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Tag: TSA

TSA: New face of probity across Africa?

The Treasury Single Account (TSA) policy makes headlines on our news pages and social networks every day, but this is one instance where quantity doesn’t exactly represent fact. After all, most of what I read revolves around how the policy is stifling growth, delaying salaries and setting back Nigeria’s progress. But funny enough, most of these critics also advocate a change in public policy, changes that can instill discipline and accountability in Nigeria’s financial system. How ironic is that?

Granted, government makes anti-people policies most of the time, but I’m not sure the TSA is one of them. It just happens to be a policy adopted when the price of crude oil on the international market is dwindling and Nigeria has not diversified its revenue sources enough to avoid feeling the pinch. Just last week, the Federal Government announced it had recovered N4.3 trillion of its cash assets since it adopted the policy. Surely, that cannot be a bad development. Even better, it denies government the ready excuse that it lacks the financial wherewithal to run the economy.

But that is an issue for another day. I thought it wise to correct the impression that TSA is some fly-by-night policy that is peculiar to Nigeria. On the contrary, the policy has also been adopted by several developing nations in Africa that wish to instill a culture of probity and accountability in their financial systems. Take Rwanda for instance. In 2005, it adopted a zero-balance drawing system which requires that its ministries and budget agencies’ accounts are held in the National Bank of Rwanda. The policy stipulates that all ministries and budget agencies begin a new fiscal year with zero cash balance on their accounts. Thus, cash transfers are made from the treasury to the ministries’ accounts monthly, and the financial transactions they (ministries) make are restricted to their allocations for the month. To make the policy more foolproof, daily checks are conducted to ensure that whatever funds left at the close of business are transferred to the Treasury for re-issue the following day to drive transparency.

Uganda adopted its TSA policy in 2013 in accordance with section 4 (1) of its Public Finance and Accountability Act (2003) which states that “the Minister responsible for Finance is responsible for maintaining transparent systems which, among others, ensures the efficient and cost effective cash management of the Consolidated Fund, any other fund established under the Act and other public moneys.” The policy in Uganda started out aggregating all government cash balances into a set of linked bank accounts, with the long-term plan being a single bank account where all revenues would flow from and payments made. Before the adoption of the policy, the country’s MDAs operated over 2000 accounts which were dormant and became a breeding ground for corruption and misappropriation of public funds.

Last year, Kenya announced its proposed adoption of a TSA policy in reaction to the loss of billions of dollars in its public system. Its earlier Integrated Financial Management Information System (IFMIS) had proved ineffective in waging and winning this war, much like previous financial management systems had failed to curb corruption in the Nigerian public sector. Thanks to its TSA policy, Kenya proposed National Treasury and County Treasury Single Accounts, which would both be housed at the Central Bank of Kenya and align with the government’s renewed technological focus.

So rather than flay the Gen. Muhammadu Buhari administration’s adoption of TSA based on hearsay, I think we should all do some research and have more informed opinions about the policy. So far, the TSA has returned N4.3 trillion into government coffers. As disclosed by the Accountant General of the Federation, Alhaji Ahmed, Idris earlier last week, the policy has reduced inflation and reversed the loss of a whopping N70 billion to failed banks in 2011 when it was not in force.

Indeed, government needs to sensitise the public on why the TSA is the only choice for any forward-looking African country in the 21^st century. More importantly, it is not enough for government to deposit these funds into the TSA and reel out how much we are recovering every quarter. We also need to see how these funds are put to work and make a difference in life as we have always known it as Nigerians.

Olowokere is a public affairs analyst based in Abuja

November 14, 2016
Treasury Single Account: Pains, gains

For years, the Treasury Single Account (TSA) existed only in the history books. But in September, last year, the Federal Government mustered the political will to fully implements the controversial policy. The TSA has made many banks to cry; Ministries, Departments and Agencies (MDAs) to groan and government’s coffer to burst. COLLINS NWEZE unveils the TSA and what its full implementation means for businesses and control of government’s cash resources.

It’s nearly a year of pains for the Federal University of Agriculture, Abeokuta (FUNAAB) since its $2 million grant from the Bill and Melinda Gates Funded Cassava Adding Value Project (CAVA) was trapped in theTreasury Single Account (TSA), the pool account for all government’s revenues.

The institution has been haggling with the Office of the Accountant-General of the Federation (OAGF) on how to resolve the quagmire while the projects the funds were meant to be channelled are suffering.

