Nigeria has officially restricted cash withdrawals from banks to a mere $44 per individual and $11,000 per business per week in an effort to control illict financial flows to curb inflation.
According to the Nigerian Financial Intelligence Unit (NFIU), the directive is also meant to limit the number of banknotes in circulation and help modernize the payment system through digital money transfers, mobile money, and e-Naira adoption among businesses.
Government officials in Nigeria will also be barred from withdrawing cash from government accounts from March 1 2022, the head of NFIU said in a statement.
The new rules, which will apply to federal, local and state officials, are aimed at combating money laundering and corruption and are in line with government efforts to move Africa’s most populous nation toward a cashless economy.
“Civil servants are becoming more and more vulnerable to money laundering and its predicate offenses due to their exposure to cash withdrawals from public accounts,” said Modibbo R. HammanTukur, Director and CEO, the Nigerian Financial Intelligence Unit (NFIU).
According to NFIU, from 2015 to 2022, officials withdrew nearly 1.1 trillion naira ($2.45 billion) from government accounts, most of it exceeding previous withdrawal limits.
“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,” HammanTukur said in the statement.
In December 2022, Nigeria’s central bank began circulating newly designed 200, 500 and 1,000 naira notes and limited weekly cash withdrawals in order to curb inflation and move towards a cashless economy.
The Central Bank also decreased the weekly cash withdrawal limit for individuals to 100,000 Nigerian naira ($225) from 2.5 million naira ($5,638). A $45 daily limit on ATM withdrawals also came into effect in December 2022.
Almost 85% of the 3.23 trillion naira ($7.2 billion) in cash in circulation is now held outside of banks.
Part of the CBN’s strategy to drive down cash usage is to increase the adoption of the eNaira digital wallet that was launched in October 2021. Only one million Nigerians have downloaded the wallet since it was introduced with CBN vowing to increase sensitization efforts.
‘From today, we are going to carry out this sensitization program through all the nooks and crannies of this country until eNaira is widely accepted,’ an official said during the platform’s 1-year anniversary celebration in late October 2022.
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