Amidst reports surrounding the Treasury Single Account (TSA) shut down, a Fintech expert has provided more insights with regard to guidelines issued by the Ministry of Finance, which prompted the virile misinformation.
According to a fintech expert, Epa Steven, the guidelines by the ministry seek to invoke a strategic evolution, precisely aimed at refining the system for even greater efficiency.
Stephen, while citing the circular signed and released on December 28th, 2023, by the minister of Finance and coordinating minister of the Economy, explained that, the new guidelines were issued for immediate compliance by all Federal Government Agencies and Parastatals for the collection, utilisation, and remittances of Internally Generated Revenue (IGR).
In his analysis shared with LEADERSHIP, he said, the guidelines have been mischievously and wrongly reported as a shutdown of TSA, which is regarded as Africa’s largest and most successful TSA initiative.
Our correspondent reports that the Treasury Single Account, commonly known as TSA, was introduced by the Goodluck Jonathan administration in 2012 and fully implemented by the Buhari administration in 2015. It mandates all Federal Ministries, Departments, and Agencies (MDAs) in Nigeria to keep and expend all funds solely from the Consolidated Revenue Fund (CRF) maintained at the Central Bank.
The TSA, which is a centralised bank account structure, is designed to provide the government with full and unhindered access to its funds at all times, real-time tracking of all outflows and inflows from a single point, and eliminate the need for short-term borrowing from commercial banks at high-interest rates by different MDAs in an uncoordinated manner.
The Bureau of Public Service Reforms (BPSR) reports that the implementation of TSA has saved the government over N10 trillion since its inception.
Also, the EFCC, ICPC, and other investigative agencies have also found the TSA of immense benefits in investigating suspected cases of corruption, fraud, or outright theft of government funds.
Previously, different MDAs would borrow money from commercial banks at exorbitant rates to cover budget deficits, while other MDAs had idle funds in separate accounts, thus the TSA has eliminated this extremely inefficient practice that has cost the government huge losses, leading to substantial savings for the federal government.
The former minister of Finance, Budget, and National Planning, Zainab Ahmed, estimates that TSA saves Nigeria N45 billion in interest payments monthly.
The latest circular by the ministry of Finance only stipulates a review of a component of the TSA and this is not the first circular that would be issued on review of TSA operations and certainly will not be the last as the government continues to respond to issues in the management of its finances under the TSA initiative.
According to Stephen, the December 28, 2023, preserves the TSA in all ramifications and has removed nothing from it, as can be seen by anyone who is familiar with the workings of the TSA.
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