A broad alliance of Nigerian citizens and civil society organizations is mounting a legal challenge against the Central Bank of Nigeria’s (CBN) controversial cybersecurity levy on electronic transactions. The lawsuit, spearheaded by Socio-Economic Rights and Accountability Project (SERAP), a leading human rights group, BudgIT, a transparency advocacy organization, and joined by 136 concerned Nigerians, asserts that the levy is both illegal and unconstitutional.
Challenging the Levy’s Legality and Constitutionality:
The lawsuit centres on two primary arguments: that the CBN’s directive oversteps its authority and that the levy itself violates the Nigerian Constitution.
- Contravening the Cybercrime Act: The plaintiffs argue that the May 6th, 2024 CBN circular contradicts the Cybercrime Act. They point out that the Act clearly stipulates that the cybersecurity levy applies only to specific businesses outlined in its Second Schedule, not to everyday bank customers. The lawsuit contends that the CBN is misinterpreting or exceeding its legal authority by attempting to extend the levy to a broader population.
- Constitutional Violations: The lawsuit alleges that the levy violates several provisions of the Nigerian Constitution:
- Articles 14(2), 44(1), and 162(1): These articles address the government’s responsibility to ensure security and welfare but mandate that all revenue collected by the federal government be deposited into the Federation Account, not a separate fund managed by the National Security Adviser (NSA). The lawsuit argues that diverting these funds to the National Cybersecurity Fund bypasses established budgetary and oversight processes.
- Article 44: The levy is seen as an infringement on Nigerians’ fundamental right to property. By imposing a mandatory deduction on electronic transactions, the levy reduces the disposable income of citizens without their explicit consent.
Seeking Relief and Highlighting Potential Harm:
The lawsuit seeks a court injunction to prevent the CBN from enforcing the levy until a final judgment is reached. The plaintiffs argue that the levy unfairly burdens Nigerians already grappling with high electronic transaction fees, including transfer charges, stamp duty, and account maintenance costs. Additionally, the lawsuit emphasizes the potential for widespread financial hardship if the levy is deducted from the accounts of millions of Nigerians, many of whom are already struggling economically.
Context and Unresolved Issue:
- The CBN’s levy, set at a rate of 0.5% (0.005) of electronic transaction value, aims to generate funds for the National Cybersecurity Fund overseen by the NSA. The stated purpose is to bolster national defences against cyber threats. However, the lawsuit raises concerns about the transparency and accountability of this separate fund, which would be managed by the NSA rather than following the standard procedures for federal budgetary allocations.
- Despite President Tinubu’s reported request for the CBN to suspend the levy for review, the lawsuit continues to move forward. This suggests a lack of confidence that the CBN will address the legal and economic concerns raised by the plaintiffs.
A Looming Legal Battle:
The court date for the lawsuit remains undetermined. This legal challenge underscores concerns regarding the legality, transparency, and potential economic burden associated with the CBN’s cybersecurity levy. The outcome of the lawsuit could have significant implications for the future of cybersecurity funding in Nigeria and the balance between national security initiatives and the economic well-being of its citizens.
