16 months after: 16 benefits of Buhari’s Treasury Single Account [LIST]

When the administration of President Muhammadu Buhari announced it would implement the Treasury Single Account (TSA) policy immediately after the government came into power, many Nigerians doubted the policy will make any difference in the nation.

The government went on to initiate the policy despite pockets of protests from various stakeholders and some economic analysts.

President Buhari kick-started the TSA policy last year

A year and four months after the process started, social commentator Jubril Gawat writes on the gains of the TSA.

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Read below:

1. 17,000 commercial bank accounts operated at 0% interest rate discovered and now closed

For the first time in a long run, the federal government could know where its funds held by various MDAs were kept…at 0% interest rate. All these accounts have now been closed and the balances moved to the CBN for effective control and management by Government.

2. FG also discovered spurious accounts operated in its name

Quite a number of the 17,000 accounts operated on behalf of the FG were fictitious – only opened in the name of government but operated by private entities, to government’s detriment. As the government lost out, so did the common Nigerian.

3. As at the last count, over N3 trillion of FG’s money has been saved into TSA

According to high-ranking officials of federal government, especially the Ministry of Finance and the CBN, more than N3 trillion has been mopped up from the over 17,000 bank accounts formerly maintained by MDAs in commercial banks.

4. Government can plan better for the people

A government unable to stay atop its finance can do little or nothing for serve the electorate as it ought to. Unlike ever before in the history of Nigeria, Government is now aware of how much it has per time and can plan better for the citizenry and, of course, has more funds to implement such plans.

5. Civil servants and bankers can no longer “chop” 10% and more of interest on government funds

While Government earned 0% interest rate on funds in commercial banks, permanent secretaries, directors of finance, certain bank officials and other key officers were busy collecting a minimum of 10% interests on these funds.

This made them super-rich civil servants and employees with property sprawling all over the choicest parts of the country, while the average Nigerian is left to languish. Are you surprised that many of them with pitiable salaries could send four or more children to foreign schools at the same time? No longer will a select few enrich themselves on the sweat of an entire nation!

6. Government will not borrow its own money anymore

Are you surprised or just can’t understand it? Let me break it down for you. Before TSA, all MDAs collected their budget allocations and stashed in their own names in different commercial banks. This meant that while one MDA could have funds, another who did not have and needed to money urgently had to borrow from commercial banks at ridiculous commercial rates – almost always at over 20% interest! Guess what?

The funds lent to the MDA in need are from what another MDA has kept with the same bank. The cycle was endless, with the Federal Government being the only loser. TSA has however brought an end to this sickening evil.

7. Government now has a single full control of all its funds at any point in time

TSA is a case of government money in government bank, controlled by government people. Since the CBN cannot in reality become bankrupt like the other banks, government money is safe and can be monitored and accounted for 24/7. No one can carry out any transaction again behind government’s back.

8. Government money is secure

Because all funds of the federal government are kept with the Central Bank of Nigeria, which is the Bankers’ Bank and suffers no risk of bankruptcy, Government is assured that its funds are safe, unlike before when they were kept with commercial banks, where they were subject to loss as a result of possible bankruptcy.

By the way, nobody has told us how much of government funds have been lost to distressed commercial bank in the past. With TSA, not again!

9. 100% online real-time banking for MDAs – No cheques anymore!

Can you believe that, with TSA, MDAs no longer write cheques? One of the implications of this is that government Ministries, Departments, and Agencies would deal less and less with cash. They are all connected directly to CBN.

10. Payers of government are not restrained with payment channels and modes

With TSA, making payments to the federal government is at its easiest level ever! Government can receive payments via numerous channels, not only at commercial and microfinance banks, but also via other channels like POS terminals, debit/credit cards, online banking sites, digital wallets, among others.

11. Government can earn more income

Owing to the increase in the channels through which payments can be made into the TSA, the federal government can earn income round the clock, and can conduct banking services 24/7, even on weekends!

12. Government contractors have to fulfil their contracts on time

With e-payment which is integral to TSA, suppliers and contractors of Government now get paid much faster than before and nobody has to wait for cheques to clear before getting out money. This way, contractors have no more excuses for late execution of contracts – this also reduces the corruption that goes with government contracts.

13. Centralised accounting and auditing of all government transactions

If you have ever wondered why TSA is under so much attack by some “special civil servants”, bankers and their other cohorts, you need not look any further. This is the single reason: with TSA, all payments into any commercial, microfinance or mortgage banks can be traced right from when the payment is approved, who approved it, what the payment is for, when it was paid, it if was taxed, and so on.

14. Monitoring of compliance with budgetary allocation

With TSA, FG can tell which of its agencies are compliant with its budgetary allocations and which ones are not. Government is able to tell which sectors of the economy is faring well and which are not, and be able to determine the fiscal actions to remedy negative situations.

15. Empowerment and promotion of local IT capacity and retention of funds within the local economy

Years ago, who would have believed that a Nigerian IT firm would create a software solution capable of carrying the burden of an entire nation and spearheading the leap from regression into the promising future of ICT solutions? But that is what SystemSpecs, the owner of Remita, the indigenous software used for TSA, has done.

This is enough proof that there are even more potentials that can be harnessed in Nigeria. The federal government has, however, not paid the firm and commercial banks that drive the TSA the agreed collection fee.

16. Entrenchment of federal government’s e-Payment policy and acceleration of financial inclusion

The future is not in cash payment; it is in e-payments. And the whole world is fast advancing towards this transformation. With TSA, Nigeria can beat her chest as being among the progressive nations of the world that have embraced electronic payments, the future.

The article first appeared on The Cable.

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