In a recent interview
with one of the national dailies, a former Secretary to the Government of the Federation,
Chief Olu Falae said one of the ways to enthrone fiscal regime in the country
is to stop a regime where government agencies and parastatals are allowed to
operate accounts with commercial banks.
According to
him, the ideal thing is to have a situation where all funds meant for
ministries, department and agencies [MDAs] are kept with the Central Bank of
Nigeria (CBN) from where the MDAs will withdraw to fund their operations and
projects.
“I am
speaking from a position of knowledge because I have been there before and I
know that it is possible to operate these accounts under the CBN without any
bottleneck as some people may want us to believe. What is happening now is that
people will lodge huge sums belonging to government at various levels in
commercial banks and after a time they will withdraw the interest accrued from
these lodgements that in most cases runs into billions of naira. To me that is
part of corruption”.
According to
reports, while Falae’s proposition is valid, his declaration did not take into
cognizance the fact that the rules of engagements have since changed within
Government. One of the cardinal
components of the Federal Government’s Economic Reform Programme (ERGP) that
commenced in 2004 is the implementation of a Treasury Single Account [TSA] for
the Federal Government, an initiative that is more comprehensive, and goes well
beyond what Chief Falae envisioned.
TSA is a
unified structure of government bank accounts that gives a consolidated view of
government’s cash resources, based on the unity of cash and treasury. It is a
centralized cash position of the treasury, where the revenues of all MDAs are
consolidated and all cash outflows (payment and transfers) are executed in a
single account within the custody of the CBN.
Championed by
the Office of Accountant General of the Federation (OAGF), and the CBN, TSA
initiative commenced in January 2012 after rigorous planning and
extensive stakeholders’ engagement. According to
documents released by the CBN, objectives of TSA are to help government unify
banking arrangements; assist the federal government in the efficient utilization
of government funds for approved projects; promote transparency and
accountability in government operations; and reduce the amount, and cost of
government borrowing by maximising the use of available government resources to
deliver projects.
CBN
sources confirmed that the success of TSA was predicated on the highest
political support it enjoyed from Nigeria’s number one citizen. President
Jonathan in his 2014 New Year address to the nation affirmed that TSA project
would be completed in 2014.
“We shall
complete the deployment of the three electronic platforms in 2014 – namely, the
Treasury Single Account (TSA), the Government
Integrated Financial Management Information System (GIFMIS) and the Integrated
Payroll and Personnel Information System (IPPIS) – which are all geared towards
improving efficiency and transparency in our public finances. Through these
reforms, we have already saved about N126 billion in leaked funds and intend to
save more,” President Jonathan said.
TSA has two
main parts namely, the payment of salaries, suppliers, taxes and the collection
of independent government revenues. While the payment side of TSA commenced in
January 2012, the collection side would start nationwide in January 2015. With
the activation of the payment side of TSA in January 2012, the processing of
payment transactions by MDAs which hitherto was done largely via manual mandates
to DMBs or the CBN are now processed electronically in line with the CBN
National Payments Strategy Vision (NPSV) 2020 initiative and the recent CBN
circular on end-to-end electronic payments.
Under the TSA
initiative, all government payments are routed from GIFMIS to CBN’s Payment
Gateway to effect e-payments into the accounts of individual or corporate
beneficiaries in DMBs, micro finance banks [MFBs] and primary mortgage
institutions [PMIs], thereby creating a fully automated payment and collection
process for the Federal Government.
According to
reports, the CBN, after a thorough evaluation of options did adopt Remita, an
indigenous solution to be implemented as the CBN’s e-payment gateway platform
for the TSA project based on its intelligent architecture, multiple channels
integration and availability of product support, among other features.
Findings
indicate that the Remita e-payment platform has been in operation for
about ten years, serving the payment and collection needs of organizations of
all sizes in different sectors of the economy in compliance with CBN’s
e-payment framework.
CBN sources
averred that the adoption of Remita as CBN’s e-payment platform testifies to
the maturity of the Nigerian ICT industry, and the ingenuity of indigenous
software organisations to undertake projects of significant national
importance, if given the opportunity by government agencies.
In addition
to payments, TSA project will streamline and automate the independent revenue
collections of MDAs using the GIFMIS and the CBN-Remita payment gateway. This
is done in collaboration with DMBs and other electronic collection channels
like internet banking, PoS, ATMs, mobile wallets and electronic cards.
The
deployment of Remita across DMBs and other channels to automate and consolidate
government revenue collections from all payers will ensure that government
funds are deposited directly into the TSA account held at CBN, for further
credit to the collecting MDAs.
Some of the
benefits of the TSA revenue collection initiative include plugging
loopholes in the Federal Government revenue collection system; enthroning
a new regime of transparent and accountable Internally Generated Revenue (IGR)
management; and improving funds availability for funding of poverty
eradication programmes.
The project
also aligns with the on-going CBN e-payment policy, which is aimed at easing
the burden of revenue payers and making government services easily accessible
to the public. To date, about 500 out of the 700 plus MDAs have been
enrolled on GIFMIS.
According to
findings, despite the laudable objectives of the TSA project and the
president’s directives, TSA is still experiencing pockets of resistance from
some MDAs. Insiders said the reason for this resistance ranges from fear of
loss of control over cash allocation; reduction in funds allocation due to
increased transparency of utilization of funds; traceability of the budgeting
process; to loss of patronage by banks who deal with MDAs for funds deposits.
Findings
further show that some MDAs may not fully appreciate the benefits of the
programme. “The MDAs are concerned about the reduced patronage of government
contractors who before now were always trooping to MDAs’ offices to seek
payment of their invoices, and the loss of access to
independent revenues collections made on behalf of government, as this will now
be paid directly into a central account,” an insider said.
Sources also
say the implementation of TSA has positively influenced the management of the
Federal Government’s accounts as there is now a huge reduction in idle cash
kept by MDAs in DMBs and as a result, most “MDAs are no longer cash strapped to
execute their projects”. The manual processing of MDAs payments by DMBs
and CBN has also almost disappeared.
TSA has
empowered the government with the capability to close its books and know its
cash position on specified dates as prescribed by statutory accounting rules.
In addition, there is now a transparent and reliable system of cash backing for
MDAs’ expenditure because of the halt in the maintenance of direct relationship
by MDAs with DMBs.
Besides, the
TSA initiative has also enthroned a new regime of transparency in the
allocation of funds. For instance, the appropriated budget of each MDA is given
directly to the management of the MDAs, clearly separate from that of the
supervising ministry. This means MDAs are unable to spend beyond the approved
budget in any given year.
“It is
pertinent to commend all the institutions involved in the conceptualization and
implementation of the TSA project, considering the myriad of challenges faced
because of the attitude of some of the MDAs and other interested external
stakeholders”, sources said.
However, in
all of these, one needs to remember that the President’s deadline for the
migration of all the MDAs to GIFMIS TSA is December 31, 2014. Will the MDAs yield to the
President’s directives? Time will tell.
*This commentary was contributed by +Psalmson Olaegbe
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