Cybersecurity fees exemptions in Nigeria

The Central Bank of Nigeria recently released a circular stating that it will start charging cybersecurity fees on electronic transfers made by customers of banks, mobile money platforms and other financial institutions. The fee shall be 0.5 percent. Below we discussed the cybersecurity fees exemptions from electronic transfer in Nigeria. To begin, let's define the cybersecurity fee.

1. What's the cybersecurity fees?

Cybersecurity fees are charges on individual accounts for electronic transfer in a bank, mobile money operators, and other financial institutions. It is a compulsory charge instituted by the Central Bank of Nigeria based on the Nigeria Cybercrime (prohibition, prevention, etc) act 2015. The Bank has ordered a 0.5 percent to be collected by financial institutions (traditional and digital) to collect the money from their customer at source, that is, the sender.

This implies that as a customer is making an electronic transfer, a charge of 0.005 is made by the bank and the bank is expected to include it in the customer's bank statement stating the narration (remark, as used in some bank statements) as cybersecurity fee. The amount collected is transferred to the Nigeria Cybersecurity fund (NCF) and shall be managed by the Office of the National Security Adviser (ONSA).

2. Sixteen (16) exemptions to cybersecurity fees

In the guideline published by the Central Bank of Nigeria, the following electronic transfers are exempted from the cybersecurity fees.

Loan disbursements and payments
Salary payment
Intra-account transfer by a customer within the same bank or two banks
Intra-bank electronic transfer between two customers of the same banks
Other financial institutions instructions to their correspondence bank
Interbank placements
Bank’s transfers to CBN and vice versa
Inter branch transfer within a bank
Cheques clearing and settlements
Letter of Credits (LCs) of customers
Bank’s recapitalization related account. Only bulk fund movement from collection accounts.
Savings and deposits, as well as, transactions involving long term investment such as treasury bills, bonds, and commercial papers.
Government social welfare transactions for example pension payments.
Nonprofits and charitable transactions including donations to registered nonprofit organizations and charities
Educational institutions transactions such as tuition payments and other transactions involving schools, universities, or other educational institutions.
Transactions involving banks internal accounts such as suspense, clearing, profit and loss, interbank, reserves, escrow, nostro and vostro accounts.

3. How would cybersecurity fees be utilized

The cybersecurity fees will be used to fight cybercrime in Nigeria. Any activities prohibited by the National Cybercrime (prohibition, prevention, etc) Act of 2015 can be traced, investigated and dealt with. In addition, the Office of the National Security Adviser (ONSA) will have the necessary funds to employ and train public servants to deal with cybercrime issues as stipulated in the Act. As well as, employ foreign experts on cybercrime security.