TSA and matters arising

There is no doubt that the Treasury Single Account (TSA) has come to stay. It can be said that TSA is now a fait accompli as different governments had toyed with this idea long before the administration of President Muhammadu Buhari.

The   federal government under the technical support of the IMF and the World Bank has been making efforts since 2008 to implement the TSA concept in order to derive the benefit of efficient management of government cash resources and reduce the burden of borrowing.”

The primary concern had been how to capture all of the Federal Government’s revenue. The perception of leakages in revenue collection was total even though it did not flow from any empirical study or audit.

In 2007, the Fiscal Responsibility Bill was passed into law. The Fiscal Responsibility Act created the Fiscal Responsibility Commission and required federal agencies to remit yearly, 80 per cent of their Operating Surplus to the Consolidated Revenue Fund.

However, this Act failed woefully to define what constituted “Operating Surplus”. This was left to the Ministry of Finance and the FRC’s apparatchiks to interpret. It should be noted that the creation of the FRC was one way to manage the recurring problem of bringing some government agencies within the control and ambit of the Ministry of Finance.

The essence of the TSA should be among others to enhance the federal budget that captures all the MDAs which was not achievable under the past successive governments.

However, whether the TSA is foolproof against revenue leakages; how it affects liquidity in the banking sector; the Remita challenge;

huge reconciliation problem and whether service delivery has been enhanced or curtailed under the TSA, are part of the issues that government needs to tackle for it to get the full benefits of the policy.

For instance, according to the former CBN governor, Sanusi Lamido Sanusi, “as at December 2010, over 5000 dormant and inactive accounts belonging to ministries, agencies and departments [MDAs] existed in all the CBN branches largely unreconciled”.

According to reports, it took a special CBN team working round the clock for about a year to be able to reduce this to about 500 as at December 2011 during the period the TSA commenced.

Now, if the CBN alone had over 5000 dormant and unreconciled accounts at some point in time, then the number of hidden, unknown and unreconciled accounts the MDAs  may have kept with deposit money banks under different guises could only be imagined than described.

However, with the TSA, there may not be any hiding place for spurious bank accounts cooked by the MDAs.

Although the TSA has come to stay, but still undergoing fine-tuning here and there. The issues listed above are germane for a better understanding of the effect of the TSA and for the efficient implementation of the policy regime.

There is no doubt that the policy is yet to receive total compliance by some MDAs and government parastatals, including some federal universities that have to put some activities on hold because of the fact that they are not favourably disposed to paying into the consolidated accounts with the Central Bank of Nigeria (CBN).

Also, the confidentiality agreement between banks and customers are being emphasized by some banks which feel that they are under obligation to accept funds from their customers even when it is obvious that the action is in contravention of the TSA policy.

It is important to make the point that the TSA will not stop revenue leakages if we understand the term in all its ramifications. This is because, revenue leakages include but not limited to outright stealing of government funds; provision of services when revenue for such service has not been earned; using fake documents to procure services with no revenue accruing to government, among others.

Although the TSA is a good policy, government should as a matter of urgency, concurrently develop control mechanisms to checkmate IT eggheads that would want to take our commonwealth for granted.

There is need for periodic appraisal of the policy in terms of reduction in average monthly domestic borrowing of the government and the usual augmentation through the CBN’s Ways and Means’ (overdraft) interventions

One simple fact about TSA is that its success has refused to be blighted by political intrigues. In 2011, former president Goodluck Jonathan of PDP initiated the scheme. In 2015, President Mohammadu Buhari of APC mandated the full implementation of the TSA initiative.

There is need for all the apparatus of bureaucracy to key into it and ensure that it succeeds.