Cybersecurity Levy: An Insight into SERAP, BudgIT’s Lawsuit Against CBN

In a bold move aimed at protecting the rights of the Nigerian people, Socio-Economic Rights and Accountability Project (SERAP), alongside BudgIT and 136 concerned Nigerians, have taken a significant step by filing a lawsuit against the Central Bank of Nigeria (CBN) to halt the implementation of a proposed cybersecurity levy. This levy, which is intended to generate funds for enhancing cybersecurity measures in the country, has sparked controversy and concern among citizens and advocacy groups alike.

The Directive and Its Implications

The CBN, in a recent move, instructed banks to implement a levy equivalent to 0.5% of all electronic transactions, with the collected funds intended to be remitted to the ‘national cybersecurity fund.’ The basis for this directive lies in the Cybercrime Act of 2015, giving it a legal grounding. However, the decision has faced backlash from various quarters, leading to challenging the validity of this levy.

The Lawsuit and Its Objectives

In a lawsuit with the reference number FHC/L/CS/822/2024 filed at the Federal High Court, Lagos, the plaintiffs are seeking clarity on the legality of the CBN Circular dated 6th May 2024. The primary questions for the court to deliberate include the lawfulness of the cybersecurity levy directive and its alignment with the Nigerian Constitution and international obligations. The lawsuit emphasizes the potential adverse effects on millions of bank customers if the levy is enforced without due legal consideration.

The Legal Argument

The crux of the matter lies in the interpretation of whether the CBN’s directive aligns with existing laws, especially the Cybercrimes Act of 2015, which primarily focuses on businesses listed in its Second Schedule. The contention arises from a perceived overreach in applying this levy to bank customers, a group not explicitly targeted by the Act. The plaintiffs argue that such a levy would not only contravene the Cybercrimes Act but also infringe upon constitutional rights, notably the right to property and the mandate for all government revenues to be paid into the Federation Account.

Implications for Nigerian Banking Customers

The potential implications of enforcing the CBN’s cybersecurity levy are vast, especially for everyday banking customers.

CBN Headquaters, Abuja

With existing charges for electronic transactions already in place, the additional imposition of this levy could result in further financial burden on account holders. This situation necessitates a careful examination of the legal grounds and implications surrounding such directives to safeguard the rights and interests of the Nigerian populace.

Impact on the Nigerian Economy

If the cybersecurity levy is implemented as planned, it could have far-reaching implications for the Nigerian economy. Businesses, especially small and medium-sized enterprises, would be affected by the additional financial burden imposed by the levy. This could lead to a slowdown in economic growth and hinder the development of the country’s digital infrastructure. Furthermore, there are concerns that the lack of clear guidelines on how the funds generated by the levy would be used could result in mismanagement and corruption. This could erode trust in the financial system and deter foreign investment in Nigeria, ultimately harming the country’s economic prospects.

Conclusion

The lawsuit filed by SERAP, BudgIT, and other concerned Nigerians against the CBN’s proposed cybersecurity levy highlights the importance of holding government institutions accountable and protecting the rights of the people. By challenging the legality and necessity of the levy, these organizations and individuals are advocating for transparency, accountability, and good governance in Nigeria. This legal challenge serves as a testament to the vigilance required to safeguard the rights and interests of Nigerian citizens in the face of potentially overreaching directives. As the legal battle unfolds in the Federal High Court, the outcome of this lawsuit holds significant implications for banking regulations and the protection of individual rights in Nigeria.

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