The FUNAAB Vice-Chancellor, Prof. Olusola Oyewole admitted that the TSA is impeding research in universities as institutions cannot access their grants on time, while several funds from donor agencies were diverted to countries with less transactions difficulties.

“You can imagine the shock that our universities have, waking up one day to find out that our funds have been moved away from the commercial banks to an account that we can’t even identify,” he lamented.

But the OAGF seems helpless with the situation, insisting that the policy must take its course despite the implications on the institution.

The CAVA funds, The Nation further leant, had finally been lodged at the Standard Chartered Bank in London, by the Central Bank of Nigeria (CBN) on behalf of FUNAAB, while the institution said it was still trying to access the fund, as at press time.

Welcome to TSA, Nigeria’s new accountability and most feared sheriff in town.

For decades, many emerging markets and low-income countries have fragmented systems for handling government’s receipts and payments. In these countries, the ministries of finance/treasury lack a unified view and centralised control over government’s cash resources. The cash lies idle for months in different bank accounts held by spending agencies while the government continues to borrow to execute its budget.

That was the case with Nigeria until September 2015 when the Federal Government began the full implementation of TSA. And since then, the policy has come with pains, gains and controversies depending on which side of the divide it was viewed.

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.

But for commercial banks which had for years relied on cheap government deposits to post huge profits, universities that secure foreign grants for research, and Ministries, Departments and Agencies (MDAs) which have to suffer delays in getting transactions, the TSA remains a nightmare.

The lenders have since the full implementation of the policy began, lost huge revenues and deposits that threatened the continued existence of many mid-tier banks.

Confirming the pains of TSA on banks, CBN Director, Banking Supervision, Mrs. Tokunbo Martins, agreed that the TSA regime precipitated some unintended consequences, affecting the operations of banks, especially regarding deposit depletion, asset quality, decrease in revenues and liquidity stress.

She said the aggregate deposit transferred to the CBN from the inception of the TSA regime to March 2016, was N2.67 trillion. This sum, which represents 15.14 per cent of the total deposits of commercial banks of N17.63 trillion as at April 30, constitutes the volume of deposits “lost” by banks as a fallout of the implementation of the TSA regime.

“This loss impacted banks differently in line with the proportion of their balance sheet that was sustained with Federal Government of Nigeria (FGN) deposits. Due to its large size and low cost, Federal Government of Nigeria deposits were a huge source of revenue for banks. Although specific data on revenue attributable to FGN deposits is not available, a good proxy is the yield on Treasury Bills, which is currently around 14 per cent,” she disclosed at the CBN-Financial Institutions Training Centre (FITC) continuous education programme for Directors of Banks and Other Financial Institutions, held in Lagos at the weekend.

Mrs Martins said assuming the entire government deposits were invested by the banks in Treasury Bills, at the current yield of 14 per cent, it would generate interest income of about N374 billion for the banks. This figure, she said, provides an indication of revenue that is no longer available to commercial banks due to introduction of TSA.

She explained that based on the large quantum of revenue earned from government deposits, majority of commercial banks had created teams with responsibility for mobilising public sector funds.

“These teams, which were large and significant, were in some cases directly supervised by top management staff. The introduction of the TSA regime and resultant depletion in government deposits and related revenue has made these teams unprofitable and their existence untenable. Therefore, most banks had scaled back or disbanded the teams and, in extreme cases, released staff deployed to the teams,” she said.

The CBN director said the TSA regime impacted the liquidity level in the banking system due to the attendant remittance of cash, which constitutes a major portion of banks’ liquid assets to the apex bank. “Furthermore, as part of risk management, banks with large government deposits mitigated their positions by investing the liability in T-bills and FGN bonds. These banks had to liquidate these investments in order to comply with the TSA regime, thereby further reducing their stock of liquid assets,” she said.

Mrs Martins explained that with the introduction of the TSA regime, easy and risk-free revenue that was hitherto available to banks via investment of FGN deposits in Treasury Bills and Government Bonds had been restricted.

“Therefore, banks must become innovative in generating revenue to support their operations and provide returns to their shareholders. This development also presents an opportunity for banks to return to their traditional role of savings aggregation and financial inter-mediation. Banks should thus strive to increase the size of their loan books in order to increase their interest and fees income,” Mrs Martins said.

