forces and agencies in the country to ensure an alignment with current and future security threats.

The result of the audit, the report adds, should provide a guide to how to better streamline, resource, staff and coordinate security agencies in the country.

The outcome of the comprehensive reform should incorporate mechanisms for significant boost in the number of security personnel, increased focus on accountability, more respect for rules of engagement and monitoring and evaluation, and greater coordination of intelligence gathering and usage.

It also recommended the mop up and control of the flow of small arms and light weapons, recruitment of more women in the security forces and introduction of more gender-sensitive policies, regulation of irregular security outfits across the country, and the introduction of a dedicated border patrol force to contain the unchecked flow of arms and terrorists/bandits across the country’s extensive borders.

“We recommend the creation of a border guard force focused on providing border security, as the  current role is being performed by the Nigerian Customs Service which considers border security a secondary priority to its primary focus of revenue generation,” the report stated.

“Nigeria can look at examples such as the Border Security Force and the Frontier Force in India, the Pakistan Rangers in Pakistan, and the Border Security Agency in Malaysia, among others.”

Part of its recommendations was the use of private security contractors but in a specified and controlled manner.

“It is a known fact that Nigeria’s security personnel are overstretched due to the persistent and widespread nature of current security challenges. This deficiency has allowed insecurity to fester.

“To relieve the security forces and to enable significant efforts to be applied to degrade the threats, the government should consider inviting private security contractors as it was done shortly before the general election in 2015 and use them to confront armed banditry in the North-west and North-central regions.

“The engagement should be handled through the security forces to assuage concerns in some quarters that the private military contractors are an indication of the non-appreciation by the political class of the security forces’ contribution and sacrifice. Clear objectives and measurement parameters should be set and monitored closely.”

As Nigeria celebrate another Independence Day, the citizens are patiently waiting to see how the approach of President Bola Tinubu could transform the security architecture of the country, such that the country can yet again enjoy those good old days where people could travel any time of the day without the fear of kidnappers, terrorists, armed rubbers among others.

Days when citizens could leave their doors open and sleep peacefully with their two eyes closed without the fear of thieves breaking into their homes.

O God of creation, direct our noble cause, guide our leaders right…

As Nigeria marks her 63rd Independence Anniversary on Sunday, Lagos State Governor, Mr. Babajide Sanwo-Olu, has urged Nigerians at home and in the diaspora to support the administration of President Bola Tinubu and all state governments in their efforts to birth a new, prosperous Nigeria.

The Governor also implored Nigerians to continue to live with one another in love, unity and peace, irrespective of their religious or ethnic differences, adding that all the citizens’ support and encouragement are key for a better and prosperous Nigeria.

Governor Sanwo-Olu in a statement issued on Saturday by his Chief Press Secretary, Mr. Gboyega Akosile on the 63rd Independence Anniversary, said Nigerians should unite with renewed determination, hope and commitment to move the country forward against all odds, saying President Tinubu and all the 36 State Governors are committed to addressing different challenges currently being experienced across the country.

“Every October 1st is a time to reflect on the journey of our nationhood, to rededicate ourselves to the task of nation-building, and continue to work hard at building a formidable nation in Africa and the world at large.

“I wish to pay tribute to all of our heroes, past and present, founding fathers, nationalists and those who have laboured and sacrificed and all that continue to labour and sacrifice for peace, unity, growth and development of our country.

“As we celebrate our 63rd Independence Anniversary, I appeal to all Nigerians, particularly Lagos residents, to unite with renewed determination and commitment to move Nigeria and Lagos State forward against all odds. Let us continue to work together for peace in our dear Lagos State and Nigeria. Let us support President Bola Tinubu’s government to achieve his Renewed Hope agenda. Let our diversity be a source of strength and not a factor of disintegration.

“I want to use this medium to reassure Lagos residents of our administration’s commitment to the delivery of dividends of democracy, good governance and people-oriented programmes through the THEMES+ developmental agenda for Greater Lagos. We need continuous support from the people for us to achieve the Lagos of our dreams.

“I wish all Lagosians and Nigerians a Happy 63rd Independence Anniversary. May the labour of our heroes past and present never be in vain,” Governor Sanwo-Olu prayed.