The Central Bank of Nigeria (CBN) has withdrawn its earlier circular directing banks to implement a controversial 0.5% cybersecurity levy on electronic transactions.

The decision of the apex bank to withdraw the circular followed the public outrage that trailed the announcement of the policy two weeks ago and the suspension of the levy by the Federal Government last week.

The CBN in its latest circular dated May 17, 2024, referred to the earlier May 6, 2024 circular and advised financial institutions that the initial circular on implementing the cybersecurity levy “is hereby withdrawn”.

The CBN’s latest circular was co-signed by its Director of Payments System Management Department, Chibuzo Efobi; and his counterpart at the Financial Policy and Regulation Department, Haruna Mustafa.

In its initial circular dated May 6, 2024, addressed to all deposit money banks, mobile money operators, and payment service providers, the apex bank directed the deduction of the levy to be remitted to the National Cybersecurity Fund (NCF), administered by the Office of the National Security Adviser (ONSA).

The development sparked wild outcries with labour unions threatening actions and pressure groups faulting the timing of the levy implementation amidst the cost of living crisis exacerbated by rising inflation.

The Federal Government subsequently suspended the controversial cybersecurity levy on May 14, 2024.