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Business News of Sunday, 8 January 2023


Why cash withdrawal from government account will be barred from March 1st

Cash Cash

Nigerian Financial Intelligence Unit (NFIU) has stated that cash withdrawal from government accounts will be barred from March 1st.

In a statement signed by Modibbo Hamman-Tukur, NFIU Director/CEO, it stated that this will help to tackle illicit activities as well as a push towards a cashless economy at the federal, state, and local government level and their agencies.

It added that the payment of estacodes and overseas allowances to civil and public servants in cash is also prohibited.

The new rules: In addition to combating money laundering and corruption, NFIU says the new will help the country shift toward a cashless economy.

 “The NFIU noticed in the process of its financial transactions analysis that civil servants are becoming more and more vulnerable to money laundering and its predicate offenses due to their exposure to cash withdrawals from public accounts.
In its analysis, NFIU stated that between the period 2015 to 2022 (Annex 1), the Federal Government withdrew N225.72 billion cash, State Governments withdrew N701.54 billion cash, and Local Governments withdrew N156.76 billion cash.
It added that the cash withdrawals directly contravene the provisions of the MLPPA, 2022, and the Proceeds of Crime (Recovery and Management) Act, 2022 (POCA, 2022) which provide the legal framework setting limitations on cash transactions and sanctions for infringement of the provisions.

The exception to the rule: It, however, stated that any public official who necessarily needs cash withdrawal would need to apply for waiver approval from the office of the president.

It stated, “In the unlikely event that a public official feels he may need cash withdrawal, he may apply for approval for a waiver from the Presidency which may be granted on a case-by-case basis.”
Other affected accounts: The new guidelines include all foreign Missions operating in Nigeria and accounts of all development partner institutions as well as accounts of all instituted funds in form of independent funds to be operated as mutual funds such as insurance funds, cooperative funds, brokerages funds, political party funds or pressure group/union funds.

Sanction: NFIU stressed that any individual or corporate body that violates the provisions of these Guidelines and their attendant principles and interpretations will be liable to necessary prosecution and penalties from the effective said date.

“Cash withdrawals from public accounts would be treated as a money laundering offense. Also, it is hereby provided that any public officer or any citizen who comes into contact with the provisions of these Guidelines with its attendant principles shall as a matter of obligation promote the implementation and success of the Guidelines,” it noted.