Proffessor of Accounting at the Michael Okpara University of Agriculture Umudike, Abia State, Michah Chukwuemeka Okafor, has said that implementation of TSA in Nigeria would stop banks from profiteering on free money, which was dangerous to the economy of the country.
The university lecturer further said that it would result in fundamental changes in the country’s economy and lead to better fiscal and monetary policy coordination, advising that Nigeria stood to benefit greatly on the full and holistic implementation of TSA in the country as outlined in the IMF 2010.
Prof Okafor, a fellow of the Institute of Chartered Accountants of Nigeria, said this in a paper titled Full Implementation of Treasury Single Account (TSA) in Nigeria: Implications on the he presented at a public lecture at the Evangel University at Okpoto, Ebonyi State.
He said, “TSA will lead to better fiscal and monetary policy coordination, as better transparency is achieved through reconciliation of fiscal and banking data, which in turn improves the quality of fiscal information and management that will benefit and improve the country’s economy generally, eventually”.
In the banking sector, Prof Okafor said that banks’ profiteering on free money was dangerous to Nigeria’s economic growth; hence the TSA would make the banks to return to real banking. He teased the Nigerian banking sector, saying “Nigerian banks claim to be the best on the continent and have received numerous awards, some are ranked among the 1000 banks globally, yet our bankers are worried by the absence of free government funds, which makes them look suspect on their activities.”
According to the professor of Accounting, implementation of TSA in Nigeria would basically result to fundamental changes in the economy and would help government to unify banking arrangements, guarantee oversight of cash resources, promote efficiency, transparency and accountability in government payments, adding that it would ensure that government has access to funds when needed and reduce overall cost of government borrowing.
Expecting that the new reform initiative of implementing Treasury Single Account (TSA) would restore sanity and prudence in management of financial resources in this country, Prof Okafor considered TSA as a prerequisite for modern cash management and as an effective tool for the ministry of finance/treasury to establish oversight and centralised control over government’s cash resources, bringing about avoidance of borrowing and paying additional interest charges to finance the expenditures of some agencies while other agencies keep idle balances in their bank accounts.
He outlined about nine benefits of TSA, among which are guarantee of timely information on government cash resources as complete updated balances will be available daily; better appropriation control as TSA allows the Ministry of Finance to have full control over budget allocations and strengthens the authority of the budget appropriation; improvement on the operational control during budget execution in an efficient, transparent and reliable manner; ensuring efficient cash management, such as regular monitoring of government cash balances; supports efficient payment mechanisms because there is no ambiguity as to the volume or the location of the government funds, and makes it possible to monitor payment mechanisms.