The Nation Newspaper

Tag: TSA

  • Fed Govt saves N24.7b from TSA, others monthly

    Fed Govt saves N24.7b from TSA, others monthly

    President Muhammadu Buhari says Federal Government’s leveraging  Information and Communication Technology (ICT) and the enforcement of Bank Verification Number (BVN) has saved the nation of N24.7 billion monthly.

    Buhari made this known  when he declared open the 2017 eNigeria Conference, organised by National Information Technology Development Agency (NITDA) at the International Conference Centre, Abuja, on Tuesday.

    The president also revealed that the implementation of the Integrated Payroll and Personnel Information System (IPPIS) and Bank Verification Number (BVN) had eliminated ghost workers and reduced waste, thereby saving the nation N20 billion monthly.

    He said that the consolidation of 20,000 accounts had saved the nation N4.7 billion.

    According to him, the TSA policy has also facilitated transparency, accountability and ease of transactions and payments between government and businesses as well as government and citizens.

    “We have done a lot to transform our government, especially in the areas of strategy, policies and digital infrastructure investments.

    “You may recall that on assumption of office, we enforced the policy on Treasury Single Account (TSA). Today, we are all witnesses to the impact it has made on our financial management.

    “We have so far consolidated over 20,000 accounts, resulting into about N4.7 billion monthly savings.

    “In addition, the policy facilitated transparency, accountability and ease of transactions and payments between government and businesses as well as government and citizens.

    “Another initiative leveraging on ICT and making huge impact on the economy is the introduction of the Integrated Payroll and Personnel Information System (IPPIS) and Bank Verification Number (BVN).

    “Its implementation has helped to eliminate the menace of ghost workers, thereby reducing waste in the system by saving government over N20 billion monthly.

    President Buhari described his presence at the event as a demonstration of his commitment and strong belief in using ICT as a major driver of developmental governance and economic reform plans aimed at bringing about the true CHANGE his administration promised Nigerians.

    According to him, ICT is strategic in driving productivity and efficiency in all sectors of the economy.

    He noted that currently, almost all sectors of the nation’s economy leverage on ICT to increase efficiency, productivity and performance.

    President Buhari commended NITDA’s efforts on fostering the patronage of indigenous IT products and services through continuous engagement with indigenous OEMs, relevant stakeholders and other laudable initiatives.

    He observed that ICT played a pivotal role with agencies of government such as the Corporate Affairs Commission (CAC), Federal Inland Revenue Service (FIRS) and the Nigeria Immigration Service (NIS).

    He stated that the affected agencies had leaned on ICT in improving public service delivery in an efficient and transparent manner.

    “So far, 31 reforms have been completed by the council and these reforms are already making noticeable impact on our economic diversification efforts.

    “The Agency’s efforts at enforcing Federal Government’s directive on ensuring that all ICT projects in the country are cleared by it before implementation are highly commendable.

    “These efforts will ensure that government’s ICT procurement is transparent.

    “It is aligned with government’s IT-shared vision and policy, save costs through promotion of shared services, avoid duplication, ensure compatibility of IT systems, thereby improving efficiency across government and enforce the patronage of indigenous companies.’’

    The president expressed the hope that the conference would come up with practical, viable solutions and recommendations to further develop local content in ICT as well as how it could best regulate the deployment and use of ICT systems to foster a digital economy in Nigeria.

    The News Agency of Nigeria (NAN) reports that the president used the opportunity of the conference to express displeasure over refusal of some heads of government’s ministries, agencies and departments to wear the Armed Forces Remembrance Emblem.

  • Adeosun: banks still holding TSA money

    Adeosun: banks still holding TSA money

    Finance Minister, Mrs Kemi Adeosun has accused some Deposit Money Banks (DMBs)  of sitting on funds which they ought to have remitted to the Treasury Single Account (TSA).

    She spoke yesterday on Sunrise Daily, a programme on Channels TV.

    The Federal Government had since August, 2015, directed all Ministeries, Departments and Agencies (MDAs) to make payments into the TSA, arguing that it will promote transparency.

    Mrs. Adeosun said: “As far as I know, all the agencies are on the TSA; where there is work going on is that we have had information that some banks renamed accounts just before TSA, in other words, some banks are still sitting on our funds.

