john madayese on treasury single account (tsa) - copy
TRANSCRIPT
IMPLEMENTATION OF TREASURY SINGLE
ACCOUNT (TSA) IN NIGERIA: ISSUES AND CHALLENGES
ByMADAYESE, JOHN OLUWASHOLA
Table of Content1. Introduction to Treasury Single
Accounts (TSA)2. Evolution Of Treasury Single Account
(TSA): Historical Background3. Operation Of TSA in Nigeria, including
it’s Technology Infrastructure4. Various Types of Bank Accounts under a
TSA System5. Assessment of TSA in Nigeria (The
Potential Benefits)6. Issues, Challenges and Solutions Of TSA
in Nigeria7. Conclusion
1. Introduction to Treasury Single Accounts (TSA)
MeaningA Treasury Single Account (TSA) is a
network of subsidiary accounts all linked to a main account such that, transactions are effected in the subsidiary accounts but
closing balances on these subsidiary accounts are transferred to the main
account, at the end of each business day. With the implementation of TSA, MDAs will maintain their individual accounts with the commercial banks, but daily
funding of their disbursements are made from the main account, which is resident
with the CBN, just as their closing balances at the end of day are transferred
to the main account (Chukwu, 2015).
Treasury Single Account (TSA) is a financial system that became fully
effective in Nigeria in the third quarter of the year 2015. However,
the system was not a new concept as at this time of overt enforcement by
President Muhammadu Buhari (PMB)
2. Evolution Of Treasury Single Account (TSA):
Historical Background
Adopted for decades in many countries like:Developed: Developing:
Evolution in Nigeria:
Section 80 (1) of the 1999 Constitution recognises that all government revenues should be paid into a single account but successive governments have continued to operate multiple accounts for the collection and
spending of government revenue which is a disregard to
Constitutional Provisions.
Evolution in Nigeria:
Not implemented
Not implemented
Initiated (2012 Pilot Scheme)
Implemented (September 2015)
3. Operation Of TSA in Nigeria, including
it’s Technology Infrastructure
TWO MAJOR STAKEHOLDERS IN TSA ADMINISTRATION
TWO MAJOR STAKEHOLDERS IN TSA ADMINISTRATIONThe maintenance of
a single account for government will
enable the Ministry of Finance monitor
fund flow as no agency of
government is allowed to maintain
any operational bank account outside the
oversight of the ministry of finance.
TWO MAJOR STAKEHOLDERS IN TSA ADMINISTRATION
All monies collected by
these banks will have to be
remitted to the Consolidated
Revenue Accounts with the CBN at the
end of each banking day.
The TSA Story (Illustration)Mr Charles Business Empire: 8 Children and 2 Wives= 10 Units
FAMILY HEAD ACCOUNT
Children 1
Children 2
Children 3
Children 4
Wife 1
Children 5
Children 6
Children 7
Children 8
Wife 2
How TSA really works: The Nigerian TSA Framework (Sample)
Treasury Single Account (TSA)
NCC NTA NDDC FIRS
Ministry A
NNPC NACETEM
NIMASA SSS
Ministry B
Full Meaning of MDAs:NCC- Nigerian Communications
CommissionNTA- Nigerian Television AuthorityNDDC- Niger Delta Development
CommissionFIRS- Federal Inland Revenue ServiceNNPC- Nigeria National Petroleum
Corporation NAFDAC- National Agency for Food and
Drug Agency and ControlNIMASA- Nigeria Maritime
Administration and Safety AgencySSS- State Security Service
TSA Technological Infrastructure
TSA Technological Infrastructure
Remita is the electronic payment or technology platform adopted for TSA. It is deployed by the
Federal Government to support the collection and remittance of
all government revenue to a Consolidated Revenue Fund
Account (CRF Account) domiciled with
the CBN
TSA Technological InfrastructureBanks, and other payment
platforms are all part of the transaction value chain. These include; banks, debit or credit card processors, POS terminal
providers, mobile wallet platform owners, switching platform
owners, and payment gateway technology providers.
