The federal government of Nigeria has moved to enforce a new policy that will restrict the withdrawal of cash from all public accounts with immediate effect. The policy will mandate those holding a position of public office 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 disclosed by the Director/CEO of the unit, Modibbo Hamman Tukur, at a parley with the Chairman of Independent National Electoral Commission (INEC), Prof. Mahmud Yakubu, in Abuja.
As per the statement, the new policy was propelled due to the persistent devaluation of the Naira and the introduction of a new Naira Policy, which automatically activates Section 1 of the Money Laundering Prohibition Act. This new policy comes at the imminent decision point of when the Central Bank of Nigeria (CBN) had just initiated a policy 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.
This new policy will enable transparency and accountability.
According to the CBN policy, which also limits the POS withdrawal to N20,000 per day, has been implemented to promote and enhance the country’s cashless policy and tackle money laundering and vote-buying, among other vices, as the 2023 general election nears. Also, the disclosed statement made it known that the move to prohibit cash withdrawal from public accounts was prompted by an observation which reveals 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.
An atmosphere where Public office holders withdraw massive cash, as asserted, does not only violate the country’s Money Laundering Act but also enables corruption. Tukur stated that the new policy would enable transparency and accountability, exposing public officials to being liable to imprisonment in situations of misconduct. He noted that the NFIU is already establishing an advisory to the Secretary to the Government of the Federation, state governors and local government chairmen across the country.
Government has reiterated strong firmness in implementing the policies.
Main objective 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. With numerous monetary policies passed into law in 2022 alone, President Muhammadu Buhari’s administration appears to be on a last-minute push to enforce transformational policies in the country’s financial industry. The administration has reiterated strong firmness in implementing the policies despite public outcry about the Naira redesign and the new withdrawal limits.
The apex bank had earlier lamented about the excess amount of the naira in circulation, saying there is much less in the banks’ vaults. However, experts, lawmakers, and the general public raise concerns over the cash withdrawal policy, noting that it will have adverse effects on Small and Medium Enterprises (SMEs), which could end by stifling the growth of the country’s economy. Meanwhile, the CBN governor, Godwin Emefiele, noted that the policy is fully supported by the president.
More should be done to organize training on how to use ATM and POS.
Additionally, Emefiele explains that the apex bank has moved to put in place necessary measures to onboard rural areas residents and enable financial inclusion across the country. On his part, Tukur stated that governors and local government chairmen will need to organize training to educate and enlighten rural area residents, market men and women on how to make use of their debit cards via ATM and POS Services. This is also perceived as part of the driving measure to promote financial inclusion in the country.