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Independent AfricaNigerians criticize new levy on electronic banking transactions

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Nigerians criticize new levy on electronic banking transactions

Many Nigerians have expressed disapproval of the newly introduced levy on electronic banking transactions, fearing it will force them to revert to cash usage.

The Central Bank of Nigeria (CBN) has informed financial institutions that the 0.5% levy, aimed at bolstering cybersecurity measures, will be implemented in two weeks.

Amid Nigeria’s severe economic downturn, exacerbated by the levy, many citizens foresee added financial strain in meeting basic needs.

Dr. Abdulrazaq Fagge, an economics lecturer at Yusuf Maitama University, criticizes the government’s decision, anticipating adverse repercussions on the nation’s fragile economy.

According to him, burdening citizens with additional fees during economic hardship is unjustifiable and detrimental, particularly to small businesses.

He argues that banks, profiting substantially, should bear the levy rather than passing it on to individuals.

Local bread seller Abubakar Sheka vows to avoid electronic transactions once the levy is enforced on May 20, citing the undue burden on his meager income.

The Nigeria Labour Congress and Socio-Economic Rights and Accountability Project (SERAP) have both condemned the levy, with SERAP threatening legal action against the government.

The government has yet to respond to public outcry.

Public affairs analyst Habu Sani asserts that the levy contradicts the government’s cashless economy initiative, predicting a resurgence in cash transactions.

He warns of potential cash shortages if the government does not reconsider its decision.

In 2023, cash shortages plagued Nigeria following currency reforms by the CBN aimed at combating electoral fraud, prompting a shift towards mobile money usage.

While mobile payment services saw increased usage, digital penetration remains low due to inadequate mobile network coverage in rural areas and limited smartphone accessibility for many Nigerians.

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