Managing Director, Wema Bank Plc, Segun Oloketuyi also recounted the impact of TSA on banks’ profitability and deposits. “I think over N2 trillion left the banking system for CBN. Without doubt, TSA has impacted the volume of deposit in the banking system. As you know, deposits are our raw material. Certainly, if the sector lost N2.1 or N2.2 trillion, it will definitely impact on the sector; you will see the impact of the liquidity on every institution. It is going to impact us differently. Wema Bank lost almost N50 billion to TSA, but if you look at our annual report in 2015, we grew deposit despite the loss.

‘’We recorded between 10 and 15 per cent growth in our deposit compared to 2014. TSA started in September 2015, but we were still able to grow; so, what that means is that we would have grown higher,” he said at a meeting with financial journalists in Lagos.

“Our deposit still grows, if I have the N50 billion or thereabout in the system it would have helped my growth better than it was, but the impacts were not such that we were not able to meet our deposit obligation, neither were we short on the liquidity ratio required of the bank. Certainly, we lost some money to TSA that would have otherwise helped the performance of the bank better than we recorded in 2015,” he added.

CBN’s fines hit banks

Aside the loss of deposits, many commercial banks had been sanctioned for breaching TSA rules. FirstBank, United Bank for Africa, Skye Bank had all been fined by the CBN for non-compliance with the TSA rule.

The CBN had fined FirstBank and UBA the sum of N4.819 billion. The CBN imposed a penalty of N1.87 billion on FirstBank, UBA was fined N2.94 billion. FirstBank allegedly concealed N37.5 billion belonging to the Nigerian National Petroleum Corporation’s (NNPC) while UBA concealed N58.8 billion instead of remitting it to the TSA as directed.

The CBN has also imposed a fine of N4 billion on Skye Bank for concealing funds belonging to Ministries, Departments and Agencies (MDAs). Skye Bank allegedly failed to report MDAs’ balances amounting to N40 billion as at October 23, last year, more than a month after the TSA deadline had expired on September 15.

The CBN defended N8.819 billion fines slammed collectively on three lenders.

CBN Director, Corporate Services, Adebayo Adelabu who made the apex bank’s position known during the Bank Directors’ Association of Nigeria (BDAN) stakeholders’ forum held in Lagos, said some penalties for regulatory breaches are at the discretion of the CBN, saying the regulator acted based on the gravity of the offence committed by the lenders.

Speaking on the theme: Oversight functions of the board: Effectively managing key external relations, he explained that although the Bank and Other Financial Institutions Act (BOFIA) stipulates specific penalties for offences, the law also makes room for open-ended penalties, where the CBN is allowed to act based on what it thinks is the right punishment for offenders.

“Some of the offences are open-ended depending on gravity of offences but it is left at the discretion of the regulator. But the CBN has been considerate in fining the banks,” he said.

There were also controversies concerning fees charged by stakeholders implementing the TSA project. SystemSpecs, the owner company of Remita, the e-payment and e-collection software deployed by the Federal Government to drive the TSA said only N7.62 billion was taken as fees by the three implementers of the project against N25 billion claimed by some legislators.

In a document obtained by The Nation, the firm also described the N2.5 trillion transaction volume as false, saying only N1.36 trillion passed through 20 participating banks from inception of the project to date.

The top executive said that at the commencement of the project in May 2012, it was agreed that one per cent of the sums collected from MDAs would be deducted and shared between SystemSpecs, the affected banks and the CBN in ratios of .5 per cent, .4 per cent and .1 per cent respectively.

A copy of the service agreement between SystemSpecs Limited and CBN dated December 2013, read in part: “SystemSpecs and CBN are entering into a mutually beneficial relationship for the purpose of deploying and integrating Remita e-Payment platform and T24 Banking application to facilitate and support electronic payments and revenue collection of Federal Government Ministries, Departments and Agencies (MDAs) through seamless interface with Government Integrated Financial Management Information System application in accordance with the terms and conditions set out in this agreement”.

System Specs was engaged to provide the Payment Gateway for TSA in 2011. While the payment leg of TSA began in January 2012, the collection component did not start as scheduled due to the resistance from a number of quarters and the absence of the political will to push this through.

Besides the issue of fees on transactions, there were also complaints that the Remita platform delays the payment plans of MDAs and other government agencies that rely on it to initiate and approve payment transactions.

