TSA and financial accountability in Africa

Since its full adoption by the Nigerian federal government on September 15, 2015, the Treasure Single Account (TSA) has been criticised, with much of the criticism biased and hinged on uninformed perspectives. The TSA has been blamed for job losses by individuals, low deposits thresholds by banks, lack of autonomy for universities and restriction of access to funds meant for the execution of projects by government functionaries.

While it is true that many human inventions are sometimes fraught with foibles, some of which could be corrected, I am yet to identify why the TSA is being wrongly fingered for certain mistakes of the government. Conversely, I believe the adoption of the policy the regime of President Muhammadu Buhari has helped the government to better understand the strength of its finances.

the government has recovered trillions of its cash assets lying dormant in deposit money banks across the Federation. The President was quick to cite this at the March 2016 National Executive Committee meeting of the All Progressives Congress (APC) in Abuja.

The recovered idle funds were yielding interest for banks and faceless individuals all this time, while the government was starved of funds for projects of national importance. I can’t stand against a policy that reverses that ugly trend, however, procedural and painstaking it may be.

I consider a system that allows agencies to operate about 17,000 poorly monitored bank accounts. Such systems allow for financial recklessness to fester and permits a lack of accountability to go unchecked. In an era where Nigerians clamour for probity and transparency in government’s finances, the TSA should not sacrifice on the altar of convenience.

Before Nigeria began the implementation of the policy in 2015, a couple of African countries have adopted similar policy with the aim of instilling a culture of probity and accountability in their financial systems

Take Rwanda for instance. In 2005, it adopted a zero-balance drawing system which requires that its ministries and budget agencies’ accounts are held in the National Bank of Rwanda. The policy stipulates that all ministries and budget agencies begin a new fiscal year with zero cash balance on their accounts. Thus, cash transfers are made from the treasury to the ministries’ accounts monthly and the financial transactions they (ministries) make are restricted to their allocations for the month. To make the policy more foolproof, daily checks are conducted to ensure that whatever funds left at the close of business are transferred to the Treasury for re-issue the following day to drive transparency.

Uganda adopted its TSA policy in 2013 in accordance with section 4 (1) of its Public Finance and Accountability Act (2003) which states that “the Minister responsible for Finance is responsible for maintaining transparent systems which, among others, ensures the efficient and cost-effective cash management of the Consolidated Fund, any other fund established under the Act and other public money.” The policy in Uganda started out aggregating all government cash balances into a set of linked bank accounts, with the long-term plan being a single bank account where all revenues would flow from and payments made. Before the adoption of the policy, the country’s MDAs operated over 2000 accounts which were dormant and became a breeding ground for corruption and misappropriation of public funds.

Like Nigeria, Kenya adopted the TSA policy in reaction to the loss of billions of dollars in its public system. The adoption came after the earlier adopted Integrated Financial Management Information System (IFMIS) had proved ineffective in waging and winning this war, much like previous financial management systems had failed to curb corruption in the Nigerian public sector. Thanks to its TSA policy, Kenya proposed National Treasury and County Treasury Single Accounts, which would both be housed at the Central Bank of Kenya and align with the government’s renewed technological focus.

So instead of blaming President Muhammadu Buhari administration’s adoption of TSA, I think we should all do some research and have more informed opinions about the policy. So far, the TSA has returned N4.3 trillion into government coffers. As disclosed by the Accountant General of the Federation Alhaji Ahmed Idris earlier last week, the policy has reduced inflation and reversed the loss of a whopping N70 billion to failed banks in 2011 when it was not in force.

Indeed, the government needs to sensitise the public on why the TSA is the only choice for any forward-looking African country in the 21st century. More importantly, it is not enough for the government to deposit these funds into the TSA and reel out how much we are recovering every quarter. We also need to see how these funds are put to work and make a difference in life as we have always known it as Nigerians.

Braimah wrote in from Benin, Edo State.