2015 to 2022: NFIU reveals how much FG, States, LGs withdrew from public accounts

The Nigerian Financial Intelligence Unit (NFIU) Thursday released new guidelines prohibiting cash withdrawals from public accounts and payment of estacodes, overseas allowances to civil and public servants in cash.

This is for compliance by all financial institutions, non-financial institutions and public officials in Nigeria.

It also said within 2015 and 2022,  the federal government withdrew N225.72 billion cash, States N701.54 billion  and Local Governments N156.76 billion cash, warning this act must stop.

Director and Chief Executive Officer NFIU Modibbo R. Hamman Tukur unveiled the guidelines in Abuja.

The directives were named provision 1 as “ Cash withdrawal from public accounts is hereby prohibited by requirement of the laws under reference. Provision 2: The payment of estacodes and overseas allowances to civil and public servants in cash is hereby prohibited.”

“It is hereby stated clearly that any individual or corporate body who violates the provisions of these Guidelines is in direct contravention of provisions of Section 2 of MLPPA, 2022, Section 13 of MLPPA, 2022, NFIU Act, 2018 and Section 26 of POCA, 2022, and their attendant principles and interpretations and will be liable to necessary prosecution and penalties from the effective said date. Cash withdrawals from public accounts would be treated as a money laundering offence.

“Also, it is hereby provided that any public officer or any citizen who comes into contact with the provisions of these Guidelines with its attendant principles shall as a matter of obligation promote the implementation and success of the Guidelines,” Tukur said.

According to him, the effective date for the enforcement and/or implementation of this guideline by all public authorities, institutions and organisations in the financial sector, financial institutions and designated non-financial institutions is 1^st March, 2023.

The guidelines are entitled: Enforcement, Guidelines and Policies for Mitigation of Money Laundering, Terrorist Financing, Proliferation of Weapons and Prevention of Predicate Crimes.

It is also for the “Discontinuation of Cash Withdrawal in Naira and Foreign Denomination from Public Accounts at Federal, State and Local Governments.”

The NFIU boss also said: “In compliance with its statutory responsibility under Section 3(1) a – s and Section 23 (2) a of the NFIU Act, 2018, and other provisions under the Money Laundering (Prevention and Prohibition) Act, 2022 (MLPPA, 2022), the Nigerian Financial Intelligence Unit (NFIU) hereby provides the following Guidelines for compliance by all Financial Institutions, Non-Financial Institutions and public officials in Nigeria.”

Withdrawals from 2015-2022

Citing reasons for the guidelines, he said: “In considering the provisions and enforcement requirements of the law, particularly Sections 2 and 13 of the MLPPA, 2022, Section 26 of the Proceeds of Crime (Recovery and Management) Act, (POCA) 2022, and                                                                                           the Central Bank of Nigeria (CBN) circular on the revised cash withdrawal limits, issued pursuant to its powers under the CBN Act, 2007, and Banks and Other Financial Institutions Act, 2020, the  NFIU noticed in the process of its financial transactions analysis that 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.

“According to NFIU analysis covering the period 2015 to 2022 (Annex 1), the Federal Government withdrew N225.72 billion cash, State Governments withdrew N701.54 billion cash, and Local Governments withdrew N156.76 billion cash.

“The cash withdrawals directly contravene the provisions of the MLPPA, 2022 and the Proceeds of Crime (Recovery and Management) Act, 2022 (POCA, 2022) which provide the legal framework setting limitations on cash transactions and sanctions for infringement of the provisions.

“Section 2 of the MLPPA, 2022 restricts cash payments of a sum exceeding N5 million (or its equivalent) for individuals, and N10 million or its equivalent for a body corporate. Section 19 of the MLPPA, 2022 imposes a fine of at least N10 Million or imprisonment for a term of at least three years (or both), in the case of individuals; and a fine of N25 Million in the case of a body corporate.

Most cash withdrawals from public accounts are according to him, “in excess of N5 Million and N10 million respectively which is prohibited and liable to imprisonment upon conviction.

“The breach of this particular provision became so rampant because there are heavy withdrawals of cash from public accounts necessitated by inflation and changes in the economy, and also due to payment for overseas travels in terms of estacode and other overseas allowances.”

Tukur further stated that by the principles of Section 2 (Cash Transaction Outside Financial Institutions Limit), and Section 13 (Use Of New Products, Business Practices And New Technologies) of the MLPPA, 2022, cash withdrawals must be prohibited in order to mitigate the risk of exposure of public servants to these crimes and protect the financial system from continuous abuse.

He explained that “in the meantime, this is not only indicting chief accounting officers of Ministries Departments and Agencies (MDAs) but in the context of Nigeria’s democracy, it gives room for adversaries, political opponents and antagonists to exploit the law against their competitors, or to their individual political advantage.”

Exceptions

Speaking to exceptions to the guidelines, he said: “There is nothing in these guidelines to suggest or indicate there is reason to compel or warrant a public official at federal, state and local government to go to a financial institution to withdraw cash. In the unlikely event that a public official feels he may need cash withdrawal, he may apply for approval for waiver from the Presidency which may be granted on case-by-case basis. Under no circumstance, shall any category of public officers be given a standing or continuous waiver to withdraw cash from any public account in any financial institution or designated non-financial institution.”

He added that “the application of these guidelines includes all foreign missions operating in Nigeria, accounts of all development partner institutions, and the accounts of all instituted funds in form of independent funds to be operated as mutual funds such as insurance funds, cooperative funds, brokerages funds, political party funds or pressure group/union funds, once the funds are designated to exist as funds or to operate independently for management and/or investment.”

“By these guidelines, the local government N500, 000 cash withdrawal limit with regards to public accounts and instituted funds are hereby discontinued. These Guidelines supersede and repeal the N500, 000 cash withdrawal limit of local government funds and also, since it is for criminal purpose, supersedes the CBN’s Regulation on cash withdrawal limit with regards to public accounts and instituted funds,” he said.