The federal government of Nigeria has moved to implement a new policy that will restrict cash withdrawal from all public accounts.
The policy, which will take immediate effect, mandates public office holders to open both domiciliary and local bank accounts.
According to a statement signed by the Nigerian Financial Intelligence Unit (NFIU)’s Chief Media Analyst, Ahmed Dikko, the new policy was made known by the Director/CEO of the unit, Modibbo Hamman Tukur in Abuja, at a parley with the Chairman of Independent National Electoral Commission (INEC), Prof. Mahmud Yakubu.
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The statement explained that the introduction of the new policy became necessary due to “the consistent devaluation of the Naira and the introduction of a new Naira Policy, which automatically activates Section 1 of the Money Laundering Prohibition Act.”
The move comes on the heels of the decision by the Central Bank of Nigeria (CBN) to redesign naira notes and introduce a new policy that limits cash withdrawal to N100,000 for individuals and N500,000 for corporate organizations per week. The policy, which also limits the POS withdrawal to N20,000 per day, is geared toward promotion of the country’s cashless policy and tackling vote-buying among other ills as the general election nears.
The statement said the policy prohibiting cash withdrawal from public accounts was initiated following the observation that most cash withdrawals from government accounts, including payments for estacode for public officials, are often in excess of the cash withdrawal limit provided by the Money Laundering Act.
Public office holders are notorious for withdrawing massive cash from public accounts, which does not only violate the Money Laundering Act but also enables corruption. Tukur said the new policy will create transparency and accountability, exposing public officials to being liable to imprisonment.
He said the NFIU is already developing an advisory to the Secretary to the Government of the Federation, state governors and local government chairmen across the country. The aim is to direct all public servants in their employ to open both domiciliary and naira accounts before the policy, which becomes compulsory by law, is fully implemented.
President Muhammadu Buhari’s administration appears to be on a last minute push to make changes to some policies in the Nigerian financial sector. Despite public outcry about the naira redesign and the new withdrawal limits, the financial industry regulator has said there is no going back in their implementation.
The central bank had earlier lamented about the excess amount of the naira in circulation, saying there is much less in the banks’ vaults.
Part of the concerns raised by experts, the public and lawmakers is that the cash withdrawal policy will negatively impact Small and Medium Enterprises (SMEs), stifling the country’s economic growth.
But the CBN governor Godwin Emefiele said he has presidential backing to implement the policies, allaying concern that the cash withdrawal policy will harm small businesses in rural areas. He said the apex bank has put measures in place to ensure that rural dwellers get the needed financial inclusion.
As part of the drive to promote financial inclusion, Tukur said governors and LG chairmen will need to organize training for market men and women on how to use ATM and POS Services.