Impact of Treasury Single Account on Nigeria’s Economy
CHAPTER ONE
OBJECTIVE OF THE STUDY
The objectives of the research work are to solve the above stated problem and to help the federal government of Nigeria on policy generation and decision making; some of the objectives are stated as:
- To determine the extent to which TSA can prevent financial leakages, to increase transparency and proper accountability in the public financial management.
- To determine the effect of TSA on the economy of Nigeria
- To determine the relationship between TSA and public financial management
- To examine the role of TSA in the blockage of financial leakages
CHAPTER TWO
REVIEW OF RELATED LITERATURE
INTRODUCTION
President of Nigeria, Muhammad Buhari’s directive to all federal Ministries, Departments and Agencies (MDAs) to start paying all government revenues, incomes and other receipts into a unified pool of single account with the Central Bank of Nigeria (CBN), is a bold and highly commendable move directed at one of the bastions of corruption in the polity, namely, public institutions. Apparently, a master stroke against a tactless financial strategy emanating from an unholy alliance between banks and MDAs, the current implementation of this unified accounting structure, rightly called the Treasury Single Account (TSA), is laden with high expectations of economic prospects owing to its possibility of ensuring transparency and accountability. The TSA is a unified structure of government bank accounts enabling consolidation and optimal utilisation of government cash resources. Through this bank account or set of linked bank accounts, the government transacts all its receipts and payments and gets a consolidated view of its cash position at any given time. The former Accountant-General of the Federation (A.G.F), Jonah Otunla, also backed the implementation of TSA stressing that it would bring about transparency, efficiently and accountability. This is because TSA is bound to improve transparency and accountability in public finance management. First, it will remove that organisational secrecy around the management of public finances. The discretionary aspect of accounting officers and politicians collaborating to do all manner of business with government finances before executing projects thereby causing delays or negotiating interest rates with banks for private gains will be over. The second is that revenue generating agencies that have been depriving the Treasury of due revenue through a plethora of bank accounts under their purview and which is not known to the authorities will no longer be able to defraud the revenue since all funds will be swept into the TSA. Thus, beyond transparency and accountability, the TSA will introduce economy and efficiency into overall management of public finances and this will in the long run lead to effectiveness of government spending since it places government in a better position to realise overall policy goals. (Okechukwu, Chukwurah , Daniel, & Iheanacho, 2015). According to the former A.G.F prior to TSA, Nigeria had fragmented banking arrangements for revenue and payment transactions. He stated that, “There were more than 10,000 bank accounts in multiple banks, which made it impossible to establish government consolidated cash position at any point in time. It led to pockets of idle cash balances held in MDAs’ accounts when government was out borrowing money.” (Obinna,2015:52) The idea of treasury single account came into being when some agencies refused to declare and remit the 25 percent of their annual revenue they generated to the treasury as demanded by law.In 2012 about N120 billion was forcefully collected by government from MDAs being 25 percent of their gross revenue to the treasury with another N34 billion collected in 2013. Before then, most of the MDAs were reluctant to remit the requested amounts by law to the treasury. (Daily Trust Editorial,2015:16) Treasury Single Account is a public accounting system under which all government revenue, receipts and income are collected into one single account, usually maintained by the country’s Central Bank and all payments done through this account as well. The purpose is primarily to ensure accountability of government revenue, enhance transparency and avoid misapplication of public funds. The maintenance of a Treasury Single Account will help to ensure proper cash management by eliminating idle funds usually left with different commercial banks and in a way to enhance reconciliation of revenue e collection and payment (Adeolu, 2015). The Revenue Mobilization and Fiscal Commission released an audit report which indicted some banks for withholding about N12 billion revenue collected on behalf of the Nigerian Customs Service and Federal Inland Revenue Service. The revenue according to the commission is stashed in 19 banks from January 2008 to June 2012. The chairman, Non- Oil Committee of the Commission, Rev Ajibola Fagboyegun demanded for urgent return of the funds by the banks to avoid sanctions. (Hamisu, 2015). It is important to note that the TSA issue did not start with Buhari administration. Former President Goodluck Jonathan initiated the policy last year. But he could not implement it before he left office on May 29 this year. The implementation deadline by Jonathan was fixed for February 28, 2015. But the said deadline was ignored by the MDAs and no sanction was meted out to them. Some said that Jonathan lacked the gumption to enforce the implementation of TSA because the hands of his administration were not clean enough. Others argued that the former president could not resist the pressure to drop the idea from bank executives and top business magnates in the country who were playing major roles in the sponsorship of his re-election bid. (Jegede,2015). Though, the government is yet to unveil its economic agenda, leading institutions are keying to the administration’s resolve to move the country forward. In fact, it was the Economic and Financial Crimes Commission (EFCC), which spearheaded the flurry of actions, then followed by Ministries, Departments and Agencies (MDAs), and now, the Treasury Single Account (TSA) policy compliance introduced last year to block revenue generation leakages by former President Goodluck Jonathan, which was not effected even after a deadline was set for MDAs for February this year.