“Once the transactions are finalised, MDA funds at CBN are accessed and the transfer of funds to beneficiary accounts in various financial institutions begins. Unfortunately, the RTGS server at CBN has experienced some issues recently, which has substantially impaired the settlement of transactions across multiple payment platforms (as all banks are aware), one of which is Remita. CBN has been managing the situation and providing updates on service status to stakeholders. The delay in consummating transactions at CBN has inadvertently increased transaction time on the platform, causing interference to efficient service that Remita users have become accustomed to,” an industry source who understands the workings of the platform, but not in a position to speak on the matter, told The Nation in confidence. “Remita continues to deliver on its mandate and objective of ensuring convenient, secure and efficient payment transactions (Inflows and Outflows). However, Remita is part of a financial ecosystem, and like other service providers, relies on collaboration with other partners (CBN, Commercial Banks, Card Scheme issuers/operators, Payment Services Providers among others,” the source said.

CBN Director, Banking and Payments, ‘Dipo Fatokun, said there are no exemptions given to any MDA on TSA implementation. “On the issue of whether there are exceptions on the TSA or not, for the Federal Government, there are no exemptions. All MDAs are expected to be part of the TSA but we need to clarify something. Even under TSA, banks customers are not expected to walk up to the CBN to make deposits. So even under TSA, the deposit money banks still have a role to play, the only thing is that they are not expected to keep those balances, they still have those accounts,” he explained during a conference on e-payment in Lagos.

He said that cash deposits, or transfers can be made by companies or individuals into an MDA account in a commercial bank and the fund is subsequently swept to a designated account of the Federal Government in the CBN. The commercial bank is expected to transfer that money to the account in the CBN, having deducted its charges which have not been agreed on.

He disclosed that the Federal Inland Revenue Service and Customs had their accounts with the CBN, long even before the commencement of TSA. “So, if you go to a bank and make payment to for Customs duties, the money does not sit in the bank, it actually flows into the CBN, same with the FIRS and that is why even when the TSA was deployed, there was little or no noise about these organisations because all their revenues have actually been coming to the CBN,” he disclosed.

The CBN, he said, was also monitoring the banks to ensure full compliance with the TSA rule. “We are checking the banks. We have about four departments checking on the banks. For TSA specifically, we have the Other Financial Institutions (OFIS) and Banking Supervision, Financial Policy and Regulation, Consumer Protection departments monitoring the banks. They monitor various assets and operations because these are related and management is informed. And I know that with the penalties and sanctions that the banks have suffered for breaching the TSA, I do not think any of them would want to dare us,” he asserted.

Other stakeholders speak

TSA gains

By March 2016, President Muhammadu Buhari said the Federal Government had mopped up over N3 trillion as revenue accruals since the TSA policy began. Other stakeholders have also listed the gains of the policy since inception.

Confirming the development, SystemSpecs CEO, John Obaro, said the funds came from 17,000 MDAs’ accounts under the TSA project. He said the funds came from deployment of Remita, the software powering the TSA to which 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 all of its earned fees on e-collections since March 2015.

He disclosed that some bank branches have started to turn down collection of government deposits due to the non-payment of these agreed fees. “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 fueled by our belief in the enormous benefits the Remita software brings to the implementation of TSA to the average citizen,” he said.

“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”.

In a report obtained by The Nation titled: Treasury Single Account: A Catalyst for Public Financial Management in Nigeria presented by Prof. Stephen Ocheni of Public Sector Accounting, Kogi State University, Anyigba, at a workshop organised by the OAGF and the World Bank in Abuja, he said a great challenge facing most parts of the world and particularly the developing countries like Nigeria is how to achieve efficient allocation of resources as well as stabilisation of the business cycles.

“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 cash received is available for carrying out government’s expenditure programmes and making payments in a timely manner,” he said.

Nigeria initiated and implemented the TSA and other series of economic policies to assist in the better management of national resources and help fight corruption. Besides the TSA, government also instituted 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 Federal Government of Nigeria commenced the implementation of TSA with the e-Payment component in April 2012 while the e-collections components of TSA began in January, 2015. The government also set September 15, 2015 deadline for full compliance.

Ocheni said the TSA 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.

“The full implementation of the TSA will not be hurting banks. It will only hurt establishments that purport and pretend to be banks but have failed to understand banking and do what bankers do elsewhere. It is an opportunity for banks to refocus on the original purposes for which they were set up to collect depositors’ funds, keep them safe; engage in intermediation to create wealth and jobs for the economy and in the process earn profit for themselves,” he said.

Beyond transparency and accountability, the TSA introduces economy and efficiency into overall management of public finances and this will in the long run lead to effectiveness of government spending since it places government in a better position to realise overall policy goals.

