TSA to the rescue

Alhaji Ahmed Idris, AGF

Alhaji Ahmed Idris, AGF

           Implementation of the Treasury Single Account by President Muhammadu Buhari’s administration boosts government’s revenue and may provide the panacea to the funding gap in the 2016 budget

By Pita Ochai

The Treasury Single Account (TSA) scheme may turn out to be the saving grace for Nigeria in this era of falling economic fortune occasioned by the dwindling price of crude oil in the international market. At the last count, 98 percent of federal Ministries, Departments and Agencies (MDAs), according to the Accountant General of the Federation (AGF), Alhaji Ahmed Idris, have complied with the directive to key into the TSA.

Analysts believe that with the TSA, all the MDAs which in the past operated multiple, and in some cases, other fraudulent accounts will no longer be able to do so. All federal funds are now easily tracked and accounted for. As at December 2015, a whopping sum of N2.3 trillion was in the Federal Government’s accounts, according to figures released by Accountant-General of the Federation. Available statistics, he added, shows that 726 MDAs which are responsible for 97.12 percent of the national budget have been captured under the GIFMIS-enabled TSA.

The TSA, Idris noted, is not a recent innovation as the policy was adopted in 2011. He, however, said that it has been improved upon and sub-accounts created while Consolidated Revenue Fund (CRF) remains the TSA main account. He said that the TSA is very flexible and that MDAs can easily access their funds. He reiterated the commitment of the Treasury House to the success of the reform policies of government, adding that the Office of the Accountant-General of Federation (OAGF) has employed the services of a Quality Control Assurance Manager as the office is mindful of hackers.

The AGF while itemizing reasons for adoption of TSA said that the need to stem financial hemorrhage and plug all loopholes informed government’s decision to implement the TSA, stressing that the TSA would mark the beginning of the end of massive borrowing in Nigeria.

Like the Accountant General of the Federation, Minister of Finance, Mrs. Kemi Adeosun, is optimistic that funds transferred to the Treasury Single Account domiciled with the Central Bank of Nigeria (CBN) would reduce borrowings to fund the gap in the 2016 budget.

Speaking on the benefits of the TSA scheme in a keynote address at  a  recent one-day TSA workshop for state accountants-general in Abuja, Mrs Adeosun said that a lot of  funds have been recovered following its implementation. Several benefits, she noted, are derivable from the full implementation of the TSA scheme as it had provided, for the first time, clarity on government funds at any point in time. “I can report that work is now ongoing within the treasury to determine how much of these funds can potentially be utilised to part-finance the 2016 budget and how much relates to pending commitments. This, of course, will reduce the amount to be borrowed. The TSA has provided us with financial information on the revenues of agencies funded by government and has reduced revenue suppression,” she said.

According to her, with such financial information government would be able to enforce compliance with the Fiscal Responsibility Act and ensure that revenue agencies generate expected surpluses and remit to the federal purse.“The TSA has eliminated opportunities for brokerage and other corrupt practices that previously encouraged agencies to accumulate funds with commercial banks rather than apply them to their intended uses. We believe that this will reduce payment delays to contractors, minimise late payment penalties and will consequently improve project completion times and service delivery,” she added.

The minister also disclosed that the TSA had corrected the practice of government borrowing short-term funds at high rates of interest, while simultaneously having idle funds in various bank accounts. By reducing the number of accounts in operation, she said, monitoring and control had significantly improved.

The minister described the TSA as an essential reform for any government wishing to pursue fiscal sustainability and prudent management of its resources. “It increases accountability and transparency, improves the processing of payments and collections and reduces borrowing costs,” Mrs Adeosun said.

She commended the Office of the Accountant General of the Federation for organising a workshop aimed at sensitising the states’ accountants-general on the need to key into the TSA scheme of the Federal Government.

While admitting that some states are already implementing the TSA, the minister urged them to kindly share their experiences with others to encourage those yet to decide to take their first step in this direction.“At the federal level, I can assure you that our experience has been worthwhile. The TSA has provided complete and timely information on government cash resources, improved operational control on budget execution, enabled efficient cash management, reduced bank fees and transaction costs, facilitated efficient payment mechanisms, and has also reduced the Federal Government ways and means requirement to bridge the budget funding gap,” the minister said.

The implementation of the scheme began in August last year, when President Muhammadu Buhari directed all MDAs to comply with the instructions on the TSA unfailingly by September 15, 2015. According to the directive, the measure specifically aimed at promoting transparency and facilitating compliance with Sections 80 and 162 of the 1999 Constitution.

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