CHAPTER THREE
RESEARCH METHODOLOGY
Research design
The researcher used descriptive research survey design in building up this project work the choice of this research design was considered appropriate because of its advantages of identifying attributes of a large population from a group of individuals. The design was suitable for the study as the study sought to the effect of treasury single account on the economy of Nigeria
Sources of data collection
Data were collected from two main sources namely:
(i)Primary source and
(ii)Secondary source
Primary source:
These are materials of statistical investigation which were collected by the research for a particular purpose. They can be obtained through a survey, observation questionnaire or as experiment; the researcher has adopted the questionnaire method for this study.
Secondary source:
These are data from textbook Journal handset etc. they arise as byproducts of the same other purposes. Example administration, various other unpublished works and write ups were also used.
Population of the study
Population of a study is a group of persons or aggregate items, things the researcher is interested in getting information on the study the effect of treasury single account on the economy of Nigeria. 200 staff of CBN in Akwa Ibom state was selected randomly by the researcher as the population of the study.
CHAPTER FOUR
PRESENTATION ANALYSIS INTERPRETATION OF DATA
Introduction
Efforts will be made at this stage to present, analyze and interpret the data collected during the field survey. This presentation will be based on the responses from the completed questionnaires. The result of this exercise will be summarized in tabular forms for easy references and analysis. It will also show answers to questions relating to the research questions for this research study. The researcher employed simple percentage in the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was on the effect of treasury single account on the economy of Nigeria. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of on the effect of treasury single account on the economy of Nigeria
Summary
This study was on the effect of treasury single account on the economy of Nigeria. Four objectives were raised which included: To determine the extent to which TSA can prevent financial leakages, to increase transparency and proper accountability in the public financial management, to determine the effect of TSA on the economy of Nigeria, to determine the relationship between TSA and public financial management, to examine the role of TSA in the blockage of financial leakages. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of CBN in Akwa Ibom state. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made human resource managers, accountants, customer care officers and junior staffs were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies
Conclusion
Based on the finding of this study, TSA policy will go a long way in blocking the identified financial leakages in revenue generation and promote transparency and accountability in the public financial system if it is fully implemented. It will equally pave way for the timely payment and capturing of all revenues going into the government treasury, without the intermediation of multiple banking arrangements. The policy will also enable the government at the centre to know its cash position at any given time without any hindrance
Recommendation
Based on the findings of the study, the researcher recommends the followings:
- For the success this policy, government should engage in massive public enlightenment about the important of the policy
- Government should overhaul the capacity of the Federal Ministry of Finance and the CBN to cope with challenges associated with enforcement of the provisions of the TSA.
- Government should secure as soon as possible the appropriate legislative support to facilitate the relevant regulatory environment which will drive the effective implementation of the TSA.
- Another suggestion is that, there is need for more legislation to cover the states and local government level since the policy in question only covered the federal level.
- TSA policy to be effective the Fiscal Sunshine Bill needs to be put in place, which if enacted will open up the financial activities of government in a way that there will be no more hiding place for those who divert or loot government money. For instance, with Fiscal Sunshine Act in place, budgeting process and implementation, including contract awards, should be in the open for Nigerians to see both how revenues are generated and how public money is being spent by those in government, and why.
- Government should review the TSA policy to specifically safeguard the financial autonomy of the Nigerian educational institutions.
REFERENCES
- Adeolu I.A. (2015). Understanding The Treasury Single Account (TSA) System –Things You Should Know. Business & Economy, Market Development.
- Bhatti, M. A., Hee, H. C., &Sundram, V. P. K. (2012). A guide for beginners: Data analysis using SPSS and AMOS. Kuala Lumpur: Pearson Malaysia SdnBhd.
- CBN (2015). “Revised Guidelines for compliance with Treasury Single Account by Banks in Nigeria”.
- Guardian Editorial,(2015). Buhari on Treasury Single Account, Guardian, August 28, P16.
- Hamisu, M. (2015). “MDAs, banks under pressure as TSA deadline ends” Daily Trust, September 14, P3.
- Jegede, M. (2015). Buhari and the Treasury Single Account, Daily Trust, September27, P22.
- Obinna, C.(2015), Banks Face Liquidity Strain as FG Fully Enforces Treasury Single Account, Thisday Monday, 11 August,P52
