NFIU Bans Cash Spenders From Govt Accounts; Queries N701bn Deals

  • Cautions massive withdrawals threatening national security, financial liquidity

BY COBHAM NSA – Alarmed by the huge cash that exits the government’s accounts on a daily basis, the Nigeria Financial Intelligence Unit (NFIU) has announced an immediate ban on cash withdrawals from accounts belonging to the Federal Government, its agencies, and parastatals.

Also not spared by the clamp-down are State and Local governments as the NFIU cautioned that unrestricted massive cash transactions by public and private entities are seriously constituting security threats and financial liquidity challenges in the country.

And to ensure compliance with the new financial directives, the Director and Chief Executive Officer of NFIU, Mallam Modibbo Hamman Tukur, said all Federal Ministries, Departments and Agencies (MDAs), State Governments, Local Government Councils, corporate bodies, and civil servants, as well as public and private officials, must urgently embrace the cashless policy of money transactions in order to strengthen national security.

Mallam Tukur said with a total cash withdrawal of over 701 billion Naira from 2015 to date, the order becomes necessary to check the alarming rate by which monies are taken out of public accounts without recourse to the money laundering laws and sometimes for corruption purposes.

Giving the breakdown of the N701 billion cash transactions, the NFIU Chief Executive said the three tiers of government, the Federal, the 36 States, and the 774 Local Government Councils made cash withdrawals of about N200 billion, N156 billion, and N120 billion, respectively, within the period under review.

Tukur said to curb these excesses, the Federal Government has instructed all financial institutions to stop “direct cash withdrawals by public institutions and officers” from government accounts from March 1, 2023, adding that any government official who flouts the order will be prosecuted alongside his or her accomplices.

The NFIU boss, who explained that this move tallies with the country’s resolve to fully transit into a cashless economy as being championed by the Central Bank of Nigeria (CBN), said all banks and government agencies at all levels have been directed to move fully online, as all transactions involving public money must be routed through the banks for the purpose of accountability and transparency.

According to Tukur; “As far as we are concerned, Nigeria will become a full non-cash economy by March 1 this year. As a consequence, any government official that withdraws even one naira cash from any public account from March 1 will be investigated and prosecuted in collaboration with relevant agencies like EFCC and ICPC.”

Warning that the new directive “is not reversible as we (NFIU) are only enforcing the law”, the statement by Tukur said the measures are; “In compliance with its statutory responsibility under Section 3(1) a – s and Section 23 (2) (a) of the NFIU Act, 2018, and other provisions under the Money Laundering (Prevention and Prohibition) Act, 2022 (MLPPA, 2022), the Nigerian Financial Intelligence Unit (NFIU) hereby provides the following Guidelines for compliance by all Financial Institutions, Non-Financial Institutions, and public officials in Nigeria”.

The NFIU Chief Executive, who also urged all stakeholders to adopt new technologies of financial transactions and adhere to the CBN’s prescribed withdrawal limits or thresholds for corporate and individual transactions, said no infractions have been recorded so far but admitted that cash withdrawals were still higher than deposits.

However, while stressing that any cash withdrawal beyond the approved limit would trigger a red flag by the relevant anti-graft agencies, Tukur further explained that anyone with a genuine need for huge cash transactions would seek presidential approval as there is currently no “standing waiver” on the policy.

Tukur insisted there would be no sacred cow and flouting the regulation under the excuse of government exigencies and other matters would not be condoned, noting however that only the President has the power to grant any waiver to any official or officials.

Further explaining possible exceptions to the guidelines, the NFIU Chief Executive said; “There is nothing in these guidelines to suggest or indicate there is reason to compel or warrant a public official at federal, state, and local government to go to a financial institution to withdraw cash.

“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. Under no circumstance, shall any category of public officers be given a standing or continuous waiver to withdraw cash from any public account in any financial institution or designated non-financial institution”.

The statement also addressed the likely effect of the new directives on the anti-corruption fight and audit trail by the government, saying; “Although this guideline is meant to enforce the provisions of Sections 2 and 13 of MLPPA, 2022, to discontinue cash withdrawal from public accounts and establish a clear audit trail, and mitigate corruption and other vices in public expenditure; it is also aimed at supporting law enforcement and the entire criminal justice system by strengthening transparency in the investigation.”

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