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Online Fraud Drains Nigeria Over N500 billion in 7 years

Online Fraud Drains Nigeria Over N500 billion in 7 years

Nigeria may have lost over a whooping sum of N500 billion in 7 years on reported and unreported cases of online fraud/cybercrime across major sectors of the economy such as banking and telecommunication, CFAtech.ng investigations have shown.

Despite 2015 being an incredible year for cybersecurity in Nigeria, at the period when the the cybercrime bill was signed into law by erstwhile President Goodluck Jonathan. The implications of this to individuals and corporations are that cybercrime is believed to have been properly defined and legal consequences are attached to any defiance of this law.

In 2016 the federal government, reported that the estimated annual cost of cybercrime to Nigeria is 0.08 per cent of the country’s Gross Domestic Products (GDP), which represents about N127 billion.

While in 2015, a total of 3,500 attacks last year led to a loss of about $450 million which represented over 200 percent increase from 2015 to 2016.

With different reports majorly emanating from the CBN and other ministries, industry analysts believe that relevant stakeholders and agencies are yet to come with speed in handling threatening menace posed by cybercrimes.

“Global tracking of cyber-attacks indicate that Nigeria is among countries with high cases of software piracy, intellectual property theft and malware attacks.

The situation is a serious challenge to our resolve to take advantage of the enormous opportunities that Internet brings, while balancing and managing its associated risks,” National Security Adviser (NSA), Babagana Munguno (rtd) said in April 2016, during the inauguration of the Cybercrime Advisory Council, at the Office of NSA (ONSA

Although, in 2014 the Central Bank of Nigeria (CBN) had claimed that, there was a massive drop in fraud rate in Nigeria’s commercial banks from the N6.2 billion (in 2014) to about N2.3 billion in 2015, however, the banks have reportedly lost about N199 billion to cyber-crime alone between 2000 and 2014, according to CBN.

In 2013 Nigerian Inter-Bank Settlements Systems (NIBSS Plc) reported that Nigerian banks have lost a total of N159 billion to cybercrime between 2000 and the first quarter of 2013, of which more than average took place from 2010 when the internet was becoming a booming tool.

“2.4 per cent of banking revenue was lost to fraud cases, Deputy Governor, Financial Systems Stability, Central Bank of Nigeria, Adebayo Adelabu, said in June 2014, before NIBSS released figures.

According to 2013 Global Fraud Report, it was revealed that Africa retained its position as the region with the largest fraud cases, while sub-Saharan Africa maintained the unenviable position of the region with the most prevalent fraud problems (77 per cent) among the regions surveyed

Specifically and historically, it is on record that the CBN that the Nigerian banking sector lost more than £75 million through internet fraud in 2013, including the sum of £7.5 million Union Bank Plc lost to hackers

In an interview, Remi Afo, President Cybersecurity Association of Nigeria said a critical look at the situation at the moment shows that Nigeria is not in a safe condition, there are a whole of things that need to put in place.

Critical sectors in the Nigerian economy like telecom and banking can be shut down anytime from now considering the fact that Nigeria is not ready to properly overhaul and holistically tackle cybercrime, a trend that has gone sophisticated.

“We need a proper regulation, Nigeria has a cybercrime law but we need other laws such as the Data Protection Law. And these laws should be enforced in such a way that organisations would be more responsible in keeping data.

Meanwhile the figures that were released by the NSA was just a tip of the iceberg, we are loosing a lot of money.
There are series of unreported cases of cybercrime in Nigeria and that makes some organisations in Nigeria to be very irresponsible”.

He added that there is the need for proper governance, responsibility and compliance in tackling issues like cybercrime in Nigeria.

However, he declined to disclose some of the cyber-attacks that were not reported but insisted that there are lots of unreported cases.

“It is on record that there are some attacks that occurred in the telecommunication industry and lots of information stolen from the sector. Some banks have also been attacked but fail to report them, although they do report to CBN. It is these data that the CBN collates together and publish at the end of the year,” he said.

According to Minister of Communications Adebayo Shittu said Nigeria must influence her space, define her space and prepare adequately to defend it.

“We want to see not just a working technology and applications, but we want to be assured that such technologies are safe and used properly,” he said.