    “We’ve written to the bank MDs to say, look if you suspect that some funds may belong to the Federal Government, check with the Office of the Accountant General (of the Federation).

    “We gave them a window, some returned some money but we are going out to do some verification because we suspect that some of our money is still out there but the compliance has been good,” she said.

    Mrs Adeosun said the money generated by the Federal Inland Revenue Service (FIRS) does not go directly to the Federal Government but shared by the three tiers of government.

    “Firstly, N2.11 trillion is not a huge amount of money. It sounds very large. In the context of what Nigeria spends, it’s nothing,  in fact it’s woeful.

    “As I said, we’re tax to GDP of six per cent. It’s nothing to celebrate. Now let me explain about FIRS. FIRS collects company taxes and VAT (Value Added Tax), that is the money shared in FAAC every month.

    “So that money is being shared within the three tiers of government-federal, state and local government. The money being shared also includes oil revenue. FAAC of this month was N550 billion so that included FIRS money, customs and oil money. Those are the three constituents.

    “It’s almost like double counting when you look at FIRS on its own; so don’t think all that money is going to the Federal Government, no it’s shared amongst the three tiers of government. So it’s not that much,” she explained.

    In July, the Federal High Court in Lagos granted an interim order directing seven banks to remit the TSA funds in their custody.

    The affected banks are United Bank of Africa (UBA), Skye Bank Plc, First Bank Plc, Keystone Bank Plc, Diamond Bank Plc, Sterling Bank Plc and Fidelity Bank Plc.

    Skye Bank was the only deposit money bank that admitted to holding funds belonging to the Nigerian National Petroleum Corporation (NNPC).

  • ASUU’s demand for exclusion from TSA

    SIR: The 2017-2018 academic calendar of tertiary institutions in Nigeria last week, kicked off in full swing after surviving an initial heckle at the instance of a strike action by the Academic Staff Union of Universities (ASUU). Nonetheless, it is not yet Uhuru for both the federal government and ASUU. The solution to the problem lies in its resolution by the union to suspend strike on a major condition which will rely on full implementation of the agreement they long ago, signed with the government on improvement of tertiary education in Nigeria. By this, ASUU made it clear that it may go on strike again in October on failure by the government to abide by the agreement.

    In fighting for improvement of the tertiary education in Nigeria, ASUU had demanded a full-scale University autonomy, increased funding for universities, payment of backlog of debt, which the federal government owed the schools and most importantly, exemption from Treasury Single Account (TSA) implementation, among others. The government may have agreed on phased implementation of demands by ASUU, a reason the strike by union was short-lived; it nonetheless, it found the issue of exemption from the TSA most objectionable.

    To ASUU, TSA has constituted a bottleneck that has eclipsed the core mandate of the universities on research and breakthroughs. The lecturers are not happy that grants from international and corporate organizations for research by universities, hitherto paid into the accounts of institutions, are now trapped in the centralized TSA accounts, which they argued are not easily assessed. They are pained equally that the universities, of late, have been losing the grants at the expiration of timelines set for usage.

    Logical as the argument against the TSA by ASUU sounds, the federal government seemed not moved and inclined to back down on implementation. The reasons are quite obvious. TSA remains the major plank of the policy by the government for turning the battered economy of Nigeria around and most importantly for taming the instinct for corruption in the government circles.

    If the government is sticking uncompromisingly to TSA, the reason is not far from the breakthrough it has been recording with its implementation. As at March this year, the Federation Account had increased to N7.2 trillion, as avenues for further increase are still wide open. Prior, more than half of this humongous sum would have dissolved into private pockets of corrupt government officials and their cronies.

    Before TSA, officials of government were stealing uncontrollably from the government. The case was worse when the government had it tough to determine its cash position at every given time. For instance, the Nigerian National Petroleum Corporation (NNPC) under the immediate past government was operating more than 47 different accounts said to be directly accessed by few officials in government’s name.

    In all, the government of President Buhari with full implementation of TSA had to close down over 20,000 bank accounts illegally operated by MDAs, as the federation account was getting leaner by the day. All along, domestic debt and borrowing, which kept mounting, were never aligned and used for the purposes they were obtained. The incongruities in the manner the national treasury was being managed precipitated the recession that gripped Nigeria from 2015 up till the first quarter of this year.

