Finance Minister, Mrs Kemi Adeosun, lists the gains of the Treasury Single Account (TSA). Adeosun spoke during a TSA workshop for states Accountants-General in Abuja.Excerpts from her address:
The global economic challenges which are affecting our nation demand optimum efficiency in the management of public funds. The objective requires an overhaul of the financial management approaches adopted to meet financial obligations on time and ensure that cost effective financial support is provided to public institutions
In practice, TSA is an essential reform for any government wishing to pursue fiscal sustainability and prudent management of its resources.
It increases accountability and transparency, improves the processing of payments and collections and reduces borrowing costs.
- TSA at the federal level has allowed, for the first time, visibility of the total quantity of government funds at any point in time.
- The balance, which changes daily as MDA’s remit revenues and make payments, according to the latest reports from CBN exceeds N2.2 Trillion. I can report that work is now ongoing within The Treasury, to determine how much of these funds can potentially be utilised to part fund the 2016 budget and how much relates to pending commitments.
- This, of course, will reduce the amount to be borrowed.
- The TSA has provided us with financial information on the revenues of agencies funded by government and has reduced revenue suppression. This information is being used to drive our programme to enforce compliance with the Fiscal Responsibility Act and ensure that Revenue Generating Agencies generate expected surpluses and remit to the Federal Purse.
- TSA has eliminated opportunities for brokerage and other corrupt practices that previously encouraged agencies to accumulate funds with commercial banks rather than apply them to their intended uses. We believe that this will reduce payment delays to contractors, minimise late payment penalties and will consequently improve project completion times and service delivery.
- TSA has corrected the practice of government borrowing short term funds at high rates of interest, whilst simultaneously having idle funds in various bank accounts.
- By reducing the number of accounts in operation, monitoring and control has significantly improved.
We need to improve the revenue base of the country through full implementation of TSA and blocking of all leakages and improving the efficiency of revenue administration. The revenue base of the Country is still low and its administration still leaves room for improvement. This clearly indicates that the underlying assumptions underpinning the 2016 budget may only be realised with serious efforts put in place towards revenue efficiencies and expenditure discipline such as implementation of the TSA and Cash Management concepts by all tiers of government.
I am aware that some states are already implementing TSA. I urge those states to kindly share their experiences with others so as to encourage those who are yet to decide to take their first step in this direction.
At the federal level, I can assure that our experience has been worthwhile. TSA has provided complete and timely information on government cash resources, Improved operational control on budget execution, enabled efficient cash management, reduced bank fees and transaction costs, facilitated efficient payment mechanisms and it has also reduced the FGN ways and means requirement to bridge the budget funding gap.