Disadvantages of Treasury Single Account (TSA) in Nigeria
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In 2015, the Federal government under the administration of President
Muhammadu Buhari mandated the full implementation of the TSA which is
the Treasury Single Account. This is a public accounting system with
the aim of managing all government revenue and payments through a
single bank account or a set of linked accounts. The TSA was initially
introduced in 2012 as a trial project under the administration of
President Goodluck Jonathan. However, it began full operation in 2015
with the administration of President Muhammadu Buhari. The TSA policy
covers all of the existing Ministries, Departments, and Agencies
(often referred to as MDAs) except companies in the oil and gas
industry and other joint venture partners’ accounts. The major
reason the TSA was introduced is to battle corruption in the country.
The Treasury Single account aids transparency since all government
payments are made into one account.
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Disadvantages of Treasury Single Account (TSA) in Nigeria
The order of the implementation of TSA marks the start of all revenues
of Ministries, Departments, and agencies being withdrawn from whatever
account they are in commercial banks into a unified account maintained
by the Central Bank of Nigeria (CBN).
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Many have argued that the payment of government revenue into multiple
bank accounts operated by MDAs in commercial banks, which was the
practice before TSA was clearly against the Nigerian Constitution
which directed that all federally-collected revenues should be paid
into the Federation Account. Many describe this as another evidence of
breach of the law and the deep corruption in the nation.
The establishment of the TSA has its advantages to the Nigerian
economy such as helping the Nigerian Government has a stronger hold of
its finances. Since the government now knows the exact money it has,
it can plan and execute plans using the money for the betterment of
the Nigerian citizens. Also, whatever money belongs to the Federal
Government is now under its full control and is also assured of being
more secured since it is operated by the Central Bank of Nigeria. The
Central Bank of Nigeria is one of the most infallible financial
institutions in the country. Hence, the government’s money is safe,
accessible, and secure. It is now possible to audit all government
transactions since it is all in one place. However, whatever it is
that has an advantage will also come with its disadvantage. This
article is about the disadvantages of a Treasury Single Account. Read
on below:The inclusion of public corporations in the TSA might
misstate the boundaries between the public and government sectors.
This can result into limitations of public corporations. These
corporations might lose their autonomy in a bid to introduce
strategies that are commercially oriented. A public corporation that
may seriously suffer from loss of independence is tertiary
institutions. Many universities in fact opposed the inclusion of
tertiary institutions in the TSA. The Committee of Vice-Chancellors of
Federal Universities had a meeting with the Accountant General of the
Federation where they argued that by means of the operations and
services rendered by Federal universities, it should not be regarded
as public services or revenue-generating organizations. The committee
argued that including Federal universities in TSA might negatively
affect the smooth running and operations of the institutions since
government allocations are barely enough to cater to the needs of the
institutions. Sometimes, universities collect third party funds for
the provision of services and such functions as this many be disrupted
on account of the implementation of TSA. However, the Accountant
General assured them this would not be the case.
(adsbygoogle = window.adsbygoogle || []).push({});The implementation
of the Treasury Single Account would adversely affect liquidity in the
banking system. This is because of a surge in money market rates
because MDA’s withdrew their funds from commercial banks. This will
in turn affect small business owners who are in need of loans and
capital for their business. When ministries withdrew their funds from
commercial banks, banks then place high-interest plans on the little
left which the public will borrow from. Hence, it is the average
Nigerian, such as the small business owners and traders that will
suffer. Many experts conclude that this will lead to the death of many
small-scale businesses and to an increase in the level of
unemployment.
When the TSA was initially implemented, there was difficulty in
releasing funds to MDA’s for their operations. Many have argued that
the TSA comes with a financial system that has not been used earlier,
e-finance and this may affect the effectiveness of the policy.
Another challenge with the implementation of the TSA is the ignorance
of many Nigerians. Many do not understand the efficiency and
effectiveness of this policy. Some claim it is another means to aid
corruption by the government. For example, Dino Melaye, a Nigerian
senator raised a motion that the operation of the treasury single
account (TSA) should be investigated for possible corruption. He
claimed that the appointment of REMITA, an e-collection agent, is a
gross violation of the law. He also claimed that the constitution only
recognises a banking institution as the collector of government funds
and Remita was not a bank. However, the management of System Specs who
developed Remita refuted the claim of it being used as a tool for
embezzlement and explained that Remita is not an agency but an
application or software used for facilitating payment of government
revenue from other government agencies to a TSA controlled by the
Central Bank of Nigeria.
Advocates of the TSA policy argue that it will encourage integrity in
how public funds are managed by the government and her agencies. It
will remove the secrecy of government organizations in the management
of funds. It will also expose the revenue-generating agencies that
have been depriving the federal government of its money through
multiple bank accounts. Altogether, there will be overall efficient
management of public funds which will lead to a better economy. When
you consider the situation of Nigeria where corruption has been a
major menace causing havoc to our economy, we need every and any
system that can foster transparency and accountability. In light of
this, the Treasury Single Account might just be the best way to go.