    It presupposes therefore, that a government that battled fiercely to save the Nigerian economy from total collapse, pulling the country out of a gripping recession all the same, with TSA as a major tool, will not relax grip on the implementation by any means. This is a message that should not be lost on ASUU.

    The Professor Biodun Ogunyemi led ASUU had demonstrated uncommon sense of understanding and empathy for the government of President Buhari and Nigerians in general by calling off the strike early enough. The impression now is that both the government and ASUU are on synergy to save the education sector in Nigeria, in national interest. It is in this spirit that more Nigerians expect ASUU to put on a thinking cap to devise fresh ideas for universities to access international grants for research and development, while refraining from the urge to compel tertiary institutions’ exit from TSA.  ASUU should assist the implementation of TSA rather than be noted with deliberate intent to subvert it.

     

    • Idowu Samuel,

    Abuja.

  • Reps give CBN, Auditor-General six weeks to provide TSA’s report

    Reps give CBN, Auditor-General six weeks to provide TSA’s report

    The House of Representatives has given the Central Bank of Nigeria (CBN) and the Office of the Auditor-Genera of the Federation (OAGF) six weeks to provide  detailed reconciliation and audit reports of the amounts generated so far in the Treasury Single Account (TSA) of the Federal Government.

    The House said it’s ultimatum was necessitated by the need to know the cureent and true status of the TSA, going by reports that not all Ministries, Departments and Agencies (MDAs) have complied with the August 2015 directives of the Federal Government on the policy.

    The Abubakar Danburam-led ad-hoc committee investigating the status of the TSA, said the November 10 deadline remained sacrosanct, adding that no Money Deposit Banks (MDBs) is excluded as long as they have MDAs’ account with them.

    The Committee held a closed door meeting with officials from the OAGF, the Auditor-General’s office as well as CBN and some commercial banks.

    Danburam said the Committee was forced to take the decision following revelation of the  Director of Funds, Accountant-General’s Office, Alexander Adeyemi, that there were still leakages in collecting funds from agencies despite the existence of TSA.

    The Committee learnt last month that the TSA has not been audited by the Office of the Auditor-General of the Federation since its inception, two years ago.

  • Reps give CBN, AG six weeks to provide audit reports on TSA

    Reps give CBN, AG six weeks to provide audit reports on TSA

    The House of Representatives has given the Central Bank of Nigeria (CBN) and the Office of the Auditor General of the Federation (OAGF) six weeks to provide it with detailed reconciliation and audit reports of the amounts generated so far in the Treasury Single Account (TSA).
    The House said it’s ultimatum was necessitated by the need to know the current and true status of the TSA going by reports that not all Ministries, Departments and Agencies (MDA) have complied with the August 2015 directives of the Federal government on the policy.
    The Abubakar Danburam-led ad-hoc committee investigating the status of the TSA said the November 10 deadline is sacrosanct, adding that all money banked in the country are not excluded as long as they have MDAs’ account with them.
    The Committee held a closed door meeting with officials from the Office of the Accountant General of the Federation (OAGF), Auditor General’s office as well as CBN and some commercial banks.
    According to the Chairman, the Committee was forced to take the decision following the revelation of the  Director of Funds, Accountant General’s office Alexander Adeyemi that there were still leakages in collecting funds from agencies despite the existence of TSA.
    It would be recalled that the Committee was told last month that the TSA has not been audited by the office of the Auditor General since its inception two years ago.
  • Five ASUU demands FG must meet

    Five ASUU demands FG must meet

    The Academic Staff Union of Universities (ASUU) suspended its five-week long strike on Monday.

    This was after ASUU President Prof. Biodun Ogunyemi told reporters Monday night that they decided to conditionally suspend the strike in view of the timeline of October for the implementation of the signed agreement with the government.  The meeting was a long one with the Federal Government delegation, led by Minister of Labour and Employment Dr. Chris Ngige.

    Prof. Biodun Ogunyemi assured the public that the union would not hesitate to resume the suspended action should the government renege on the newly signed agreement, which he called Memorandum of Action.

    Here are the five demands requested by the Association:

    1. Areas of agreement include funding for revitalization of public universities and the issue of Earned Academic Allowances;
    2. The issue of University Staff Schools;
    3. The implementation of the judgment of the National Industrial Court, National Universities Pension Management Company and guidelines for pension matters for professors;
    4. The exemption offered by the government regarding the issue of TSA, which included the issue of grants, endowment funds as well as salary shortfall, which is already being implemented by the government;
    5. The union also promised to submit a position paper to the Federal Government on their observation with a view for government to advise state governments.

