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The Most Interesting Fact About Treasury Single Account.
Treasury Single Account – If you have any interest in the economy of your country, you might have the interest to learn about the Treasury Single Account in Nigeria. So, this article will help you understand more about the Treasury Single Account.
Treasury Single Account
What is Treasury Single Account?
Treasury Single Account (TSA) is a public accounting system of which its purpose is to consolidate all payments from all agencies of government into a single account at the Central Bank of Nigeria. it was proposed by the Federal Government of Nigeria in 2012 under the administration of Goodluck Jonathan and was fully implemented by the Buhari Administration.
It covers all Ministries, Departments, and Agencies (MDAs). However, oil and gas companies, as well as other joint venture partner accounts, are excluded from the TSA’s responsibilities.
One of the main reasons why TSA was introduced was to battle corruption in the country and ensure that government payments were transparent. In less than a year, this system has allowed the country to take control of N3 trillion in cash assets. As you read further, you will get to know other advances of the TSA.
Advantages of Treasury Single Account
The following are other advantages of the TSA:
1. TSA allowed the government to discover and close over 17 thousand accounts in commercial banks that had a 0% interest rate. Among those accounts, the Federal Government also found and shut down quite a few fake accounts that were opened on behalf of the government. Those accounts were actually operated by private establishments, which did not benefit the government in any way.
2. The creation of the TSA helped the Nigerian Government get a stronger hold of its finances. With this new ability, it can have better plans for the good of Nigerian citizens and have the funds for the implementation of said plans.
3. One of the biggest breakthroughs for the Nigerian economy and especially the MDAs is that they do not have to borrow funds from one another at ridiculous rates anymore. As there is a single account, any government structure can have access to it without paying outrageous fees to commercial banks.
4. The money that belongs to the Federal Government is now under its full control and more secure than ever. As the CBN is one of the most infallible financial institutions in the country, it means that the government’s money is safe and accessible at any time. Not a single naira is unaccounted for.
5. With TSA there began an era of new payment opportunities for both MDA and the government as a whole. This means that all the MDAs are now connected to the CBN, so they can use its online banking features. In addition, the government is no longer tied to microfinance and commercial banks. It can now accept payments through all the possible channels, like digital wallets, credit/debit cards, POS terminals and so on.
6. Another big advantage brought on by the TSA is that bankers and civil servants are no longer able to collect the 10% interests on government funds. This means that none of these people will be able to gain their fortunes on behalf of others, including the government.
7. With all of the government money in one place, it is now possible to audit all government transactions. This means that all transactions are monitored, and all the information on them (like the date or purpose of payment) can be easily accessed. The audit of the TSA also allows to monitor the state of different agencies and to adjust the budgetary allocation accordingly.
8. TSA has moved the Nigerian economy one step forward to the future. As the whole system mostly depends on e-payments, it encouraged the development of indigenous software that was able to deal with the heavy burden of the nation’s finances. This software allowed Nigerian banking to get on a new (electronic) level.
Disadvantages of Treasury Single Account
Regardless of all its advantages, the TSA has a few faults. They include:
1. The introduction of a completely new system is always hard. It is hardest when it comes to the banking system, namely its performance and liquidity. The introduction of TSA might put unnecessary pressure on the availability of credit and interest rates.
2. Another challenge is that not everyone actually understands what it is, how it works or why it is important. Many people are confused or ignorant on the topic of TSA; therefore, the support for it has been uninspiring at times.
3. The fact that the public corporations are also included in the TSA might distort the boundaries between the public and government sectors, and limit the operational independence of said corporations. They might lose their autonomy to introduce strategies that are commercially oriented. In fact, many universities can seriously suffer from the loss of autonomy.
4. It might surprise you to know that even the government has not figured out yet what to do with all the money that TSA brought in. When the system was just introduced, there was also a problem with releasing the funds to various MDAs. However, government officials claim that it has been resolved.
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