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Nigerian Government Directs Capital Transfer To Central Bank (Posted Dec 2000) Tell your friends about this page! Email it to them. 

The Federal government of Nigeria in a move aimed at ensuring financial probity and sucking in excess liquidity from the financial system has recently directed the capital allocations to all ministries and parastatals be paid though the Central Bank of Nigeria (CBN). The government, though a federal treasury circular (reference number A5- 35/2000), issued by the Accountant General of the Federation, Julius Kayode Naiyeju and entitled: "Operation of Capital Accounts with the Central Bank of Nigeria", directed that "henceforth, all allocation of capital rated and special projects for ministries, extra ministerial departments, parastatals and agencies would be made only into the capital account of such organisation with the CBN".

And in order to implement the directive, which has finally put to rest the anxiety created by its announcement two months ago. the CBN has been directed to reactivate the accounts of all Ministries and Parastatals. The apex bank has also been directed to open capital accounts for those ministries that have not operated such before and credit all future allocations to all such ministries into the accounts. According to Naiyeju, "the directive became necessary because government has observed the failure of ministries and parastatals to comply with the directive to purchase Treasury Bills with their idle funds, is that the negative influence of such funds on the economy may be eliminated or contained".

By virtue of this circular, the Accountant-general of the federation said all federal ministries, extra ministerial departments, parastatals and agencies are expected to liaise accordingly with the CBN in order to formalise the reaction or opening of the capital; accounts as the case may be. He added that withdrawal of money from the reactivated capital accounts with CBN would also be subject to the full utilisation of the capital allocation currently with the commercial / merchant banks and discount houses. the ministries are also expected fully utilise the current balances in their capital and special accounts with any commercial/merchant bank by the 31st of December 2000. While any unutilised balances in these accounts are to be transferred to the capital accounts with the CBN so as to close the capital accounts with the commercial banks and discount houses.

Naiyeju further disclosed that the contents of the circular, which amends the Treasury circular, No.AI and BI/ 1999 of March 5, 1999 should be brought to the notice of all parastatals and agencies for immediate compliance. The circular was addressed to among others, the chief of staff to the president, the Deputy chief of staff, Office of the vice President, all ministers, the secretary to the government of the Federation, Head of civil service of the Federation, special advisers, all service chiefs, inspector general of Police, Chairman Federal Civil commission, all Federal Permanent Secretaries, clerk of the National Assembly and the Auditor - General of the Federation.

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