TSA debit falls short of expectations, says report

Indications have emerged that the Treasury Single Account debit was short of expected amount by 47 per cent at N345 billion.
In a report put together by Renaissance Capital on Monday, out of the estimated N652 billion government’s naira deposits in banks, only 53 per cent entered the TSA vault, falling short of N307 billion.

While it is unclear about the figures on the value of federal foreign exchange deposits that were moved to TSA as at deadline, estimates as at first quarter of the year put federal foreign exchange deposits at N570 billion, which brought the total federal deposits in banks to N1.2 trillion.

The development also means that a net TSA debit would be below N240 billion, against expected N1 trillion.
“While we acknowledge that last minute exemptions were given to some profit-oriented Ministries, Departments and Agencies- Transcorp Hilton; Power Holding Company of Nigeria; development banks (Bank of Agriculture, Bank of Industry and NEXIM); Nigerian National Petroleum Corporation subsidiaries, excluding NAPIMS and NIPEX; and few others), and the fact that some monies had been moved to TSA ahead of previous deadlines through 2015, we find it inconceivable that 47 per cent of Federal Government deposits are attributable to these exempted firms or previous TSA movements.

For example, we observed that TSA debits by FBN Holdings and Zenith represent 10 per cent and 15 per cent of their first half 2015 public sector deposits, compared to 45 per cent at GTBank.

One plausible explanation for this significant difference may be that FBNH and Zenith transferred more federal foreign exchange deposits than naira. This would imply that on a gross TSA debit basis (NGN + FX), they benefit proportionately less from CRR credits than GTBank, as CRR is only on Naira deposits,” the Head of Research Nigeria and sub-Saharan Africa Bank Lead Analyst at Renaissance Capital, Solanke Adesoji, said.

Among the top 10 banks with high TSA debit were Ecobank (N26.3 billion), Diamond Bank (N24.8 billion), Keystone (N14.3 billion), Fidelity (N14.1 billion), First City Monument Bank (N13.1), Skye Bank (N12 billion), Wema Bank (N10.9 billion) and Access Bank (N10.1).

Updating our analysis from last week on the CRR percentage that will be necessary to offset the ‘net TSA debit’, we conclude that the CRR could be eased slightly to 29 per cent against our previous 23 per cent estimate. The gross TSA Naira debit amounted to NGN345bn while NGN107bn was total CRR credit, implying a ‘net TSA debit’ of NGN238 billion.