Buhari on Treasury Single Account (TSA)
Apparently, a master stroke against a tactless financial strategy emanating from an unholy alliance between banks and MDAs, the current implementation of this unified accounting structure, rightly called the Treasury Single Account (TSA), is laden with high expectations of economic prospects owing to its possibility of ensuring transparency and accountability.
The TSA is a unified structure of government bank accounts enabling consolidation and optimal utilisation of government cash resources. Through this bank account or set of linked bank accounts, the government transacts all its receipts and payments and gets a consolidated view of its cash position at any given time.
Federal establishments affected by this directive include all fully funded organs of government, ministries, departments and agencies (MDAs), foreign missions and partially funded government establishments like teaching hospitals, medical centres and tertiary institutions. Others include the Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), Corporate Affairs Commission (CAC), Nigerian Ports Authority (NPA), Nigerian Communication Commission (NCC), Federal Airports Authority of Nigeria (FAAN), Nigerian Civil Aviation Authority (NCAA), Nigerian Maritime Administration and Safety Agency (NIMASA). The list of affected organs also has National Deposit Insurance Corporation (NDIC), National Shippers’ Council (NSC), Nigerian National Petroleum Corporation (NNPC), Federal Inland Revenue Service (FIRS), Nigeria Customs Services (NCS), Ministry of Mines and Steel Development (MMSD) and the Department of Petroleum Resources (DPR), amongst others.
Contrary to views celebrating the TSA as a creation of Buhari’s administration, this principle of public accounting system and revenue management has been both a constitutional provision and an extant fiscal practice. Section 80 of the 1999 Constitution, which gives legal backing to the TSA reads: “All revenues or other moneys raised or received by the Federation (not being revenues or other moneys payable under this Constitution or any Act of the National Assembly into any other public fund of the Federation established for a specific purpose) shall be paid into and form one Consolidated Revenue Fund of the Federation”. Other sub-sections of that provision explain restrictions regarding the withdrawal of money from this Consolidated Revenue Fund.
Concerning its practice, as far back as the government of former President Olusegun Obasanjo, the need for a consolidated Federation Account was what informed the establishment of the Government Integrated Financial Management Information System (GIFMIS). However, it was President Goodluck Jonathan who piloted the TSA in its present form, when he commenced implementation with about 42 public institutions comprising ministries, departments and agencies, until recently when President Buhari began full implementation.
In the common sense appreciation of Buhari’s anti-corruption roadmap, the proper implementation of the TSA would remove the ambient secrecy in the management of public finance in MDAs. Under the guise of nondescript official secrecy, government staff and politicians have been known to employ all sorts of administrative devices and illegal liaisons to engage in business ventures for private gains using government money, and thereby frustrating proper execution of contracts, as well as causing salary delays.
Furthermore, it was common practice for agencies saddled with revenue generation to defraud government by siphoning public funds through all sorts of bank accounts in their custody and unknown to the authorities. With all government revenues and receipts being pooled into the TSA, not only would it be difficult for this monumental fraud to continue without serious sanctions, but also it would afford government a quick glance at the daily funds pooled into the TSA by revenue generation agencies. TSA also has the advantage of blocking capital flight and other leakages that would ensue from the pockets of unauthorised foreign accounts; and thereby retain more revenue for the system.
In practical terms, as one informed commentator surmised: “There is palpable optimism that with diligent implementation, the TSA will enhance transparency and accountability in the management of public funds. Furthermore, the practice should expectedly capture additional revenue to effectively fund more capital projects that will lift the social welfare of Nigerians.”
As laudable as the directive on TSA suggests, it is fraught with challenges which this administration may want to address for it to serve its purpose. In an economy notorious for late passage of budgets, a TSA regime may hamper disbursement for capital projects and operational projections of MDAs, unless as some argue, a certain percentage of government receipts are retained for smooth operations by these MDAs.
For foreign exchange generating organs like the NNPC, whose transactions are often denominated in dollar, the TSA regime may be said to likely affect optimal business operations. Banks that sit idly waiting for government funds to fall on their laps rather than seek out and manage depositors’ funds for economic growth and their profitability would need to re-strategise.
For a president, who in the last two and half months has been working without ministers, how he effectively implements this policy should foretell the mission of a man determined to rid Nigeria of waste and corruption.