Report: Nigeria to Stop Cash Withdrawals From Government Accounts

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Report: Nigeria to Stop Cash Withdrawals From Government Accounts

From the start of March, Nigerian public officials will be barred from withdrawing cash from government bank accounts, the head of the Nigerian Financial Intelligence Unit reportedly said. Public officials that want to be exempted from this new regulation will have to obtain a waiver from the Nigerian Presidency.

Government Workers Vulnerable to Money Laundering

Nigerian government workers will be prohibited from drawing cash from government accounts starting on March 1, Modibbo R. Hamman Tukur, the head of the Nigerian Financial Intelligence Unit (NFIU), has said. The new rule, which reportedly applies to federal, local and state officials, seeks to tackle the high levels of corruption and money laundering in government.

In addition, a Reuters report said the new rule in is tandem with the Nigerian government's goal of achieving a cashless economy. The report also quotes Tukur explaining the reasons behind this decision. He said:

Civil servants are becoming more and more vulnerable to money laundering and its predicate offences due to their exposure to cash withdrawals from public accounts.

To support Tukur's assertions, the report said an analysis by NFIU -- an autonomous unit within the Central Bank of Nigeria (CBN) -- had shown that between 2015 and 2022 officials withdrew cash equivalent to $2.45 billion from government accounts. Most of the withdrawals were above the set limits, the report added.

The CBN’s New Payments System Blueprint

Meanwhile, in instances where cash is needed, Tukur said officials will have to apply for a waiver from the presidency. However, this may only be granted on a “case-by-case basis.”

In its recently unveiled Nigeria Payments System Vision 2025 document, the CBN said aims to “have a cashless and efficient electronic payment system” that supports financial services in all sectors by 2025. To help it achieve this, the CBN has instituted a number of reforms that include issuing newly designed naira banknotes and phasing out old ones.

The CBN has also imposed cash withdrawal limits for both corporate organizations and individuals. Recently, the bank also reportedly directed banks to stop over-the-counter cash withdrawals of the new banknotes.

Besides limiting the use of cash, the CBN is also seeking to boost the use of its flagging central bank digital currency. However, despite the several steps taken to make the CBDC attractive to users, Bitcoin.com News reported in October 2022 that many Nigerians had not embraced this.

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Source: Report: Nigeria to Stop Cash Withdrawals From Government Accounts