The NFIU said the measure is aimed at strengthening accountability in the management of public funds and reducing the risk of money laundering and other financial irregularities involving government accounts.
Head of the NFIU, Moddibo Haman Tukur, announced the directive while addressing journalists at his office in Abuja on Thursday.
According to Tukur, the volume of cash withdrawals from public accounts above the stipulated threshold had become a major concern.
He disclosed that more than N701 billion had been withdrawn in cash from government accounts between 2015 and the time of the announcement.
Tukur said the NFIU had directed financial institutions to stop processing cash withdrawals from government accounts with effect from March 1, 2023.
He warned that government officials who violate the directive could face investigation and prosecution, alongside other individuals found to have participated in any breach.
The NFIU boss said government agencies and financial institutions had also been directed to ensure that transactions involving public funds were conducted through the banking system.
He explained that the move was intended to improve transparency, accountability and traceability in the management of government finances.
Tukur said the policy was also consistent with Nigeria’s broader transition towards a cashless economy, an initiative being led by the Central Bank of Nigeria (CBN).
“As far as we are concerned, Nigeria will become a full non-cash economy by March 1 this year,” he said.
He added that any government official who withdrew cash from a public account after the effective date would be subject to investigation and possible prosecution in collaboration with relevant agencies, including the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC).
“This is not reversible as we are only enforcing the law,” Tukur said.
Addressing the possibility of officials seeking exemptions on the grounds of government emergencies or other exigencies, the NFIU chief said any waiver would have to come from the appropriate authority.
According to him, only President Muhammadu Buhari had the authority to grant such a waiver to a government official.
The directive is expected to affect the way public funds are accessed and disbursed across the three tiers of government, with greater emphasis being placed on electronic and bank-based transactions.
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