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TREASURY SINGLE ACCOUNT (TSA) AND ECONOMIC DEVELOPMENT: ISSUES AND CHALLENGES
1.0 BACKGROUND OF STUDY
Treasury Single Account is a public accounting system under which all government revenue, receipts and income are collected into one single account, usually maintained by the country’s bank and all payments done through this account as well. The purpose is primarily to ensure accountability of government revenue, enhance transparency and avoid misapplication of public funds. The maintenance of a treasury single account will help to ensure proper cash management by eliminating idle funds usually left with different commercial banks, and in a way enhance reconciliation of revenue collection and payment (Adedu, 2015).Section 80(I) of the 1999 constitution as amended states; “ All revenues or other money raised or received by the Federation (not being revenues or other money payable under this constitution or any act of National Assembly into any other public fund of the federation established for a specific purpose). Should be paid into and from one consolidated revenue fund of the federation. Successive government have confined to operate multiple accounts for the collection and spending of government revenue in flagrant disregard to the provision of the constitution which requires that all government revenue be remitted into a single account. It was not until 2012 that government ran a pilot scheme for a single account using 217 ministries, department and agencies (MDA) as a test case, the pilot scheme saved Nigeria about 500 billion in frivolous spending. The success of the pilot scheme motivated the government to fully implement TSA, leading to the directives of banks to implement the technology platform that will help accommodate the TSA scheme. The recent directives by President Mohammadu Buhari: that government revenues should be remitted to a treasury single account is in the provision of the 1999 constitution (CBN 2015). The central bank has opened a consolidated revenue account to receive all government revenue and effect payment through this account, this is the treasury single. All ministries department and agencies are expected to remit their revenue collection to this account through the individual commercial banks who act as collected agents. This means that the money deposits banks will continue to maintain revenues collection accounts for ministries, Departments and agencies, but each money collected by this banks will have to be remitted to the CBN at the end of each banking day. In other words ministries, departments and agencies account with money deposits must be zero-sized at the end of every banking day being completing. The implication is that banks will no longer have access to the float provided by the account they maintained for the ministries, departments and agencies, different types of account could be maintained under a treasury single account arrangement and these may include the TSA main accounts subsidy or sub-accounts, transaction account and zero balance account.
Other types of accounts that could be operated include impressing accounts, transit accounts and correspondent account. These accounts are maintained for transaction purpose for funds flowing in and out of the treasury single account (Adedu, 2015). From the foregoing, it is obvious that the primary benefit of a treasury single account is the mechanism it provides for proper monitoring of government receipt and effective expenditure. In the Nigerian case, it will help to block most, if not all the leakages that have been the bone of the growth of the economy. We have a situation where some ministries, departments and agencies manage their finances like an independent empire and renut limited revenue to government treasuries under a properly run treasury single account, this is not possible as agencies of government are meant to spend in the within duly approved budget provisions. The maintenance of a single account for the government will enable the ministries of finance monitor fund flow as no agency of government is allowed to maintain any operational banks accounts outside the oversight of the ministries of finance.
As a matter of fact, deposit money banks stand to lose immensely from the implementation of a treasury single account. This is because of the fact that public sector funds constitute a large chunk of commercial banks deposit indeed it is estimated that commercial banks hold about 2.2 trillion public sector funds at the beginning of sector quarter of 2015. The impact of this account at money leaving the system can be imagined when one considers the fact that each time the monthly federal allocation is released the banking system is casually aroused with liquidity and as soon as this public sector fund dries up, they with drawled by the states, liquidity, fights again with later bank rates going up of major impacts will be the movement of funds at revenue-generating parastatals such as the NNPC out of commercial banks.