Some financial experts are of the view that the appropriate way to enthrone fiscal regime in Nigeria, is to discontinue situations where government agencies and parastatals are allowed to operate accounts with commercial banks.
In a recent interview with one of the national dailies, Olu Falae, a former secretary to the Government of the Federation, said 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.
According to him, “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 cognisance 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 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 centralised 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 utilisation 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 N126bn 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 organisation 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 firms to undertake projects of significant national importance, if given the opportunity by government agencies.
Ben Uzor
