Transfer MDAs’ Deposits in Your Custody to TSA or Face Anti-graft Agencies, FG Warns Banks

Ndubuisi Francis in Abuja

The federal government has warned commercial banks still holding on to public sector funds to immediately lodge such deposits into the Treasury Single Account (TSA) or face the anti-graft agencies.

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed who issued the warning while inaugurating the reconstituted TSA implementation structures in Abuja Tuesday, said the government was compiling the list of affected banks and ministries, departments and agencies (MDAs) for submission to anti-corruption agencies for enforcement.

According to the minister, a post-implementation compliance exercise to determine the extent to which MDAs and banks complied with the Presidential directive on TSA issued on August 7, 2015.

Ahmed stated: “In 2018, we conducted a post-implementation compliance exercise to determine the extent to which MDAs and Deposit Money Banks complied with the Presidential directive on TSA of 7th August, 2015. The finding was that huge amounts of public funds were still trapped in commercial banks.

“It has been reported that the banks have not been co-operating with the consultants assigned to sweep these funds to the TSA. I therefore take this opportunity to call on the affected banks to transfer all remaining balances in the accounts of federal government owned MDAs in their custody without express exemption to the TSA.

“We are compiling the list of affected banks and MDAs for submission to anti-corruption agencies for enforcement. For the avoidance of doubt, except for selected accounts of NNPC and WAEC, no other MDA or fund of federal government is exempted from the TSA.

“If in doubt about the status of any account of federal government’s MDA in your custody, re-confirm from the Office of the Accountant-General of the Federation.”

She disclosed that the impact of TSA on government’s internally generated revenue performance had been impressive.

She stated that using the TSA platform, the government had since automated direct deduction of operating surplus of eligible agencies, adding that at the last count, 16 agencies were covered and more will be added in the coming months.

“Between January and October 2021, a total of N86 billion in revenue was generated through this means.

Aggregate collection of N7 trillion was made from 22 million transactions between January and November, 2021while N19 trillion worth of payments were processed from 20 million transactions within the same period.

“This goes to show the enormous volume of transactions processed on the TSA platform and the need to leverage on the onboarding of additional PSSPs to reduce the cost of collection which is currently N150 per transaction.

“Government is of the opinion that there is sufficient room for reduction in cost of collection to no more than N50 per transaction. I strongly believe that given the volume of transactions, N50 per transaction is fair consideration for collection services,” she noted.

The minister stated that from inception, the federal government set out to be transparent and to provide a level-playing field for all participants in the TSA implementation.

Ahmed added that it was in line with this that, although there was a selective collecting bank approach as was popular then, the collecting service had been opened to all licensed DMBs.

“For this reason, there is no need for any bank to apply or lobby to participate in TSA collection and payment.

Participation of more than one Payment System Service Provider (PSSP) was however a challenge at the time.

“The Government Integrated Financial Management Information System (GIFMIS) which was the first TSA management application was designed to interface with T-24, the CBN core banking application through a single payment gateway.

“The original intention was to use Real Time Gross Settlement system (RTGS) to be provided by the Central Bank of Nigeria (CBN). Unable to provide the service at the time, CBN opted for SystemSpecs/Remita after a rigorous competitive procurement process,” the minister said.

She observed that initial constraint ultimately paved way for Remita to become the dominant TSA PSSP.

According to her, notwithstanding the obvious constraint, government insisted that other service providers should be accommodated in the TSA collection process provided they are integrated with Remita.

She added: “The reason is that without such integration, it would be difficult to keep track of transactions in diverse, stand-alone collection applications.

“This singular act, innocuous at the time and borne out of our desire to do the right thing has unfortunately been misunderstood, generated too much controversy and become a source of needless distraction for everyone.”

The minister explained that through the work of the committees being inaugurated it was expected to finally open the TSA to multiple service providers to put an end to the agitations and discontent of the past.

Ahmed stressed that of all reforms of the government, the TSA is arguably the most popular, both locally and internationally, adding that as a public trust, Nigerians of all works of life monitor its progress and voluntarily report observed non-compliance to appropriate quarters.

“Internationally, it is recognised as one the most successful public financial management reforms out of Africa, noting that this recognition is attested to by the bilateral co-operation Nigeria entered with other countries to share experience with them as they implement similar reforms in their countries.

“Our TSA experience has been a pleasant one. The centralisation of our banking arrangement has made it easier to determine government cash balances, reduce cost of borrowing, enhance liquidity, block leakages and improve internally generated revenue performance.

“As a work in progress, we are aware that there remains more to be done. We intend to harness the diverse and rich expertise of the distinguished and accomplished members of the Committees to further improve the TSA for greater benefit to our country and people,” the finance minister pointed out.

But the minister noted that government was aware of the challenges MDAs had been facing since early December, 2020, with respect to access to TSA bank statement and creation of service types for collection.

She, therefore called on the Inter-Ministerial TSA Implementation Committee to prioritise solution to these challenges so that MDAs can reconcile and prepare their end-of-year financial statements in good time.

“In line with our desire for ICT-driven processes, we charge the Committee to ensure that the solution is one that enables MDAs to access detailed bank statements online and on-demand while at the same granting unfettered online and on-demand access to all MDA TSA bank statements to the Treasury.

“Let me remind the Inter-Ministerial Committee of the need for mutual co-operation and respectful engagement in the course of their assignment.

“It is only by working harmoniously with each other that you will be able to deliver on the critical task before you within the three-month timeline given to you. We put our trust in you and will give you all necessary support to deliver,” the minister said.

Members of newly-inaugurated TSA supervisory board are the Minister of Finance, Budget and National Planning as chairman and the Accountant-General of the Federation as deputy chairman.

Other members are the Deputy Governor (Operations), Central Bank of Nigeria; Director-General, Debt Management Office; representative of the Secretary to the Government of the Federation; Chairman, Federal Inland Revenue Service ; Chief Financial Officer, NNPC; Director-General, Bureau for Public Service Reforms; Auditor-General for the Federation and the

Director, Treasury Single Accounts, Office of the Accountant General of the Federation (OAGF) as secretary of the committee.