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By Henry Uche
A fintech expert, Epa Steven has affirmed that the Treasury Single Account (TSA) is not shut down, amidst swirling rumours and misinterpretations following a circular signed and released on December 28th, 2023, by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wake Edu, which contains new guidelines for immediate compliance by all Federal Government Agencies and Parastatals for the collection, utilisation, and remittances of Internally Generated Revenue (IGR).
Recall that the Treasury Single Account, commonly known as TSA, was introduced by the Goodluck Jonathan administration in 2012 and fully implemented by the Buhari administration in 2015. It mandates all Federal Ministries, Departments, and Agencies (MDAs) in Nigeria to keep and expend all funds solely from the Consolidated Revenue Fund (CRF) maintained at the Central Bank.
TSA, which is a centralised bank account structure was designed to provide the government with full and unhindered access to its funds at all times, real-time tracking of all outflows and inflows from a single point, and eliminate the need for short-term borrowing from commercial banks at high-interest rates by different MDAs in an uncoordinated manner.
Reports from Bureau of Public Service Reforms (BPSR) has it that implementation of TSA has saved the government over N10 trillion since its inception. The EFCC, ICPC, and other investigative agencies have also found the TSA of immense benefits in investigating suspected cases of corruption, fraud, or outright theft of government funds.
Previously, different MDAs would borrow money from commercial banks at exorbitant rates to cover budget deficits, while other MDAs had idle funds in separate accounts. TSA has eliminated this extremely inefficient practice that has cost the government huge losses, leading to substantial savings for the federal government.
Equally, the former Minister of Finance, Budget, and National Planning, Mrs. Zainab Ahmed, estimated that TSA saves Nigeria N45 billion in interest payments monthly.
Mr. Steven revealed that the latest circular by the Ministry of Finance only stipulates a review of a component of the TSA. According to him, that was not the first circular issued on review of TSA operations and certainly would not be the last, as the government continues to respond to issues in the management of its finances under the TSA initiative.
In other to unpack the true implications and dispel misinformation regarding the guidelines, the fintech expert explained that going forward, under the new guidelines, MDAs will now be provided with new sub-recurrent accounts into which what is due to them from government inflows will be automatically deposited in such accounts and the balance automatically remitted into the CRF. In essence, MDAs will have access only to their statutory share of government inflows without the possibility of inadvertent access and tampering with funds that should accrue into the CRF.
“Previously, MDAs self-managed TSA sub-accounts within the Central Bank of Nigeria, where generated revenues were deposited and utilised for MDA expenditures. This included MDAs choosing when to remit the statutory deductions to the Consolidated Revenue Fund (CRF).
“The Office of the Accountant General of the Federation (OAGF), subject to the categorisation of Agencies shall map and automatically effect a direct deduction of 50% (fifty percent) on the gross revenue of self/partially funded Agency/Parastatals and 100% (one hundred percent) for fully funded Agencies/ Parastatals as an interim remittance of the amount due to the Consolidated Revenue Fund. This is to improve revenue generation, fiscal discipline, accountability, and transparency in the management of government financial resources and the prevention of waste and inefficiencies”
He said the implementation of Nigeria’s Treasury Single Account (TSA) initiative is a good example of the crucial role of leveraging Digital Public Infrastructure for the digital transformation of public sector service delivery.
He added that by leveraging the Treasury Single Account, Nigeria continues to lead in digital transformation efforts and sets an example for other nations seeking to enhance their public services through centralised digital infrastructure.
“The implementation of TSA by the Federal Government of Nigeria has contributed to the growth of indigenous technologies, setting them up for export to other climes. Companies such as Remita and others have been at the forefront of providing payment and switching technology to drive TSA from inception, with many more companies being brought on board. This has not only created an increased economic opportunity but also fostered technical competency and economic development within Nigeria.
“While the Tinubu administration and many more administrations after it will continue to evolve the TSA, there’s no doubt that the TSA is a key component of Nigeria’s public financial management journey. Its implementation fosters financial visibility, reduces costs, facilitates timely remittance of funds, and streamlines public service operations.
“Without a doubt, the recent whispers of a TSA demise were just that—whispers. Instead, we see a strategic evolution, precisely aimed at refining the system for even greater efficiency. Remember, the TSA is not a static monolith but a living, breathing system that must adapt to changing realities. With each refinement, it grows stronger, more efficient, and better equipped to serve the needs of the Nigerian people” he stressed.
For clarity, the details of how the latest circular affects each of the FGN MDAs are reproduced below:
Fully Funded MDAs “All Ministries, Departments, and Agencies (MDAS) that are fully funded through the Annual Federal Government Budget (receiving personnel, overhead and capital allocation) and on the schedule of Fiscal Responsibility Act, 2007 and any addition by the Federal Ministry of Finance (FMF) should remit one hundred percent (100%) of their Internally Generated Revenue (IGR) to the Sub-Recurrent Account, which is a sub-component of the Consolidated Revenue Fund (CRF).
Partially Funded MDAs: All partially funded Federal Government Agencies/ Parastatals (receiving capital or overhead allocation from the Federal Government Budget) should remit fifty percent (50%) of their gross Internally Generated Revenue (IGR), while all statutory revenue like tender fees, contractor’s registration, sales of government assets, etc., should be remitted one hundred percent (100%) to the Sub-Recurrent Account.
Self Funded MDAs: All self-funded Federal Government Agencies/Parastatals (receiving no allocation from the Federal Government Budget) should remit fifty percent (50%) of their gross Internally Generated Revenue (IGR), including all statutory revenue lines like tender fees, contractor’s registration, sales of government assets, etc., to the Sub Recurrent Account”.
