Funding Cybersecurity For Economic Prosperity
In today’s digital age, where economic activities are increasingly reliant on interconnected networks and data flows, cybersecurity stands as the bedrock of economic prosperity. Cybersecurity breaches have evolved from isolated incidents to systemic threats capable of disrupting entire economies.
The economic consequences of cyber attacks extend far beyond immediate financial losses. They erode consumer trust, damage brand reputation, and incur long-term operational costs. Moreover, in sectors such as finance, healthcare, and critical infrastructure, the impact of cyber attacks can be catastrophic, jeopardising not only economic stability but also public safety.
Cyber attacks
Technology experts have predicted that there would be more online financial crimes and cyber attacks on businesses. They said the menace would be more fatal than other insecurity in 2024 as many companies may lose their finance to cyber criminals. Robust information and communication technology (ICT) systems are critical for preventing and investigating financial crimes or mitigating the risks associated with virtual assets in financial markets.
These systems facilitate compliance with established standards or regulations. They also provide a platform that allows the monitoring, tracing, and analysing of digital transactions in real-time. ICT systems support secure data storage and encryption technologies, which are critical for safeguarding sensitive financial data. The emergence of digital banking has led to the proliferation of financial crimes especially in terms of e-fraud.
According to the Executive Vice Chairman/Chief Executive Officer of the Nigerian Communications Commission (NCC), Dr. Aminu Maida, financial crimes refer to criminal activities that involve transactions, abuse, misuse, deception, or manipulation of financial systems for personal gain. He added that they included a wide range of offenses such as insider abuse, money laundering, terrorism financing, proliferation financing, embezzlement, Fraud (e-fraud, banking, securities, corporate, intellectual property), etc.
“These crimes do not only have a huge economic and social impact but can also be linked to violent crimes that lead to loss of lives. These crimes threaten the integrity, trustworthiness, stability, security, safety, and future of an entity (country, enterprise, individual),” he stated.
Funding
Effective cybersecurity requires a multi-faceted approach, encompassing technological innovation, talent development, regulatory compliance, and international cooperation. However, these endeavours demand significant financial investment. Funding cybersecurity is not only a matter of protecting digital assets but also safeguarding economic prosperity and societal well-being.
It requires a strategic commitment from governments, businesses, and individuals to prioritise cybersecurity investment as a fundamental component of national and global agendas. By embracing the imperative of funding cybersecurity, the nation can fortify the foundations of its digital economies and pave the way for a safer and more prosperous future.
Funding cybersecurity initiatives is not merely an expense but an investment in safeguarding the foundation of economic growth and innovation. To secure this initiative, the Federal Government of Nigeria introduced a new policy by which cybersecurity will be funded by the public.
Cybersecurity charges
To ensure compliance with the Cybercrimes (Prohibition, Prevention, etc) (amendment) Act 2024, the Central Bank of Nigeria (CBN) directed financial institutions in the country to commence the deduction of a 0.005 per cent levy on electronic transactions for the National Cybersecurity Fund within the next two weeks.
According to the CBN, the deducted amount should be reflected in the customer’s account with the narration, “Cybersecurity levy.” In a circular to commercial, merchant, non-interest, and Payment Service Banks, mobile money operators, and payment service providers, posted on its website on Monday, the apex bank also directed that the levies collected in bulk should be remitted monthly to the National Cybersecurity Fund (NCF) account by the 5th business day of every subsequent month.
In addition, it directed that system reconfigurations towards ensuring complete and timely submission of remittance files to the Nigeria Interbank Settlement System (NIBSS), should be completed by commercial, merchant, non-interest, and Payment Service Banks and mobile money operators within the next four weeks, while other financial institutions-Micro-Finance Banks (MFBs), Primary Mortgage Banks (PMBs) and Development Finance Institutions) should complete theirs within the next eight weeks.
The CBN emphasised that the Act, “prescribes that failure to remit the levy is an offence and is liable on conviction to a fine of not less than 2% of the annual turnover of the defaulting businesses amongst others.” According to the apex bank, exemptions from the cybersecurity levy include loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, intrabank transfers between customers of the same bank, inter branch transfers within a bank, cheques clearing and settlement and Letters of Credit.
Also exempt are banks’ recapitalisation related funding, savings and deposits, including transactions involving long term investments such as Treasury Bills, Bonds and Commercial Papers, government social welfare programme transactions, as well as non profit and charitable transactions. New Telegraph reported that the CBN, had in a circular dated June 25, 2018, released guidelines for the collection of a 0.005 per cent levy on electronic transactions for the National Cybersecurity Fund.
Rejection
Due to the economic situation of the country, the general public went against the policy, urging the Apex Bank to reverse the policy. According to them, the CBN is adding another burden to their woes, noting that they already pay heavily on deposits and withdrawals. In addition to VAT, CoT, Stamp Duty, Electronic Transfer Charges, USSD charges including all the extras we are paying for electricity, DSTV, data.
Some of the cybersecurity experts, who spoke to New Telegraph, noted that the CBN did not spell out the purpose of the levy. “Though cybersecurity is very important the CBN should guarantee the bank customers the security of their money. It needs to explain to the layman why they should pay for cybersecurity.
People go against many of the government policies because they don’t know the benefits, they don’t see the benefits, and they don’t even feel the benefits. Before the introduction of any policy or initiative, the public must be first educated on its benefits but we don’t do that in Nigeria and that is why people always kick against any government policy,” Taofiq Olusanya, a banker said.
Key investment areas
According to the experts, there are key areas where the government needs to focus investment to fight against cyber attacks. The investment target must be on technology and infrastructure, research and development, and others.
Technology and Infrastructure
Investing in state-of-the-art cybersecurity technologies, such as artificial intelligence, machine learning, and advanced encryption, is crucial for detecting and mitigating evolving threats. Moreover, upgrading digital infrastructure to enhance resilience against cyber attacks is essential, especially as the Internet of Things (IoT) expands. Building a skilled cybersecurity workforce is paramount in addressing the growing talent gap. Funding initiatives for cybersecurity education, training, and workforce development programmes can cultivate the expertise needed to combat sophisticated cyber threats effectively.
Research and development
Encouraging research and development in cybersecurity is essential for fostering innovation and staying ahead of emerging threats. Public-private partnerships and government grants can incentivise collaboration between academia, industry, and government agencies to drive technological breakthroughs in cybersecurity.
Regulatory Compliance
Investing in compliance with cybersecurity regulations and standards not only mitigates legal and regulatory risks but also enhances overall cybersecurity posture. Organisations should allocate resources for continuous monitoring, assessment, and improvement of compliance frameworks.
International collaboration
Cyber threats transcend national borders, making international cooperation indispensable in addressing global cybersecurity challenges. Funding initiatives that promote information sharing, capacity building, and diplomatic efforts can strengthen cyber resilience on a global scale.
Challenges While funding cybersecurity is imperative, challenges such as competing budget priorities, resource constraints, and evolving threat landscapes must be addressed. However, viewing cybersecurity as an enabler rather than a cost center presents opportunities for innovation, economic growth, and competitive advantage.
Last line
While cybersecurity requires funding, the government needs to re-strategise funding sources that will be acceptable to the people while enlightening them on the need to seek such funds.
