The Nigerian Financial Intelligence Unit has banned cash withdrawals from accounts belonging to the Federal Government, all its agencies, state and local governments.

He also announced new guidelines for compliance by all financial institutions, non-financial institutions, public officials, and foreign missions, among others, in the country.

The NFIU cited the excess, revealing that state governments withdrew N701.54bn in cash over seven years between 2015 and 2022, while the Federal Government withdrew N225.72bn.

All 774 local governments combined only withdrew N156.76bn within the same period.

He noted that the application, guidelines and policies are for the mitigation of money laundering, terrorist financing, weapons proliferation and the prevention of predicate crimes.

The agency revealed that the application and guidelines comply with the provisions of Section 2 (Cash Transactions Outside the Limit of Financial Institutions), Section 13 (Use of New Products, Business Practices and New Technologies) of the Money Laundering Law. Money (Prevention and Prohibition), 2022, and section 26 (Seizure and detention of cash) of the Proceeds of Crime (Recovery and Management) Act, 2022.

He said this would affect the discontinuation of the withdrawal of naira and foreign denomination cash from public accounts in the federal, state and local governments.

The NFIU said the measure would take effect on March 1, 2023, and that any government official who withdraws cash from public accounts would be investigated by the Economic and Financial Crimes Commission, the Independent Commission on Corrupt Practices and Other Crimes. Related and the Nigerian Police. Force in collaboration with the NFIU, depending on the severity of the situation.

It stated that cash withdrawals from public accounts would be treated as money laundering, citing the Money Laundering (Prevention and Prohibition) Act of 2022.

Addressing reporters in Abuja on Thursday, NFIU Chief Executive Moddibo Tukur said the ban was necessary to curb the rate at which money is withdrawn from public accounts in flagrant breach of money laundering laws and, sometimes, for purposes of corruption.

He said: “The rate of withdrawals above the threshold from public accounts has been alarming. Over N701bn in cash has been withdrawn from 2015 to date.

“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 banks for the purposes 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 completely cashless economy by March 1, 2023 this year. As a consequence, any government official withdrawing even one naira in cash from any public account as of March 1 will be investigated and prosecuted in collaboration with relevant agencies such as EFCC, ICPC and NPF.”

However, the NFIU chief added that the president is in a position to grant exemptions to government officials based on certain considerations.