Expdonaloaded News; How Treasury Single Account (TSA) may effect economy

On Sunday, August 9, 2015 President Muhammadu Buhari directed all the Ministries, Departments and Agencies (MDAs) to close all their accounts domiciled in the commercial banks and transfer them to the federation account.President Goodluck Jonathan had given the same directive in January with February 28, 2015 as the deadline but he was ignored by the agencies and he didn’t sanction them.
The CBN circular in Jonathan’s administration read:  “In a circular to all deposit money banks the Central Bank of Nigeria announced the commencement of Federal Government Independent Revenue e-collection scheme. The scheme will automate revenue collection of all Ministries, Departments and Agencies (MDAs) directly into the Consolidated Revenue Fund account at the CBN.
Consequently, all deposit money banks have been directed to install the approved technology, the Remita e-Collection Platform and other electronic payment channels across their branches and sensitized their staff on the scheme.
So,  the Office of the Accountant General of the Federation has given directives to MDAs to close existing revenue account in deposit money banks on or before February 28, 2015 and transfer balances in such accounts to the Consolidated Revenue Fund account with the CBN.
The Independent Revenue e-Collection Scheme is implemented under Treasury Single Account (TSA) initiative, which requires that government revenue collection is put into a single account for proper cash management. The idea of TSA was mooted by the Central Bank of Nigeria at the 235th Monetary Policy Committee Meeting in November 2013.
Treasury Single Account has become a useful model governments use to establish centralized control over its revenue through effective cash management. It enhances accountability and enables government to know how much is accruing to it on a daily basis. In the case of Nigeria, it is expected that the implementation of TSA will help tame the tide of corruption” the circular, said.
However, Jonathan, maybe having re-election plans upper in his mind, could not insist on the implementation.
Expectedly, as soon as Buhari gave the directive, MDAs complied even before August 11 deadline given to them  by the Government.
According to the directive, the measure was aimed at promoting  transparency and facilitating compliance with sections 80 and 162 of the 1999 Constitution.
So, in a statement on August 9, the Senior Special Assistant to the Vice President on‎ Media and Publicity, Mr. Laolu Akande, directed all receipts due to the federal government or any of its agencies to  be paid into TSA or designated accounts maintained and operated in the Central Bank of Nigeria (CBN), except otherwise expressly approved.
The directive applies to fully funded organs of government like the Ministries, Departments, Agencies and foreign missions, as well as the partially funded ones, like teaching hospitals, medical centres, federal tertiary institutions, etc.
Agencies like the CBN, SEC, CAC, NPA, NCC, FAAN, NCAA, NIMASA, NDIC, NSC, NNPC, FIRS, NCS, MMSD, DPR are also affected.
The directive further stated that for any agency that is fully or partially self-funding, sub-accounts linked to TSA are to be maintained at CBN and the accounting system will be configured to allow them access to funds based on their approved budgetary provisions.
The directive was promptly complied with by all the agencies even before the August 11 deadline without exemptions. Earlier, it was speculated that agencies like the CBN and Nigerian National Petroleum Corporation (NNPC) were exempted from the TSA but the rumour was discountenanced by the.
Confirming their inclusion, the Permanent Secretary, Federal Ministry of Finance, Mrs. Anastasia Daniel-Nwobia said that all agencies of government, including the CBN and NNPC are all affected by the directive.
“The position of the constitution is that all revenues is supposed to go into the federation account. Before now all agencies were allowed to generate revenue, use part of it to fund their operations and then remit the operating surplus to the federation account. But this act is a further confirmation of the federal government’s resolve that the provision of the constitution must be adhered to. And with all revenues going into a single treasury account, government will have an overview of the money it has in its account and better plan its expenditure. So, the leakages that used to be there in the system where people used money as they want and decide what to return to the government will no more be there. So, there is a better control and management of government revenue,.” she said.
The implementation of this policy has received pleasant commentaries from Nigerians. Some of the have said that it takes a corrupt-free organizations to do this because Jonathan administration whose hands were marred with corruption lacked the gumption to implement it because that would have exposed so many hidden things.
But a Deputy Director in NDIC, Mr. Ekechi, disagreed, saying that the last administration was  at the point of developing the initiative before it exited.  So, it was not the creation of the new administration.
“As we speak now, the methodology is not clear. The process is not released for it. Government is a continuum. What we are experiencing is a continuation of the policy initiative to the government,” he said.
Mr. Odilim Enwegbara, a development economist, sharply disagreed with him, saying that the reason MDAs ignored President Jonathan’s order on TSA was because he was bent on being re-elected and so implementing it will jeopardize the business interest of his sponsors and so affect his presidential ambition negatively.