  • TSA: Self-auditing imperative for Nigeria’s financial system

    On August 12, 2017 while Americans were still trying to understand why James Fields Jr ploughed his car into a crowd of innocent protesters in Charlottesville, there was a mild outburst at an event in Abuja. The outburst was the product of lack of information or outright misinformation about the workings of the Treasury Single Account (TSA) at a private hearing put together by a House of Representatives ad-hoc committee.

    What happened that day was that the leadership of the committee asked representatives of the finance ministry if TSA had been audited two years into its use. In response, they said that had not been done. The whole vociferation of displeasure centred on why a system that is used to process huge volumes of government funds could go unaudited for two years.

    But the fuss was largely unnecessary because the TSA in itself is a self-auditing system. Indeed, it is surprising that years after the adoption of TSA, the Accountant General of the Federation who was at that meeting in Abuja claimed ignorance of TSA’s audit mechanisms and procedures.

    Most people who are a bit tech savvy know that essentially, the architecture of an electronics based fund collection and disbursement system, like TSA, is designed in such a way that there are trails for every transaction on the platform in real time.

    So the process of monitoring what TSA has processed does not need any brouhaha or celebrated audit. All that is required is a request from the authorities to those that administer the system for details of transaction records. (A printout can then be made available if necessary.)

    It is instructive that, till date, TSA is the most significant audit imperative in the 57-year history of Nigeria. Indeed, an interesting fact about TSA is that unlike in the past when the Federal Government had to wait till the end of the year (or several years) before revenue collection and disbursement audits could take place, with TSA, records can be made available anytime.

    Also, with TSA, receipts for payments into government coffers are also available online and in real time. Indeed, the introduction of TSA makes it unnecessary for auditors to make endless journeys from ministry to ministry in the name of audit since most payments to government are routed and receipted real time as the funds hit the federation account at the collection port (in most cases banks).

    In the past, powerful interests were able to print fake government receipts for transactions that were never paid for. But with TSA, that is impossible because receipts are generated, serialised and authenticated electronically. When government funds are paid into the commercial banking system, unique reference numbers are automatically generated, that helps the accounting and vetting process.

    Apart from that, lost receipts can be reprinted from any part of the world. All the individual who paid the bill needs to do is to log in his details into the portal and the original receipt will reappear and can be reprinted.

    So far, TSA (and the electronic platform upon which it runs) has addressed the challenges that it was set up to fix. However, the major problem the policy faces is that those who are supposed to own it have not done so religiously.

    Even though the policy is somewhat a master stroke of the Buhari-led administration, no one within the administration is taking responsibility for telling its success story.

    Indeed, the ministers of information and finance, as well as the Attorney General of the Federation should be at the forefront of informing Nigerians about the workings of the policy. They should also be advertising it to other African countries as the poster child of better public sector financial management as prescribed by the World Bank.

    TSA also presents an opportunity for Nigeria to export a locally developed technology that had processed an estimated N7trillion for the Federal Government as of March 2017. In the past, Nigeria used to have a vibrant technical aid corp., today, TSA presents an opportunity to export technology that can aid the financial processes of other African countries.

    So, focus should be more on government agencies and parastatals which are not complying with the TSA directive rather than on an audit. Because as things stand currently, a number of government arms have failed to adopt the TSA and still maintain accounts that are separate from TSA.

    Like the confusion that went with the request for an elaborate audit, there are still a lot of misconceptions about TSA informed by lack of information.

    At present, there are at least three outstanding misconceptions about what the TSA is and how it operates. The first and most enshrined is that the TSA came into effect two years ago. This is untrue. What is fact is that the Federal Government began to use SystemSpecs’ Remita software which is the backbone upon which TSA runs five years ago. Albeit, back then the platform was used primarily to process government payments strictly.

    TSA’s use as a revenue collection system (which is its most important use) started in September 2015 when President Buhari gave the go ahead.

    Another misconception about TSA is that it holds government funds somewhere in the Central Bank of Nigeria. To this end, there have been comments that suggest that TSA traps funds. Nothing can be further from the truth.

