The ban on cash withdrawals from public bank accounts commences March 31 this year, the Nigeria Financial Intelligence Unit (NFIU) has announced.
The restriction also affects accounts operated by political parties, foreign missions, and Nigeria’s development partners.
NFIU, in its guidelines on the measure, warned that any breach by an official of the affected bodies, including governors, would be treated as money laundering.
According to the guidelines, any governor, who withdraws even one naira from any of his state’s bank accounts, will be investigated while in office and prosecuted after his tenure.
Also, any other official of governments and political parties accused of breaching the rules will be probed and, if found guilty, be tried immediately along with his accomplice(s).
There is, however, a provision for a waiver, which must be granted by the President.
NFIU Head Modibbo Tukur told reporters in Abuja that the ban would help to stop the rate at which cash is being taken out of public accounts “without recourse to the money laundering laws and sometimes, for corruption purposes.”
Tukur also disclosed that “the local government N500,000 cash withdrawal limit with regards to public accounts and instituted funds are hereby discontinued.”
He said: ”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 offences due to their exposure to cash withdrawals from public accounts.”
Tukur revealed that between 2015 and 2022, state governments withdrew N701 billion from their various accounts; federal agencies, N225 billion; and Local Governments, N156 billion.
The NFIU head added that he had ”instructed all financial institutions to stop cash withdrawals from government accounts from March 1, 2023.”
Tukur stated that banks and government agencies at all levels have been directed to begin “online transactions for the purpose of accountability and transparency.”
He said: ”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(Economic and Financial Crimes Commission) and ICPC (Independent Corrupt Practices and other related Offences Commission).
“The guidelines also “include all foreign missions operating in Nigeria and accounts of all development partner institutions.”
His words: ”Any individual or corporate body that violates the provisions of these new guidelines will be liable to necessary prosecution and penalties from the said date (March 31).
“Cash withdrawals from public accounts will be treated as a money laundering offence.
“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 levels to go to a financial institution to withdraw cash.
“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 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, once the funds are designated to exist as funds or to operate independently for management and/or investment.”
He insisted that “these guidelines supersede and repeal the N500,000 cash withdrawal limit of local government funds and also, since it is for a criminal purpose, supersedes the CBN’s Regulation on cash withdrawal limit with regards to public accounts and instituted funds”.
The NFIU boss disclosed that “most cash withdrawals from public accounts are in excess of N5 million and N10 million for individuals and corporate bodies respectively which is prohibited and liable to imprisonment upon conviction”.
The breach of this particular provision he said ”became so rampant because there are heavy withdrawals of cash from public accounts necessitated by inflation and changes in the economy, and also due to payment for overseas travels in terms of estacode and other overseas allowances.”
He noted that “cash withdrawals must be prohibited in order to mitigate the risk of exposure of public servants to these crimes and protect the financial system from continuous abuse”.
But under the new guidelines, Tukur hinted that offenders may be asked to pay three times the amount they are accused of withdrawing.
With the new measure, the NFIU believes that N1 trillion will be mopped up from the system, thus helping the Central Bank of Nigeria (CBN) in its effort to sanitise the liquidity in the system.
Section 19 of the Money Laundering (Prevention and Prohibition) Act, 2022 (MLPPA, 2022), he added “imposes a fine of at least N10 million or imprisonment for a term of at least three years (or both), in the case of individuals; and a fine of N25million in the case of a body corporate”.
