The Nigerian Financial and Intelligence Unit (NFIU) has unveiled plan to make the nation cashless beginning from March 1, 2023 and therefore barred governments from withdrawing cash.
NFIU said on Thursday that cash withdrawals from all government accounts effective March 1, 2023 would attract three-year jail term.
The NFIU, declared said that cash transactions would now be done electronically in line with the Central Bank of Nigeria (CBN) monetary policy.
It said defaulters who fail to heed the cash restriction order on public accounts risks collaborative investigation by the Nigeria Financial Intelligence Unit (NFIU), Economic and Financial Crimes Commission (EFCC) and Independent Corrupt Practices Commission (ICPC).
The Director and Chief Executive Officer, NFIU, Mr Modibbo Tukur, who confirmed the latest development in Abuja said defaulters risk spending three years behind bars.
“The NFIU had told banks and government agencies at all levels to go fully digital by moving online, as all transactions involving public money must be routed through the banks for the purpose of accountability and transparency.
“This is not reversible as we are only enforcing the law. As far as we are concerned, Nigeria will become a full non-cash economy by March 1, 2023 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, ICPC and the NPF,” he said.
Tukur clarified that under the guidelines, only the President can give a waiver for any cash above the approved daily threshold to be withdrawn for urgent or emergency reasons.
He said despite the introduction of the cash withdrawal limits in the country, state governments withdraw a total of N701 billion cash above the N225 billion withdrawn by the Federal Government and N156 billion withdrawn by the local governments in the country, bringing total public sector cash withdrawals between 2015 to date to N1.082trillion.
“With some states withdrawing up to N24 billion and then we also discovered that the Federal Government withdrew in cash up to N225 billion while the local governments withdrew up to N156 billion.
“So if we are to apply the law here, all the public servants involved in this withdraws are entitled to three years imprisonment. That’s what the law said,” he said.
The NFIU therefore directed federal, state and local governments in the country to put necessary measures in place to ensure the smooth operationalisation of the new policy.
He advised the different tiers of government in particular, to deploy technology and train their staff to be able to apply the new policy from the stipulated date.
“With the implementation of this guideline, Nigeria has been taken into a non-cash economy with effect from March 1, 2023.”
“The rate of withdrawals above the threshold from public accounts has been alarming, over N701 billion has been withdrawn in cash from 2015 till date. So you are all aware of the inflation in the economy, public servants traveling ,this and that, so the mark of withdrawing above the threshold is becoming very frequent.
“For government exigencies, only the President has the power to grant any waiver to any government official considering the importance of the situation; either for national security, health, or other important reasons.”
“From the first of March 2023. If there is any cash withdrawal, it is going to trigger off money laundering investigation in either EFCC ICPC, the Nigerian police, or all the law enforcement agencies, depending on the relevance of the withdrawal.
“So it’s also understood, the cash in the system is limited. But with this guideline, we expect that cash withdrawal from the system will go down by about N1 trillion Naira out of the N3 trillion cash that is in circulation on a weekly basis now.”
The Nigeria Financial Intelligence Unit (NFIU) has warned the public and private entities against massive cash withdrawals.
The Director and Chief Executive Officer of the agency, Mr Modibbo HammanTukur, gave the advisory in a statement made available to newsmen in Abuja on Thursday.
He spoke on the state of the nation’s security threats and financial liquidity.
HammanTukur advised all federal Ministries, Departments, parastatal Agencies (MDAs), State Governments, Local Government Councils, corporate bodies as well as, civil servants, public and private officers to embrace the cashless policy of money transactions to deepen national security.
This is to strengthen the country’s security and financial systems, he explained.
According to him, the Federal and State Governments as well as the 774 local government councils have made cash withdrawals of about N200 billion, N156 billion and N120 billion, respectively, from 2015 to date.
To curb this excesses, the Federal Government has directed and ordered the stoppage of “direct cash withdrawals by public institutions and officers” with effect from March 1, this year, HammanTukur stated.
He therefore advised all stakeholders to adopt new technologies of financial transactions and abide by the withdrawal limits or thresholds earlier prescribed by the Central Bank of Nigeria (CBN) for corporate and individual transactions.
It would be recalled that the CBN had in December 2022 prescribed a threshold of N5 million only for corporate accounts and N500,000 only for individuals per week.
HammanTukur however explained that no infractions have been recorded so far, but noted that cash withdrawals are still higher than deposits.
“Liquidity is needed to finance our markets”, he noted, adding that there is no threat to the corruption and money laundering crusade yet.
Besides, the director assured that any body with genuine need for huge cash transactions would seek presidential approval as there was no “standing waiver” on this policy.
While warning that the “guideline is not reversible”, he stressed that any cash withdrawal beyond the approved limit would trigger a red flag by the relevant anti-graft agencies.
He reasserted that Nigeria has been designated as a non-cash society by the World Bank, IMF and ECOWAS, among other stakeholders, with effect from March 1.
This is in addition to the categorisation of Nigeria as a “high risk” country by the concerned parties because of the enormous security challenges facing the nation, HammanTukur said.
“We can’t flow with politicians” because of obvious complications, while the set March 1 deadline was sacrosanct, according to him.
He however expressed optimism that the cash transactions would drop from the current N3 trillion to about N1 trillion when the policy became effective.
The NFIU director reminded Nigerians that three years imprisonment, payment of equivalent value of money involved or both punishments awaited violators of the cashless policy.
HammanTukur underscored the teeth of the “Rnforcement, guidelines and policies for mitigation of money laundering, terrorist financing, proliferation of weapons and prevention of predicate crimes” Act of 2022.
He particularly cited Sections 2 and 22 of the NFIU laws of 2022 to buttress his threat.
