Over the years, the agitations against security votes have been gaining ground in public squares. Many think that the essence of the funds is not well spelled out while others have been urging for the release of the funds to be halted since the governors and local government chairmen can’t account for it.
In a way to coordinate how the funds are spent, the Governors and Local Government Chairs who want to access the funds must now have to create an account with Central Bank of Nigeria. This is believed to be a way to monitor how the fund is spent.
Rcalls that the Nigeria Financial Intelligence Unit (NFIU) has stopped the withdrawal of cash from public accounts since January 2023. This directive has taken effect since March 1.
This effect does not only affect the state governors but also affects every other public office holder at all levels who want to access government funds.
However, the Federal government decided to permit the local and state governments to continue to use their security votes in cash until May 29, the same date the current dispensation is expected to hand over to a new government. Nevertheless, they can only make withdrawals through the CBN.
This means that after May 29, over a month from now, the state and local governments can’t use the security votes in cash but through a cashless policy.
On Tuesday, April 4, Federal agencies – the NFIU, the CBN, the Economic and Financial Crimes Commission (EFCC), and the Independent Corrupt Practices Commission (ICPC), had a virtual meeting with governors. After the meeting, the new development was announced.
Even though the agencies compromised with the state governors, according to The Nation, by shifting the ban on the withdrawal of cash from public accounts from April 15 to May 29, there are reports that the governors are still opposing the entire decision of not spending the security votes in cash and having to operate an account with the CBN before they can use the funds.
There are also reports that the governors might drag the federal government to court over this development.
The Implication of this development and NFIU’s warning
This new development means that the incoming governors will be bound by the state and local government’s ban on cash withdrawals from any public accounts.
According to the NFIU, the new agreement is designed to stop cash withdrawals from public accounts to thwart potential money laundering, terrorism financing, and other illicit activities.
It was also meant to ensure that all transactions, including payments and transfers, are made electronically through banks in conformity with global best practices.
The directive applies to all public entities, including the federal, state, and local governments, as well as all of its agencies and parastatals.
Anyone found to violate the directive will face serious penalties, including fines and up to seven years in prison.
Governors who ignore this directive will be investigated but not immediately prosecuted due to their immunity.