THE IMPACT OF TREASURY SINGLE ACCOUNT (TSA) ON THEPERFORMANCE OF LISTED MONEY DEPOSIT BANKS (MDB’S) IN NIGERIA

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  • Department: Accounting
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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 collection and payment (Adeolu, 2015). 

CHAPTER ONE

INTRODUCTION1.1   Background to The Study 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’sCentral Bank and all payments done through this account as well. The purpose is primarily toensure accountability of government revenue, enhance transparency and avoid misapplication ofpublic funds. The maintenance of a Treasury Single Account will help to ensure proper cashmanagement by eliminating idle funds usually left with different commercial banks and in a wayto enhance reconciliation of revenue collection and payment (Adeolu, 2015).Section 80 of the 1999 Constitution, which gives legal backing to the TSA reads: “All revenuesor other moneys raised  or   received   by the Federation (not  being   revenues   or   other moneyspayable under this Constitution or any Act of the National Assembly into any other public fundof the Federation established for a specific purpose) shall be paid into and form one ConsolidatedRevenue   Fund   of   the Federation”.   Other sub-   sections  of  that   provision   explain  restrictionsregarding the withdrawal of money from this Consolidated Revenue Fund. (CBN.2015).Concerning its practice, as far back as the government of former President Olusegun Obasanjo,the need for a consolidated Federation Account was what informed the establishment of theGovernment Integrated Financial Management Information System (GIFMIS). However, it was President Goodluck Jonathan who piloted the TSA in its present form, when hecommenced implementation with about 42 public institutions comprising ministries, departmentsand agencies; it was not until 2012 that government ran a pilot scheme for a single account using217 ministries, department and agencies as a test case. The exercise saved Nigeria about N500billion in frivolous spending, until recently when President Buhari began full implementation. The success of the pilot scheme motivated the government to fully implement TSA, leading tothe directives to banks to provide the technology platform that will help to accommodate theTSA.   The Central Bank opened a Consolidated Revenue Account to receive all governmentrevenue and effect payments through this account.  All Ministries, Departments, and Agenciesare expected to remit money collected into this account through the individual commercial bankswho act as collection agents. Although, commercial banks will continue to maintain revenuecollection accounts for Ministries, Departments, and Agencies   but all monies collected by thesebanks will have to be remitted to the Consolidated Revenue Accounts with the CBN at the end ofeach banking day. In other words, Ministries, Departments, and Agencies accounts with moneydeposit banks must have nil balance at the end of every working day by a complete remittance tothe Treasury Single Account, of all revenues collected. Indeed, it is estimated that commercial banks hold about N2.2 trillion public sector funds at thebeginning   of   the   first   quarter   of   2015.   When   such   amount   of   money   leaves   the   system  isseemingly obvious.  When one considers the fact that each time the monthly federal allocation isreleased, the banking system is usually awash with liquidity, and as soon as this public sectorfund dries up, the liquidity base may decline with an increase in interbank rates. The banks mightbe   affected,   when   such   high   revenue   generating   parastatals   like   the   NNPC   moves   out   ofcommercial banks. 


THE IMPACT OF TREASURY SINGLE ACCOUNT (TSA) ON THEPERFORMANCE OF LISTED MONEY DEPOSIT BANKS (MDB’S) IN NIGERIA
For more Info, call us on
+234 8130 686 500
or
+234 8093 423 853

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  • Type: Project
  • Department: Accounting
  • Project ID: ACC2299
  • Access Fee: ₦5,000 ($14)
  • Chapters: 5 Chapters
  • Pages: 80 Pages
  • Methodology: Single Percentage
  • Reference: YES
  • Format: Microsoft Word
  • Views: 1.6K

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