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In 2015, the Federal government under the administration of President
Muhammadu Buhari mandated the full implementation of the TSA which is
the Treasury Single Account. This is a public accounting system with
the aim of managing all government revenue and payments through a
single bank account or a set of linked accounts. The TSA was initially
introduced in 2012 as a trial project under the administration of
President Goodluck Jonathan. However, it began full operation in 2015
with the administration of President Muhammadu Buhari. The TSA policy
covers all of the existing Ministries, Departments, and Agencies
(often referred to as MDAs) except companies in the oil and gas
industry and other joint venture partners’ accounts. The major
reason the TSA was introduced is to battle corruption in the country.
The Treasury Single account aids transparency since all government
payments are made into one account.
(adsbygoogle = window.adsbygoogle || []).push({});
Disadvantages of Treasury Single Account (TSA) in Nigeria
The order of the implementation of TSA marks the start of all revenues
of Ministries, Departments, and agencies being withdrawn from whatever
account they are in commercial banks into a unified account maintained
by the Central Bank of Nigeria (CBN).
(adsbygoogle = window.adsbygoogle || []).push({});
Many have argued that the payment of government revenue into multiple
bank accounts operated by MDAs in commercial banks, which was the
practice before TSA was clearly against the Nigerian Constitution
which directed that all federally-collected revenues should be paid
into the Federation Account. Many describe this as another evidence of
breach of the law and the deep corruption in the nation.
The establishment of the TSA has its advantages to the Nigerian
economy such as helping the Nigerian Government has a stronger hold of
its finances. Since the government now knows the exact money it has,
it can plan and execute plans using the money for the betterment of
the Nigerian citizens. Also, whatever money belongs to the Federal
Government is now under its full control and is also assured of being
more secured since it is operated by the Central Bank of Nigeria. The
Central Bank of Nigeria is one of the most infallible financial
institutions in the country. Hence, the government’s money is safe,
accessible, and secure. It is now possible to audit all government
transactions since it is all in one place. However, whatever it is
that has an advantage will also come with its disadvantage. This
article is about the disadvantages of a Treasury Single Account. Read
on below:The inclusion of public corporations in the TSA might
misstate the boundaries between the public and government sectors.
This can result into limitations of public corporations. These
corporations might lose their autonomy in a bid to introduce
strategies that are commercially oriented. A public corporation that
may seriously suffer from loss of independence is tertiary
institutions. Many universities in fact opposed the inclusion of
tertiary institutions in the TSA. The Committee of Vice-Chancellors of
Federal Universities had a meeting with the Accountant General of the
Federation where they argued that by means of the operations and
services rendered by Federal universities, it should not be regarded
as public services or revenue-generating organizations. The committee
argued that including Federal universities in TSA might negatively
affect the smooth running and operations of the institutions since
government allocations are barely enough to cater to the needs of the
institutions. Sometimes, universities collect third party funds for
the provision of services and such functions as this many be disrupted
on account of the implementation of TSA. However, the Accountant
General assured them this would not be the case.
(adsbygoogle = window.adsbygoogle || []).push({});The implementation
of the Treasury Single Account would adversely affect liquidity in the
banking system. This is because of a surge in money market rates
because MDA’s withdrew their funds from commercial banks. This will
in turn affect small business owners who are in need of loans and
capital for their business. When ministries withdrew their funds from
commercial banks, banks then place high-interest plans on the little
left which the public will borrow from. Hence, it is the average
Nigerian, such as the small business owners and traders that will
suffer. Many experts conclude that this will lead to the death of many
small-scale businesses and to an increase in the level of
unemployment.
When the TSA was initially implemented, there was difficulty in
releasing funds to MDA’s for their operations. Many have argued that
the TSA comes with a financial system that has not been used earlier,
e-finance and this may affect the effectiveness of the policy.
Another challenge with the implementation of the TSA is the ignorance
of many Nigerians. Many do not understand the efficiency and
effectiveness of this policy. Some claim it is another means to aid
corruption by the government. For example, Dino Melaye, a Nigerian
senator raised a motion that the operation of the treasury single
account (TSA) should be investigated for possible corruption. He
claimed that the appointment of REMITA, an e-collection agent, is a
gross violation of the law. He also claimed that the constitution only
recognises a banking institution as the collector of government funds
and Remita was not a bank. However, the management of System Specs who
developed Remita refuted the claim of it being used as a tool for
embezzlement and explained that Remita is not an agency but an
application or software used for facilitating payment of government
revenue from other government agencies to a TSA controlled by the
Central Bank of Nigeria.
Advocates of the TSA policy argue that it will encourage integrity in
how public funds are managed by the government and her agencies. It
will remove the secrecy of government organizations in the management
of funds. It will also expose the revenue-generating agencies that
have been depriving the federal government of its money through
multiple bank accounts. Altogether, there will be overall efficient
management of public funds which will lead to a better economy. When
you consider the situation of Nigeria where corruption has been a
major menace causing havoc to our economy, we need every and any
system that can foster transparency and accountability. In light of
this, the Treasury Single Account might just be the best way to go.
(adsbygoogle = window.adsbygoogle || []).push({});
(adsbygoogle = window.adsbygoogle || []).push({});
(adsbygoogle = window.adsbygoogle || []).push({});
jQuery(document).ready(function( $) { $.post(
'https://nigerianfinder.com/wp-admin/admin-ajax.php', {action:
'mts_view_count', id: '290824'}); });
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