    The reality is that what the TSA really does is to provide a concise platform that sees to it that all payments to government are captured in one account, from which funds are also distributed to government agencies and projects. So the account is never static, it’s a flow. Funds flow in and out of the system on a daily basis. What Systemspecs’ application does it to keep track of those funds, ensure that proper records are kept, and provides an electronically precise and robust software that drives the whole process. In essence, it serves as a form of gateway. All funds flowing to government must flow through and be captured by it.

    What this does is that it makes it easier at each point in time to point out the government agency and parastatals that are not contributing to the government purse. It also points to where funds are being allocated. Therefore, the focus of the authorities should not be just an audit because TSA is not a single account that is unknown, but that which has records that are free to the public especially now that there are laws that prohibit the hoarding of information that pertains to government.

    The real issue is that there should be a query of those agents of government who have deemed it unimportant to imbibe TSA. Why, for instance, would the Controller General of Customs still keep an account separate from the TSA?

    The process of setting up the TSA started in 2010. It began with the setting up of the TSA Inter-Ministerial Technical Committee. Following this committee’s work, the Federal Government announced in late 2011 the commencement of the TSA by January 2012. In this regard, the CBN was requested to provide necessary electronic funds transfer platforms for the TSA. In preparation for this full implementation, the Office of the Accountant General of the Federation required a system that could collate and manage its payment process; while the CBN required a system that could interface with the Office of the Accountant General of the Federation for the settlement of its payment instructions. Unfortunately, neither agency had such a system.

    To resolve this challenge, a CBN interdepartmental committee was set up in September 2011 to identify and review the options available to the bank. After thorough consideration, the committee found that only two licensed payment system providers had the potential to provide the services required by both the CBN and the Office of the Accountant General of the Federation these companies were: the Nigerian Interbank Settlement System (NIBS) and SystemSpecs Limited. Both companies were invited by the CBN inter-ministerial committees to make presentations and ascertain if they could provide the service required. After the discussions, demonstrations and verification of their claims, it was discovered that only SystemSpecs had the competence to handle the tasks as it already had a product handling such transactions. Hence in October 2011, the management of the CBN approved Systemspecs’ platform for the operation of the TSA.

    So far, several nations other than Nigeria have made efforts to understudy and adopt the mechanisms, and workings of the TSA, howbeit, there is still a lot of misconception about the working of the payment and receipt system among many Nigerians. The sensitisation effort obviously needs to be stepped up.

     

    Martins is a public affairs analyst based in Lagos

  • TSA: Fed Govt consolidates 20,000 accounts

    TSA: Fed Govt consolidates 20,000 accounts

    TWO years after it collapsed all the accounts of Ministries, Departments and Agencies (MDA) into the Treasury Single Account (TSA), the Federal Government has consolidated over 20,000 public sector bank accounts. It has also been saving N4.7 billion monthly from bank charges.

    The Accountant-General of the Federation (AGF, Ahmed Idris, spoke yesterday on the gains of TSA  in Abuja at a two-day workshop for finance reporters on the TSA and other public financial management reforms.

    Ahmed stated that by aggressively implementing of the TSA across board, the Federal Government has been able to eliminate multiple banking arrangements that were hitherto used as fraud channels.

    The consolidation of public sector accounts, the AGF said, “has further brought about transparency and effective tracking of government revenues”.

    He said the government was incurring N4.7 billion as monthly bank charges, interest on loans and account maintenance fees among others, before the policy was introduced into the public sector as part of the public financial management reforms.

    Idris said: “By withdrawing public funds from banks, the Federal Government hasmade it difficult to impose any charges on government funds as it now maintains a single account for all its agencies with the Central Bank of Nigeria (CBN).

    The AGF said the TSA policy has helped the government to overcome indiscriminate borrowings by MDAs, thereby saving the government a lot of bank charges associated with these borrowings.

    He said:  “As part of our stewardship, the TSA has enabled us to make tremendous gains to the Federal Government and to the Nigerian economy. We have successfully eliminated multiple banking arrangements, resulting in consolidation of over 20,000 bank accounts which were spread over Deposit Money banks across the country.”

    Stiff implementation of the TSA policy, he said, has led to the blocking of leakages and abuse which characterised the public finance management prior to its advent.

