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SERAP, BudgIT, 136 Nigerians drag CBN to court over cybersecurity levy

Socio-Economic Rights and Accountability Project (SERAP), BudgIT and 136 concerned Nigerians have filed a lawsuit against the Central Bank of Nigeria (CBN) “over its failure to withdraw the patently unlawful ‘Circular’ directing all banks and other financial institutions to deduct from customers’ account a ‘cybersecurity levy’.”

The CBN had last week directed banks to implement a levy of 0.5% (0.005) equivalent to a half percent of all electronic transactions, and to remit the levy to the ‘national cybersecurity fund.’ The CBN relied on the Cybercrime Act 2015 [as amended]. The directive is to be implemented by Monday, May 20, 2024.

In the suit number FHC/L/CS/822/2024 filed last Friday at the Federal High Court, Lagos, the Plaintiffs are asking the court to determine “whether the CBN Circular dated 6th May 2024, directing financial institutions to deduct from customers’ accounts a cybersecurity levy is unlawful and therefore ultra vires the CBN.”

The Plaintiffs are also asking the court to determine “whether the CBN Circular dated 6th May 2024, directing financial institutions to deduct from customers’ accounts a cybersecurity levy and section 44(2)(a) of the Cybercrimes Act are not in breach of sections 14(2), 44(1) and 162(1) of the Nigerian Constitution 1999 [as amended], and therefore unconstitutional, null, and void.”

The Plaintiffs are asking the court for “a declaration that the CBN Circular dated 6th May 2024 directing all banks and other financial institutions to deduct from customers’ accounts a cybersecurity levy is contrary to the provisions of the Cybercrimes Act and ultra vires the CBN, and therefore is illegal null and void.”

The Plaintiffs are seeking “an order of interim injunction restraining the CBN, its office, agents, privies, assigns, or any other persons acting on its instructions from enforcing the Circular dated 6th May 2024, pending the hearing and determination of the motion on notice filed contemporaneously in this suit.”

The suit filed on behalf of the Plaintiffs by their lawyer Ebun-Olu Adegboruwa, SAN, read in part: “The CBN Circular is unlawful and an outright violation of the provisions of the Nigerian Constitution and the country’s international obligations.”

“Unless the reliefs sought are granted, the CBN will enforce its Circular directing banks to deduct from customers’ accounts a cybersecurity levy. Millions of Nigerians with active bank accounts would suffer irreparable damage from the unlawful deduction of cybersecurity levies from their accounts.”

“The provisions of the Cybercrimes Act on payment of cybersecurity levy strictly apply only to businesses listed in the Second Schedule to the Act. These provisions make no reference to bank customers, contrary to the CBN Circular to all banks and other financial institutions.”