Why the TSA cannot be faulted
THE decision by the Buhari administration to fully implement the Treasury Single Account (TSA) is a welcome development that should be supported by all right thinking Nigerians if the corruption monster and profligacy that define public office in Nigeria would be curtailed. Only those benefiting from the systemic anomie and financial recklessness may oppose it. The TSA, if well implemented, would be the single most effective measure to fight corruption in Nigeria, not the anti-corruption agencies that are often abused and used for political witch-hunting. The TSA is none discriminatory. It applies equally to all ministries, departments and agencies (MDAs). The TSA will create a situation where there would be little or no money to steal. That way, corruption in public office would be minimised without sweat or going to court.
For the avoidance of doubt, President Muhammadu Buhari is not the architect of this policy. TSA is a constitutional provision that successive administrations in Nigeria refused to implement for whatever reasons. What President Buhari has done is simply to implement this critical constitutional provision meant to streamline government income and expenditures and stem wasteful spending in public offices. TSA is not new. It is an old law that was abandoned but now is being revived in the interest of good governance and the economy. The TSA implementation should be pursued assiduously to achieve its purpose in the constitution.
Section 80 (1) of the 1999 Constitution as amended states, “All revenues, or other money raised or received by the Federation (not being revenues or other moneys payable under this Constitution or any Act of the National Assembly into any other public fund of the Federation established for a specific purpose) shall be paid into and form one Consolidated Revenue Fund of the Federation.”
Section 80 (2) says, “No moneys shall be withdrawn from the Consolidated Revenue Fund of the Federation except to meet expenditure that is charged upon the fund by this Constitution or where the issue of those moneys has been authorized by an Appropriation Act, Supplementary Appropriation Act or an Act passed in pursuance of Section 81 of this Constitution”.
There is no ambiguity in the above constitutional provisions. The constitution requires the collectors of all government funds to pay them into the Federation Account, otherwise known as Treasury Single Account (TSA). There is only one Federation Account. Whereas Nigerians are familiar with the Federation Account, from which their state governors collect money monthly from Abuja, they are not familiar with TSA. That may be the source of the confusion or misunderstanding. People need to be told that the Federation Account and TSA mean the same thing.
But despite the constitutionality of this provision, over the years, successive governments, ministries, departments and agencies continued to operate multiple accounts for the collection and spending of government revenues in flagrant violation of the constitution. The result is that government revenues are frittered away through several dubious, illegal and unknown accounts operated by the chief executives of different government institutions and their associates. It is in a move to block all the leakages through which public funds are frittered away that President Buhari decided to implement the TSA, obviously, to buttress his anti-corruption stance. What is wrong in upholding the constitution?
The process of TSA implementation began in February when the Central Bank of Nigeria (CBN) issued a circular directing all deposit money banks to implement the e-Collection Remita Platform, a technology deployed by the Federal Government to facilitate the collection and remittance of all government revenue into a Consolidated Revenue Account (TSA) domiciled by the CBN.
Consequently, henceforth, all MDAs are expected to remit all their revenue collections into the TSA account through the commercial banks acting as agents. At the close of work each day, the commercial banks must remit all the moneys collected to the TSA at the CBN. The accounts of the MDAs with the commercial banks will have zero balance at the end of each working day.
Besides the TSA main account, there will be other subsidiary accounts or sub-accounts, transaction accounts, impress accounts, etc, maintained for the purposes of funds collection and disbursement. The MDAs will no longer have direct access to the funds in the banks outside their budgets. The TSA has mechanisms for funds disbursement to revenue generating agencies for operational purposes. That brings to an end the era of huge amounts of government money kept in float accounts by the MDAs for selfish reasons. Those are the “free” moneys used by the commercial banks to bolster their operations. The benefits go to the MDAs and the banks and not the public.
The TSA is not altogether new. In 2012, the Jonathan administration experimented on the operation of the TSA using 217 MDAs as test case. The country reportedly saved about N500 billion in frivolous spending by MDAs. Following the success of that scheme, government directed commercial banks to implement the needed technology platform to accommodate all MDAs into the TSA scheme by February, 2015. Therefore, President Buhari’s directive is a follow-up to what was started by the previous administration. Good enough. Government is a continuum.
There are fears in many quarters about the possible implications of the TSA regime. Within the banking sector, the commercial banks, which apparently have been opposed to TSA, would no longer have access to the huge float money provided by the MDAs. It is estimated that commercial banks held about N2.2 trillion of public sector funds at the beginning of quarter 2015. Henceforth, this huge amount would no longer be available to the commercial banks, meaning that some banks may run into cash crunch, except they devise other proactive ways of mobilising funds.
But, come to think of it, is the reported N2.2 trillion not illegal unremitted Federal Government funds deliberately imprisoned in the vaults of the commercial banks? At what point are those funds remitted to the appropriate quarters, if ever? Why should the banks be operating on illegality in the guise of doing good business? Do banks in other climes hold such “free” huge money that is not meant for them? This practice is a major avenue for corruption, which is now being plugged.
The truth is that the banks must now sit up and do their real banking business. Those who think that TSA would lead to layoff in banks may be mistaken. Rather than layoffs, the banks would have to employ more hands to do aggressive marketing of their products to source for deposits. Hitherto, the commercial banks rarely advance loans to the real sector, but with TSA, the banks would have to re-strategize, which would include loan advances to viable private sector concerns. Besides, the high interest on loans from “free money” would be reduced, while the low interest on deposits will increase to attract more. TSA will usher in an era when the banks will cut their coat according to their cloth and do the true banking business. We have got to know who the real bankers are.
There will be accountability. All government income and expenditure will be monitored. Frivolous spending and financial recklessness perpetrated by the MDAs would stop. There will be improved public sector finance management. This has been lacking, yet it is critical to curbing corruption.