According to the Central Bank of Nigeria (CBN) a cashless policy “sets a withdrawal limit of ₦500,000 cash weekly for individuals and ₦5m for corporate entities for over-the-counter withdrawals. A ₦100,000 per week and ₦20,000 were daily withdrawals on ATMs as of 2022. It is believed that the cashless policy has a significant socio-economic impact on the nation. While this assertion seems beneficial in part, the observable inadequate digital infrastructure may limit the efficacy of the cashless policy. Oftentimes, exploring a pilot project on a crucial policy such as a cashless policy could test the effect of the same concerning the public response while promoting economic growth.
The hard-to-reach regions with low socio-economic status, and limited to no digital and financial infrastructures seem to be disproportionately affected by the cashless policy. Putting salt on the injury, the corrupt POS operators take advantage of the arguable holes in the cashless policy. While the populace seems to be struggling with the effect of cashless policy gaps, the cybersecurity levy is being proposed.
The naira note redesign, although a good idea implemented at a questionable time which makes many believe same to be politically motivated shows a change in the colour of the note on the eve of the 2023 election season; the reduced access to funds, the menace, and extortion perpetrated by many PoS operators and corrupt bank officials in 2023 and other unpopular policies seem counterproductive as many were badly affected, infrastructured were vandalized, and lives were loss just to mention a few. In response to the unpopular policy, the recommendations of the then President-elect now President Tinubu and a selected meaningful technocrats helped manage the currency issue in 2023. At the time the deadline pegged for returning the old baura note was lifted – this eased the effect of the situation.
Now that the Cashless policy seems to be gaining traction with evidence of increased online banking transaction volume, the 2024 proposal and indeed enactment but suspended cybersecurity levy of 0.5 per cent of all electronic transactions is like taking 10 steps backward just after taking a two-step forward. In perspective, who on earth will part with the some of ₦5,000 for transferring the sum of ₦1m in the name of Cybersecurity Level. In retrospect, many will revert to moving cash around like before thus consequently hurting the economy through reduced naira purchasing power and loss of cashless policy gains in part. Although the current government seems to be making efforts to manage the heightened economic downturn, the implication of the dwindling Fx issues, PMS subsidy removal, the hike in power tariff and food insecurity just to mention a few are aching the purse and palm of many this time. Initiating this Cyberbersecury Levy although now susoender is an eyesore. The pulse of the populace who seem to be grubling with the current economic downturn should have been factored in before proposing any agenda that will dip into the citizen’s pockets.
No doubt, a cybersecurity levy of 0.5% of all transaction value raises a serious concern and is a form of crime against humanity. A risk for increased money laundry, increased cash in circulation and a potential crime rate at a peak if a cybersecurity levy of 0.5% is implemented. While cybersecurity is important, the banking industry should be responsible and liable for all transactions so long same is not carelessly initiated by the customers. Although the banks are making a lot of money through several banking products, an upscale model may be explored to offset the cost of promoting cybersecurity amongst other expenditures.
Unveiling several bank account types based on the service economic status, the needs and the choice of the customers should be considered if not already being explored. A type of account that caps transaction frequency – any further transaction would attract a fee. Other bank accounts tagged all-inclusive with unlimited transactions should come at a reasonable monthly fee. Student accounts should be accessible to students. Aged and market women account types should be available too etc. However, a monthly baking fee based on account type is recommended to apply accordingly. The fee could be used to offset banking management costs including but not limited to the purported cybersecurity. The government at all levels and the financial institutions’ regulatory body in their wisdom should ensure all financial institutions are held accountable for the seemingly guaranteed banking transactions.
Of note, the timely intervention of President Bola Tinubu in halting the implementation of the Cybersecurity levy is commendable. Alas! It is unclear if Apex Bank learnt a meaningful lesson from the unpopular policy implemented under the watch of financial institution bosses in recent times, particularly in the year 2023. The corrupt PoS and bank officials took advantage of the unpopular policy to milk the unsuspecting populace. To date, some PoS operators in connivance with corrupt bank officials make it difficult for individuals to access their funds at a reasonable cost in some regions.
While the Asiwaju, FG’s response by suspending the unpopular cybersecurity levy should be applauded, the said policy should have been well-thought-out before investing the taxpayer’s money in same. The question is who should be held accountable for this and related unpopular policies? Another pertinent question should the so-called Cybersecurity Levy of 0, 5% be suspended, reviewed or thrown into the dustbin? The onus is on the Apex Bank to prioritize focusing on the core responsibility of the Apex Bank, human capital and social development projects amongst others.
The voice of the concerned.
Dr. Taiwo O. Olubanwo writes from Regina, Canada.
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