According to Prof. Stephen Ocheni, a Professor of Public Sector Accounting, Kogi State University, it is expected that the implementation of TSA would help tame the tide of corruption in the country.
“Parts of other reforms that were aimed at improving the quality of the nation’s Public Financial Management (PFM) systems are Government Integrated Financial Management Information System (GIFMIS); Automated Accounting Transaction Recording and Reporting System (ATRRS); Integrated Payroll and Personnel Information System (IPPIS); International Public Sector Accounting Standard (IPSAS) and many others.
“The implementation of TSA by the federal government will improve cash management and control. TSA also facilitates better fiscal and monetary policy coordination as well as better reconciliation of fiscal and banking data, which in turn improves the quality of fiscal information. Finally, the establishment of an effective TSA significantly reduces the debt servicing costs and eradicates financial misappropriation in the public sector. It should, therefore, receive priority in any public financial management (PFM) reform agenda.”
Also, a don at the Michael Okpara University of Agriculture Umudike, Abia State, Prof. Michah Chukwuemeka Okafor, expressed optimism that the initiative would help improve fiscal and monetary policy coordination, adding that that Nigeria stands to benefit greatly from the holistic implementation of TSA in the country.
Okafor, a fellow of the Institute of Chartered Accountants of Nigeria (ICAN), said this in a paper, titled: “Full Implementation of Treasury Single Account in Nigeria: Implications on the Economy.”
Commenting on how the policy would affect the banking sector, Okafor said banks’ profiteering on free money was dangerous to Nigeria’s economic growth, saying “our bankers are worried by the absence of free government funds, which makes them look suspect on their activities.”
He outlined benefits of TSA, among which included guarantee of timely information on government cash resources as complete updated balances will be available daily; better appropriation control, as it 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.
But a former Chief Executive Officer of Diamond Bank Plc, Dr. Alex Otti, argued recently that while the intentions behind the TSA are quite laudable, its implementation may continue to a counterproductive effect on the economy.
“I also feel it was implemented at a very inappropriate time. First and foremost, we must look at the economy as a system with different component parts. A weakness in one unit easily becomes a weakness in the entire system. It is like a chain that is as strong as the weakest link.
“You may not like banks (and may be bankers), but they remain the engine of the economy. That is why everywhere in the world, banks are treated with some caution as any negative action naturally would have a spiral effect on the economy. The timing of the withdrawal of public sector funds from banks coincided with when the economy was reeling from drastic fall in oil prices and attendant foreign exchange crisis.
“That was a time when all economic hands needed to be on deck to swim out of the mess we found ourselves. That should not have been the time to take such a drastic action that was capable of sinking some banks,” Otti said while commenting recently on the sanction of nine banks for flouting the TSA rule.
However, Dr. John Danfulani, in a report titled: e-Governance: A Weapon For The Fight Against Corruption In Nigeria,” stressed that the gradual adoption of e-governance has helped the country’s anti – graft body Economic and Financial Crimes Commission (EFCC) in tracking financial fraudsters and international money launderers. This is also complemented with the Bank Verification Number that was introduced by the CBN.
Clearly, the foregoing shows that establishing a unified structure of government bank accounts via the TSA would help improve cash management and control in the country and therefore should continue to be given priority by the government. Finally, the establishment of an effective TSA would in the long run help to significantly reduce the country’s debt servicing costs.
