President Buhari Orders Federal Mdas To Open Treasury Single Account

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As the federal government grapples with the challenge of declining revenues, President Muhammadu Buhari has ordered each and every federal ministry, department or agency to start paying into a Treasury Single Account (TSA) for all government revenues, incomes and other receipts.

Treasury Single Account (TSA), is a major government policy which raises hope of blocking leakages by accurately tracking activities of revenue generating Ministries, Departments and Agencies.

TSA, a unified structure of government bank accounts gives a consolidated view of government cash and is expected to bring about transparency, efficiency and accountability in compliance with sections 80 and 162 of the 1999 Constitution.

The implementation of this directive will pool together in one account in the Central Bank of Nigeria (CBN), all receipts and payments of the government handled by MDAs, partially funded by the Federal Government and all government controlled Trust Funds and Social Security Funds

This presidential directive would also end the previous public accounting situation of several fragmented accounts for government revenues, incomes and receipts, which in the recent past has meant the loss or leakages of legitimate income meant for the federation account.

It would be recalled that President Muhammadu Buhari had earlier promised state governors at the inaugural meeting of the National Economic Council, NEC, in June, that all revenues prescribed for lodgment into the federation account will be treated as such under his watch and that he will ensure strict compliance with all relevant laws on accounting, allocation and disbursement.

Since then the presidency has worked with relevant agencies of the federal government to evolve this policy directive.

This directive applies to fully funded organs of government like the Ministries, Departments, Agencies and Foreign Missions, as well as the partially funded ones, like Teaching Hospitals, Medical Centres, Federal Tertiary Institutions, etc.

Agencies like the CBN, SEC, CAC, NPA, NCC, FAAN, NCAA, NIMASA, NDIC, NSC, NNPC, FIRS, NCS, MMSD, DPR are also affected.

For any agency that is fully or partially self-funding, Sub-Accounts linked to TSA are to be maintained at CBN and the accounting system will be configured to allow them access to funds based on their approved budgetary provisions.

TSA which is a brainchild of the Goodluck Jonathan administration was previously resisted by MDAs because the new system does not allow stealing. The objective is to get as more internally generated revenue remitted into the government treasury while helping the Central Bank manage liquidity.

Former Accountant-General of the federation Jonah Otunla had in January, directed all MDAs to comply with the policy latest by February 28, but many struggle to do so claiming they lacked clear understanding of the policy.

Prior to TSA, Nigeria has fragmented banking arrangements for revenue and payment transactions.

Over10,000 bank accounts were held in multiple banks, which made it impossible to establish government consolidated cash position at any point in time.

This led to pockets of idle cash balances in MDAs’ accounts when government was out, borrowing money to run the economy.

The fragmented banking also affected the government’s ability to undertake efficient cash planning and management as required by the Fiscal Responsibility Act.

Ngozi Okonjo-Iweala, Coordinating Minister for the Economy and minister for finance when it was introduced noted that many of the MDA resisted the idea of the e-collect which the government introduced and the Treasury Single Account (TSA) but added that they need to comply.”

“It has helped us to manage our balances much better. So there is no too much of a choice, everybody has to comply.”

She explained that the TSA is a tool that enables government to see the balances of government from all the various agencies at one time as resources go into the central bank.

“So instead of having agencies with multiple accounts everywhere and you have a situation whereby you have monies lying on several accounts not being used and on the other hand, you are going to borrow, even from ways and means in the central bank, we will now have an overview.”

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