    On the payment of backlogs of promotion arrears for civil servants, the AGF stated that that the government has commenced the process of making payments to affected civil servants.

    He said a new approach has been adopted to check the rate of abuse of the process.

    “Henceforth, the accounts of those that were promoted and are being owed arrears would be credited directly after all the necessary verification exercise”, he said.

    To this end, about N13.2 billion, he said “had been provided for the payments of backlogs of promotion for civil servants.”

    Idris also disclosed that his Office has concluded plans with Hewlett-Packard (HP) for the training and certification of its software engineers and prospective Nigerians.

  • Govt counts gains as TSA hits N7tr

    Govt counts gains as TSA hits N7tr

    The impact of the Treasury Single Account (TSA) depends on who is telling the story. For the government, the TSA has remained a masterstroke against corruption and misapplication of public funds. But for commercial banks, which hitherto relied on public funds to post huge profits, the policy has been a nightmare. The nearly two years’ gains of full implementation of the TSA became feasible after SystemSpecs deployed Remita, a local technology software, to drive the project. So far, over N7 trillion has entered the government coffers, giving the country more control of its earnings, writes COLLINS NWEZE.

    It has been almost two years since the Federal Government began full implementation of the Treasury Single Account (TSA).

    The feedback shows that it is one of the best economic decisions ever taken by the government to ensure  accountability and transparency in the management of public funds.

    Besides, it is believed that central to the growth of every economy is proper management of funds and transparency, especially on the part of the government.

    Before the coming of TSA in September 2015, Nigeria’s notoriety in the management of public funds brought the country to the state of near-economic-collapse. The TSA has so far proven to be the most significant achievement of the current administration.

    The backbone of the functionality of TSA in Nigeria is Remita, an e-payment solution adopted by the Central Bank of Nigeria (CBN) for the collection and payment of funds for the Federal Government, and used by all commercial banks and over 500 microfinance banks. Remita is aimed at revolutionising the e-payment industry and its developer, SystemSpecs, has been described as the unsung hero of Nigeria’s financial reform.

    The TSA has been able to consolidate all inflows from government agencies using a single account-Consolidated Revenue Account (CRA) at the CBN. The effectiveness of the TSA since its introduction about two years ago has proven that a level of sanity can be achieved in the use of public funds.

    Analysts believe that the TSA has helped the Buhari administration’s anti-corruption fight by flushing out ghost workers and saving the economy from imminent collapse.

    “Remita processes over $30 billion worth of transactions every year, and that’s just within Nigeria,” SystemSpecs’ Executive Director Deremi Atanda said at the yearly Gulf International Technology Exhibition (GITEX) in Dubai, United Arab Emirate (UAE).

    He continued: “There’s also a roadmap to take Remita to Africa. So, if you have a vision to be part of revolutionising payments in Africa at whatever level, driving financial inclusion at the national level, savings, micro-savings and micro-transactions, Remita is best placed to help you achieve that.”

    An English newspaper, The Economist, says: “TSA may be the biggest coup of all. It replaced a labyrinth of government piggy banks, giving Nigeria more control of its earnings.”

    Launched in 2006, Remita is an electronic platform that helps the government, corporate organisations, Small and Medium Enterprises (SMEs) and individuals to make and receive payments without stress. It aggregates multiple bank accounts, giving customers the ability to perform complete e-Transactions.

    About two years after its implementation kicked off, the policy has shored up the government’s earnings by N7 trillion by the end of Marc. The TSA is a bank account or a set of linked bank accounts through which the government transacts all its receipts and payments and gets consolidated view of its financial status at any given time.

    The TSA policy – initiated by  former President Goodluck Jonathan administration but implemented by his successor, the Buhari’s administration – stipulates that all government taxes, levies and tariffs should be deposited with the CBN.

    The funds would subsequently be disbursed to MDAs based on approved rules to ensure accountability in the management of government resources. Several attempts to adopt the TSA in the past were unsuccessful. Reason: the CBN lacked the technological-know-how to manage the retail aspect of the policy. An e-technology platform, Real-time gross settlement systems (RTGS), initially expected to drive the payment leg of TSA policy was unsuitable for retail payments.

    Also, TSA monthly helps the government to save over N4 billion, previously expended on maintaining numerous accounts across the country.

