By Pamela Johnson
The Treasury Single Account (TSA) policy has taken a dominated public space since it was adopted, but not always for the best of reasons.
Suddenly, every problem under the sun is attributed to the policy and how much it is stifling the liquidity of funds in the public and private sectors. Individuals blame the TSA for their job losses, banks for their low deposits, while government functionaries and universities claim it whittles down their autonomy and access to funds meant for the execution of projects.
I may not agree with the government’s policies most of the time, but I cannot in good conscience fault the adoption of this policy. In fact, I feel it is the only solution to the rot that financial management in our public sector has become. If nothing else convinces me, the federal government’s recovery of trillions of its cash assets since the policy was adopted does.
Lest we forget, these idle funds were yielding interest for banks and faceless individuals all this time, while the government was starved of funds for projects of national importance. I can’t stand against a policy that reverses that ugly trend, however procedural and painstaking it may be.
But that is not what is at issue here. Contrary to what many think, the TSA is not some fly-by-night policy that we can all write off as peculiar to Nigeria. The policy has also been adopted by several developing nations in Africa that wish to instill a culture of probity and accountability in their financial systems. Take Rwanda for instance. In 2005, it adopted a zero-balance drawing system which requires that its ministries and budget agencies’ accounts are held in the National Bank of Rwanda. The policy stipulates that all ministries and budget agencies begin a new fiscal year with zero cash balance on their accounts.
Thus, cash transfers are made from the treasury to the ministries’ accounts monthly, and the financial transactions they (ministries) make are restricted to their allocations for the month. To make the policy more foolproof, daily checks are conducted to ensure that whatever funds left at the close of business are transferred to the Treasury for re-issue the following day to drive transparency.
Uganda adopted its TSA policy in 2013 in accordance with section 4 (1) of its Public Finance and Accountability Act (2003) which states that “the Minister responsible for Finance is responsible for maintaining transparent systems which, among others, ensures the efficient and cost effective cash management of the Consolidated Fund, any other fund established under the Act and other public moneys.” The policy in Uganda started out aggregating all government cash balances into a set of linked bank accounts, with the long-term plan being a single bank account where all revenues would flow from and payments made. Before the adoption of the policy, the country’s MDAs operated over 2000 accounts which were dormant and became a breeding ground for corruption and misappropriation of public funds.
Last year, Kenya announced its proposed adoption of a TSA policy in reaction to the loss of billions of dollars in its public system. Its earlier Integrated Financial Management Information System (IFMIS) had proved ineffective in waging and winning this war, much like previous financial management systems had failed to curb corruption in the Nigerian public sector. Thanks to its TSA policy, Kenya proposed National Treasury and County Treasury Single Accounts, which would both be housed at the Central Bank of Kenya and align with the government’s renewed technological focus.
So rather than flay the General Muhammadu Buhari administration’s adoption of TSA based on hearsay, I think we should all do some research and have more informed opinions about the policy. So far, the TSA has returned N4.3 trillion into government coffers. As disclosed by the Accountant General of the Federation Alhaji Ahmed Idris earlier last week, the policy has reduced inflation and reversed the loss of a whopping N70 billion to failed banks in 2011 when it was not in force.
Indeed, government needs to sensitise the public on why the TSA is the only choice for any forward-looking African country in the 21st century. More importantly, it is not enough for government to deposit these funds into the TSA and reel out how much we are recovering every quarter. We also need to see how these funds are put to work and make a difference in life as we have always known it as Nigerians.
*Johnson is a Lagos-based financial analyst