Economy

Cash Transfer Levies: Federal Gov’t Generates ₦103.7 Billion

The Federal Government of Nigeria generated ₦103.7bn in revenue from the Electronic Money Transfer Levies (EMTL) during the first half of 2024, reflecting a 7.55% increase compared to the ₦96.44bn collected in the same period in 2023. This data, published by the Central Bank of Nigeria (CBN), underscores the growing adoption of digital payment platforms as more Nigerians and businesses shift to electronic banking solutions.

The EMT levy, introduced through the Finance Act 2020, amended the Stamp Duty Act to generate revenue from electronic funds transfers. The levy applies a one-time charge of ₦50 on electronic receipts or transfers of money amounting to ₦10,000 or more in any deposit money bank or financial institution.

In January 2024, EMTL revenue stood at ₦18.60bn, a decrease of 26.57% from ₦25.33bn in January 2023. However, February saw a 20.21% increase, with collections rising to ₦16.59bn from ₦13.80bn in February 2023. By March 2024, revenues jumped by 53.41% to ₦18.60bn, up from ₦12.13bn in the same period last year.

April 2024 recorded ₦15.37bn, a marginal increase of 1.85% compared to the ₦15.09bn collected in April 2023. May showed more robust growth, with earnings reaching ₦18.78bn, a 24.24% rise over the ₦15.12bn collected in May 2023. Although June 2024 experienced a slight dip, with ₦15.78bn collected, it still represented a 5.40% increase from ₦14.97bn in June 2023.

In addition to the growth in EMTL revenues, Nigeria’s e-payment transactions surged by 86.44% to ₦566.39tn in the first half of 2024, compared to ₦303.60tn in the same period in 2023, according to data from the Nigeria Inter-Bank Settlement System (NIBSS). The rise in digital transactions has been driven by the increased use of the NIBSS Instant Payment (NIP) platform, which was introduced in 2011 and enables real-time interbank transfers.

Nigerian banks have expanded access to the NIP platform via internet banking, mobile apps, USSD, ATMs, POS terminals, and traditional bank branches, encouraging the broader adoption of digital banking.

In 2023, electronic payment transactions reached an all-time high of ₦600tn, a 55% increase from ₦387tn in 2022. However, telecom operators in Africa, who are investing heavily in mobile money services, are grappling with significant fraud issues.

The Global System for Mobile Communications Association (GSMA) reported in its 2023 “State of the Industry Report on Mobile Money” that mobile money fraud in Africa exceeded $1bn, raising concerns that these security challenges could hinder further growth in the mobile money sector.