John Madayese on Treasury Single Account (TSA) - Copy
1.
2. Table of Content
1. Introduction to Treasury Single Accounts (TSA)
2. Evolution Of Treasury Single Account (TSA):
Historical Background
3. Operation Of TSA in Nigeria, including it’s
Technology Infrastructure
4. Various Types of Bank Accounts under a TSA
System
5. Assessment of TSA in Nigeria (The Potential
Benefits)
6. Issues, Challenges and Solutions Of TSA in
Nigeria
7. Conclusion
4. Meaning
A 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).
5. 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)
6. 2. Evolution Of Treasury
Single Account (TSA):
Historical Background
8. 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.
12. TWO MAJOR STAKEHOLDERS IN TSA
ADMINISTRATION
The 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.
13. 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.
14. 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
15. 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
16. Full Meaning of MDAs:
NCC- Nigerian Communications Commission
NTA- Nigerian Television Authority
NDDC- Niger Delta Development Commission
FIRS- Federal Inland Revenue Service
NNPC- Nigeria National Petroleum Corporation
NAFDAC- National Agency for Food and Drug
Agency and Control
NIMASA- Nigeria Maritime Administration and
Safety Agency
SSS- State Security Service
18. 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
19. TSA Technological Infrastructure
Banks, 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
21. 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.
22. 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 Accounts
7. Transaction Accounts
24. Benefits of TSA:
1. Allows complete and timely information
on government cash resources.
2. Improves appropriation control
3. Improves operational control during
budget execution
4. Enables efficient cash management
5. Reduces bank fees and transaction costs
6. Facilitate efficient payment mechanisms
7. Improves bank reconciliation and quality
of bank’s data.
27. TSA and Corruption
The 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.
28. TSA and Taxation
TSA 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.
29. TSA and Taxation
Hopefully 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)
30. TSA and Policies
TSA 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.
31. TSA and Debt Financing
With 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.
32. TSA and Banking Fees
With 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.
34. THE WAY FORWARD
The 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.
35. THE WAY FORWARD
The 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.
36. Conclusion
A CALL TO ACTION:
We are potential key stakeholders in the
Financial (Private & Public) Service Industry (FSI)
So,
Lets
IMPROVE THE PROCESS !!!
