In a sweeping policy shift poised to transform financial transactions across Nigeria’s public sector, the Federal Government has announced the immediate end of all cash payments within Ministries, Departments and Agencies (MDAs), signalling what many observers describe as the beginning of a nationwide PoS and digital payment takeover.
The directive, issued under the Federal Government’s new cashless compliance framework, mandates that all payments — including taxes, levies, fines, licenses, statutory fees, and service charges — must now be conducted through electronic channels such as Point of Sale (PoS) terminals, bank transfers, online platforms, and approved digital wallets.
According to government officials, the decision is aimed at strengthening transparency, enhancing accountability, curbing revenue leakages and eliminating cash-handling abuses that have plagued MDAs for years.
An official familiar with the implementation explained that the government wants to end the era where public funds “disappeared in transit” due to manual cash handling.
“This policy is designed to block leakages and ensure that every naira paid to government is traceable, recorded and accounted for,” the official said.
The new rule also bars MDAs from collecting cash for procurement, official transactions or internal financial operations. Staff are required to adopt approved electronic payment platforms for all government-related financial engagements.
Experts say the directive will significantly expand the use of PoS terminals nationwide, particularly in rural and semi-urban communities where MDAs operate physical offices. Banks and payment service providers are already positioning to deploy more devices and digital solutions to meet the expected spike in electronic transactions.
A senior government source stressed that the shift is not optional.
“MDAs have no discretion on this. Cash collections must stop. Any officer who violates this directive will face disciplinary consequences,” he said.
The Federal Government further noted that the policy aligns with its broader digital transformation agenda and its commitment to strengthening Nigeria’s financial architecture.
Payment processors and fintech operators have welcomed the development, describing it as a major step toward expanding financial inclusion and accelerating the adoption of cashless systems across the country.
However, some civil servants have raised concerns about network failures, unreliable power supply and the capacity of MDAs in remote areas to adapt quickly. But government officials insist those concerns are being addressed.
“The long-term benefits far outweigh temporary challenges,” an official said.
“Nigeria cannot continue operating a 21st-century government with 20th-century cash systems.”
With the new mandate in effect, analysts say Nigeria may be on the brink of the largest digital payment migration in its public sector history — a move expected to reshape how citizens interact with government offices nationwide.
