The Treasury Single Account (TSA) policy makes headlines on our news pages and social networks every day, but this is one instance where quantity doesn’t exactly represent fact. After all, most of what I read revolves around how the policy is stifling growth, delaying salaries and setting back Nigeria’s progress. But funny enough, most of these critics also advocate a change in public policy, changes that can instill discipline and accountability in Nigeria’s financial system. How ironic is that?
Granted, government makes anti-people policies most of the time, but I’m not sure the TSA is one of them. It just happens to be a policy adopted when the price of crude oil on the international market is dwindling and Nigeria has not diversified its revenue sources enough to avoid feeling the pinch. Just last week, the Federal Government announced it had recovered N4.3 trillion of its cash assets since it adopted the policy. Surely, that cannot be a bad development. Even better, it denies government the ready excuse that it lacks the financial wherewithal to run the economy.
But that is an issue for another day. I thought it wise to correct the impression that TSA is some fly-by-night policy that is peculiar to Nigeria. On the contrary, 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 Gen. 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.
Source: The Nation
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