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Friday, June 9, 2023

Nigeria to Stop Cash Withdrawals From Government Accounts

Nigeria to Stop Cash Withdrawals From Government Accounts – The head of the Nigerian Financial Intelligence Unit (NFIU), Modibbo R. Hamman Tukur, announced that starting from March 1, government employees in Nigeria will no longer be able to withdraw cash from government accounts. The new law, which apparently applies to federal, local, and state authorities, is intended to combat the government’s high levels of corruption and money laundering.

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In addition, according to a Reuters article, the new law is in line with the Nigerian government’s objective of creating 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.”

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To support Tukur’s claims, the report stated that an examination by the Nigeria Financial Intelligence Agency (NFIU), an autonomous unit within the Central Bank of Nigeria (CBN), revealed that between 2015 and 2022, officials withdrew $2.45 billion from government accounts. The majority of withdrawals exceeded the established limitations, according to the report. Tukur stated that when cash is required, officials will have to seek a waiver from the presidency. This may, however, be given only on a “case-by-case” basis.

In its recently revealed Nigeria Payments System Vision 2025 document, the CBN said it 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.

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Recent reports indicate that the bank also instructed banks to halt over-the-counter withdrawals of the new banknotes. In addition to limiting the usage of cash, the Central Bank of Nigeria (CBN) seeks to increase the use of its faltering central bank digital currency. Despite the several steps taken to make the CBDC appealing to consumers, it was stated that very few Nigerians had adopted this.


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