The Federal Government’s decision to abolish cash payments for all its services from January 2026 is set to reshape how citizens and businesses engage with public institutions. While the shift has been years in the making, the latest circulars issued to ministries, departments and agencies (MDAs) make it clear that the Treasury intends to enforce a full transition to digital collections, backed by stricter accountability rules and unified reporting systems.
At the heart of the reform is a push to eliminate the opacity that has long characterised revenue collection in many MDAs. Despite existing policies banning physical cash collections, government auditors have continued to uncover gaps in remittances, inconsistent reporting formats and the use of unofficial channels. The new directive insists that every payment must now pass through platforms approved by the Office of the Accountant-General and settle directly into the Treasury Single Account, without any deductions or commissions taken at the point of collection.
This approach is expected to significantly improve transparency. By mandating standardised digital records and real-time reporting, the Treasury will be able to track government revenue from the moment it is paid, reducing the likelihood of diversion or under-remittance. Agencies will also be subject to stricter documentation requirements, which the government argues will make it easier to reconcile accounts and detect discrepancies early.
The reform also marks a major shift in how Nigerians will pay for public services. Whether renewing a passport, registering a business, accessing regulatory services or paying statutory fees, users will have to transact through authorised electronic channels. For most MDAs, this means deploying point-of-sale terminals, setting up approved digital gateways and displaying mandatory notices that physical cash is no longer accepted. The government expects this to reduce queue times, improve payment confirmations, and limit incentives for officials to impose unofficial charges.
Samuel Oyekanmi, a capital market analyst at Norreberger, said the transition should not be viewed as a blanket ban on cash but rather as an incentive structure designed to promote transparency and monetary stability. “It is not really a ban on cash transactions,” he said. “It is a policy to discourage cash transactions by encouraging deposits and discouraging large withdrawals.”
Beyond payments, the circulars emphasise the modernisation of internal financial processes. Many agencies still operate fragmented systems that are not fully integrated into the wider government architecture. “The reduction in cash transactions can also help monetary policy authorities better influence liquidity, as well as drive innovation in the financial technology space,” Oyekanmi added.
Under the new rules, MDAs will be absorbed into a coordinated financial management framework that centralises reporting formats, billing procedures and reconciliation cycles. This reduces duplication of effort—such as running parallel sub-accounts and using manual registers—and provides the Treasury with a consolidated view of how public funds flow across the federal bureaucracy.
One major implication of this centralisation is its potential impact on public service delivery. If leakages are reduced and funds reach their intended destinations more reliably, the government expects improved outcomes in sectors such as healthcare, education and infrastructure. Past challenges—delayed releases, incomplete remittances and manual bottlenecks—have frequently stalled projects or created funding shortfalls. A transparent digital trail could help mitigate these setbacks and make it easier for agencies to plan and execute programmes.
Accountability features prominently in the new regime. The circulars warn that non-compliant agencies or officers risk sanctions, particularly if they continue to collect cash, fail to deploy approved devices, or operate unregistered front-end applications. The ban on customised platforms reflects an effort to curb systems that previously allowed unauthorised deductions, selective reporting or weak oversight. By insisting on uniform digital infrastructure, the Treasury aims to close the loopholes that made it difficult to track who collected what, when, and on whose behalf.
The changes may also empower citizens and watchdog groups. Digital records, consistent reporting and a centralised financial system mean that more information on government revenue could become accessible to stakeholders beyond the civil service. This strengthens public scrutiny and gives anti-corruption bodies clearer evidence trails when evaluating how agencies handle funds.
For the reforms to succeed, however, MDAs will have to meet the 45-day deadline to install PoS terminals and other authorised devices at every payment point. Questions remain about infrastructure gaps, staff capacity and the readiness of agencies accustomed to manual processes. Yet for the Treasury, the policy signals a decisive break from a system long weakened by leakages and poor controls.
If fully implemented, the 2026 no-cash rule could mark one of the most significant steps in Nigeria’s push towards a cleaner, more efficient public finance system—one in which the journey of every naira is visible from the point of payment to the federal purse.
“I think it is a welcome development, especially as it is not abrupt like the first time the CBN tried something similar under the Emefiele administration.”