    Prior to this development, every organisation that collects money for the Federal Government stacked cash in Deposit Money Banks (DMBs) where it is left to yield interest over the years for faceless individuals and groups while the government was starved of the funds meant for developmental projects.

    However, one major development that has contributed immensely to the robustness and efficiency of TSA is its integration with financial technology (FinTech). FinTech is an economic industry composed of companies that are trying to provide new financial solutions, which was previously the prerogative of banks. These companies are active in various domains, but they have one common attribute, which is: building and implementing technology, which is used to make financial markets and systems more efficient.

     

    TSA boosts FinTech sector

    Analysts explained that apart from lowering the level of corruption, TSA exposes the emerging potential of Nigeria’s FinTech Industry. As global competition rises and technology advances, the need to leverage IT for co-creation of value is a major factor for development.

    According to reports, FinTech is one of the fastest-growing industries in the world. It has grown into a N22.3 billion industry with a 75 per cent growth rate recorded in 2015. Global investment in FinTech ventures in the first quarter of last year reached $5.3 billion, a 67 percent increase over the same period in 2015, and the percentage of investments going to FinTech firms in Europe and Asia-Pacific nearly doubled to 62 per cent, as reported by Accenture.

    In a more recent development, The Bank of England has opened up the UK’s payments systems – the “plumbing”, which facilitates same day money transfers between banks – to organisations that are not banks, giving FinTech startups another step up in their challenge to traditional banks. It’s the latest move by the UK’s financial authorities to foster technology innovation and “level the playing field” between the established institutions and newer ones. Nigeria can hopefully take a cue from this.

    The TSA journey has been a remarkable one. However, huge bottlenecks created by self-serving interests still militate against the full implementation of the policy. Despite its huge gains, the government is not treating the policy as a prized national asset that is helping to drive accountability and stock-taking. There are still some pockets of revenue leakages and financial impropriety all around. TSA is not primed to handle forex for now and this is a major excuse for universities requesting for exemption since their grants are mainly in foreign currencies. Although, SystemSpecs Limited has the mandate to provide the technology that can power the forex component of the policy, it has not been granted approval by the government to do this.

    For instance, the Management of the National Health Insurance Scheme (NHIS) earlier claimed that TSA stifles the fluidity of funds meant for the healthcare of enrollees, until an in-depth probe revealed underhand payments running into billions of Naira to dubious HMOs which were not remitted to hospitals where enrollees were supposed to get treatment. The list of defaulters is growing and will continue to, except the government takes proactive measures to ensure sundry compliance with its directive for remittance of all public funds into the TSA.

    While we must commend the Federal Government for showing some interest in the growth of FinTech with its investment in ICT universities, an ICT development bank and a $1 billion ICT firm, the government should not rest on its oars. Rather, it should improve its sense of ownership of the policy as a home-grown FinTech solution whose gains we can readily count and chart the course for more FinTech investments in Nigeria.

    SystemSpecs’s Chief Executive Officer, John Obaro, said the deployment of Remita has reduced the government’s debt servicing costs, lowered liquidity reserve needs and boosted effective use of surplus cash.

    Obaro said his firm would continue to deliver on the TSA service terms of contract with the CBN despite being owed its earned fees on e-collections. He disclosed that some bank branches have started to turn down collection of government deposits due to the non-payment of these agreed fees.

    Obaro said: “From our end, we have continued to provide and support the Remita platform, 24 hours a day and seven days a week, for use by citizens for all their payments to the Federal Government. Our continued support for the TSA is fuelled by our belief in the enormous benefits the Remita software brings to the implementation of TSA to the average citizen.

    “We must admit though that we are excited and further driven by the fact that our indigenous Remita software has succeeded in powering the technological backbone for such a successful and strategic national initiative, along with other well-meaning Nigerians, we do not want this to fail.”

    Presenting a paper at a workshop organised in Abuja by the Office of the Accountant-General of the Federation and the World Bank, Prof. Stephen Ocheni said achieving  efficient allocation of resources and the stabilisation of the business cycle remained great challenges facing most parts of the world, particularly developing countries, such as Nigeria.

    In the paper obtained by The Nation titled: “Treasury Single Account: A catalyst for public financial management in Nigeria”, Ocheni of Public Sector Accounting, Kogi State University, Anyigba, said: “An important factor for efficient management and control of government’s cash resources is a unified structure of government banking.