The 2.5 Trillion / 25 Billion Explanation
4. Various Types of Bank Accounts under
a TSA System
Bank Accounts in a TSA System
1. TSA Main Account: This is where all cash balances are daily swept into.
2. TSA Sub-Accounts: Grouping together a set of transactions in the TSA
3. Zero-balance Accounts: Such accounts are opened with the commercial banks
4. Imprest Accounts: Holding cash up to maximum authorised amount and are recouped from time to time.
Bank Accounts in a TSA System
5. Correspondent Accounts: The correspondent entity has real time information on the balances it maintains in the TSA.
Others are:6. Transit Accounts7. Transaction Accounts
5. Assessment of TSA in Nigeria (The
Potential Benefits)
Benefits of TSA:1. Allows complete and timely
information on government cash resources.
2. Improves appropriation control3. Improves operational control
during budget execution4. Enables efficient cash management5. Reduces bank fees and transaction
costs6. Facilitate efficient payment
mechanisms7. Improves bank reconciliation and
quality of bank’s data.
Benefits of TSA:8. Lowers liquidity reserve needs
6. Issues, Challenges and Solutions Of TSA
in Nigeria
TSA and CorruptionThe Federal Government officially
commenced the operation of a Treasury Single Account on Monday, 17th of
September 2015. This effectively moved about N1.2 trillion from Nigerian Banks to the Central Bank of Nigeria. For most Nigerians, this decision is a bold attempt
at stifling corruption and ensuring government revenue is effectively
mobilised and monitored. However, the TSA does have well documented
advantages and have been implemented in so many countries around the world.
TSA and TaxationTSA should prevent delays in reconciling
taxpayers’ accounts which historically has been the case where taxes paid by
companies are not remitted promptly to tax authorities or the authorities do not have visibility on collections to update
taxpayers’ records. This leads to delays in obtaining tax credits or even tax
clearance certificates. Each day, all banks involved in revenue collection should
remit taxes collected to the tax authorities’ accounts linked to TSA and
provide information to the tax authorities to update taxpayers’ records.
TSA and TaxationHopefully once the ongoing
implementation of electronic tax filing system is fully implemented, this process should happen automatically with little
or no human intervention (Oyedele, 2015)
TSA and PoliciesTSA should lead to better fiscal
and monetary policy coordination as better
transparency is achieved through reconciliation of fiscal
and banking data which in turn improves the quality of
fiscal information.
TSA and Debt FinancingWith the adoption of the TSA,
government will borrow less and therefore the debt servicing cost should reduce by a large percent,
probably less that half of the current level. It is also likely that
a lot of funds previously unaccounted for will be
uncovered. Kaduna State for instance discovered as much as N 24, 000,000,000 in 2015 through
the adoption of TSA.
TSA and Banking FeesWith the adoption of the TSA,
government will borrow less and therefore the debt servicing cost should reduce by a large percent,
probably less that half of the current level. It is also likely that
a lot of funds previously unaccounted for will be
uncovered. Kaduna State for instance discovered as much as N 24, 000,000,000 in 2015 through
the adoption of TSA.
THE WAY FORWARD
THE WAY FORWARDThe appropriate authorities will have to now embrace transparency and accountability more than ever before.
Legal framework should be reviewed and amended where necessary.
Training should be provided to relevant staff of the Central Bank and MDAs to ensure effective and efficient implementation.
THE WAY FORWARDThe liquidity impact on this financial system should be controlled by ensuring an orderly migration of cash balances from the commercial bank accounts to the TSA and complemented with monetary policy measures.
Conclusion A CALL TO ACTION:
We are potential key stakeholders in the Financial (Private & Public) Service Industry (FSI)So,
Lets
IMPROVE THE PROCESS !!!