    “Such unified banking arrangements should be designed to minimise the cost of government borrowing and maximise the opportunity cost of cash resources. This requires that cash received is made available for carrying out government’s expenditure programmes and making payments in a timely manner.”

    The Buhari administration has initiated and implemented the TSA and other economic policies for better management of national resources and the fight against corruption.  Besides the TSA, the government also introduced the Government Integrated Financial Management Information System (GIFMIS), Automated Accounting Transaction Recording and Reporting System (ATRRS), Integrated Payroll and Personnel Information System (IPPIS), International Public Sector Accounting Standard (IPSAS), among others to promote public financial management systems.

    The government began TSA implementation with the e-Payment component in April 2012 and its e-collections components followed in January, last year. In September 15, 2015, the government set a deadline for full compliance with the policy by all MDAs.

    According to Ocheni, the policy facilitates better fiscal and monetary policy coordination as well as better reconciliation of fiscal and banking data, which in turn improves the quality of fiscal information. The TSA also cuts the debt servicing costs and eradicates financial misappropriation in the public sector.

     

  • TSA: Govt saves N4b bank charges monthly

    TSA: Govt saves N4b bank charges monthly

    The Treasury Single Account (TSA) policy has enabled the Federal Government to save N4billion monthly from charges that banks collected on its numerous accounts, it was learnt at the weekend.

    Besides, more than N7 trillion has been remitted by banks to the government’s TSA account in compliance with the policy.

    The figure,  as at March, showed that the TSA had been able to consolidate all inflows from government agencies using a single account-Consolidated Revenue Account (CRA), at the Central Bank of Nigeria (CBN).

    The TSA is a bank account or a set of linked bank accounts through which the government transacts all its receipts and payments and gets a consolidated view of its cash position at any given time.

    The implementation of TSA was a nightmare for government until September 2015, when SystemSpecs deployed Remita, locally developed payment software, to drive the policy execution.

    Before TSA, every organisation that collects money payable to the Federal government stacked cash in Deposit Money Banks (DMBs) where they were left to yield interest over the years for faceless individuals and groups while the Federal Government was starved of funds meant for developmental projects.

    The Federal High Court in Lagos two weeks ago, ordered seven commercial lenders to temporarily remit a total of $793.2 million allegedly hidden by them in contravention of the TSA policy.

    Justice Chuka Obiozor ordered the banks to remit the various amounts allegedly being kept illegally in their custody to the designated Federal Government’s asset recovery dollars account domiciled with the apex bank.

    The concerned banks are United Bank for Africa Plc, Diamond Bank Plc, Skye Bank Plc, First Bank Limited, Fidelity Bank Plc, Keystone Bank Limited and Sterling Bank Plc. However, the lenders have all denied keeping such funds, insisting they have remitted the cash to the regulator.

    Head of Treasury at Ecobank Nigeria, Olakunle Ezun, said the TSA has remained a major challenge for most banks, especially smaller lenders.

    He said the TSA has reduced banks’ balance sheet positions and income.

    Ezun said: “TSA remains a minus for banks, and plus for government,” he disclosed.

    He said: “A lot of banks did not honour their obligations, because of liquidity problems. But after a while, some banks met with the CBN and asked to pay gradually. The CBN later gave them forbearance, but increased liquidity in the system, I think they are now expected to remit the cash,” he said.

    Ezun said TSA remains a minus for banks, and plus for government, adding that the affected lenders will have to source the dollar from the parallel market because the law does not allow them to bid at the official market for such funds.

    “A lot of the affected banks will have to source for the funds at the parallel market,  if they do not have the required cash. The banks that were caught in the web were those facing foreign exchange crisis, which made it difficult for them to remit in totality to the CBN,” he said.

    Defending the initiative, Executive Director, SystemSpecs, Adermi Atanda, said the TSA is just a concept, a way and means of banking.

    He said: “So, TSA is just set of arrangements of knowing where your funds are, aggregating them for optimum benefits to the economy. So, that in itself, does not make it threat to banking in any way. It is just that government needs to get more efficient by leveraging on technology, and it goes beyond the banks. It touches how people are able to relate with governments, the ease of payment, delivery of service, accountability of government revenues, taxation and making funds available for national development,” he said.