He believes that for TSA policy to be maximised, it needs to be accompanied with the Fiscal Sunshine Bill, which if enacted will open up the financial activities of government in a way that there will be no more hiding place for those who divert or loot government money.

For instance, with Fiscal Sunshine Act in place, budgeting process and implementation, including contract awards, should be in the open for Nigerians to see both how revenues are generated and how public money is being spent by those in government, and why.

“The TSA enhances the transparency of the government’s banking arrangements by ensuring that all end-of-the-day balances are electronically swept into the TSA. Establishing a TSA may require hard decisions, such as closing the existing bank accounts of spending units, therefore for a successful TSA implementation, explicit and strong support for reform of government banking arrangements by the Federal Government is recommended,” he added.

Tertiary institutions

confronts TSA

Tertiary institutions are already feeling the pangs of TSA. The policy stipulates that all the money they get must be centrally collected and withdrawals approved by the CBN. Under the TSA regime, institutions no longer have direct access to their funds, including research grants from international donor agencies.

At a press briefing in Lagos last month, ASUU President Prof Biodun Ogunyemi, complained that the TSA was retarding the progress of universities and promised to fight the government on the matter.

“As we have consistently argued, the implementation of the TSA is inimical to the well-being of universities. The policy has made it impossible for universities to draw research grants, run programmes based on endowment and transfer funds earmarked for staff development in universities locally and overseas.

“All our appeals to government to exempt universities from the TSA regime have fallen on deaf ears. Because of our abiding commitment to defending and protecting the university system, ASUU will go to any length to resist the continued implementation of TSA in our universities,” he said.

In response to enquiries, the Office of the Accountant General of the Federation, clarified the Outstanding issue of Federal University of Abeokuta’s grant for the Bill and Melinda Gates Funded Cassava Adding Value Project (CAVA) in which the institutions grant was delayed and moved to a foreign account due to TSA.

It explained that in line with the operational guidelines of the implementation of the TSA as approved by the Federal Government, the CBN opens a domiciliary account in favour of an MDA upon receipt of mandate from OAGF.

It is the CBN’s decision to choose in which bank to open the account based on agreed criteria and list of foreign correspondence banks. “Such funds that are domiciliary in nature are only kept by the foreign banks on behalf of the concerned MDAs. The process for opening foreign bank accounts may take up to four weeks in line with the terms and conditions of the foreign bank including and the banks Know-Your-Customer (KYC) requirements,” it said.

It said the OAGF and CBN are in the process of automating the payment and receipt processes of foreign components of TSA. “The new process shall empower each MDA to be able to access its domiciliary account through electronic channels as is currently done for all local payments. The new process shall be communicated to all MDAs as soon as it is finalised and the systems have been put in place.”

“It should be noted that the OAGF had since processed the Federal University of Abeokuta’s grant from Bill and Melinda Gates Funded Cassava Adding Value project (CAVA). The institution should accordingly follow the approved process to access the funds,” it said.

October 24, 2016
Row over FUNAAB’s ‘trapped’ $2m grant in TSA

The government may croak about the Treasury Single Account (TSA) but not so tertiary institutions, which are complaining about its implementation. The Federal University of Agriculture, Abeokuta (FUNAAB) says it has been unable to access its $2million research grant from the TSA since last year. But, the Office of the Accountant-General of the Federation states that the fund is available, report KOFOWOROLA BELO-OSAGIE and ERNEST NWOKOLO (Abeokuta).

There is no love lost between the Academic Staff Union of Universities (ASUU) and the Federal Government over the Treasury Single Account (TSA).

The policy was conceived in the twilight of the Goodluck Jonathan administration, but its implementation began under President Muhammadu Buhari’s administration.

The TSA seems to be causing problems for tertiary institutions. The policy stipulates that all the money they get must be centrally collected and withdrawals approved by the Central Bank of Nigeria (CBN). Under the TSA regime, institutions no longer have direct access to their funds, including research grants from international donor agencies.

At a press briefing in Lagos last month, ASUU President Prof Biodun Ogunyemi, complained that the TSA was retarding the progress of universities and promised to fight the government on the matter.

“As we have consistently argued, the implementation of the TSA is inimical to the well-being of universities. The policy has made it impossible for universities to draw research grants, run programmes based on endowment and transfer funds earmarked for staff development in universities locally and overseas.

“All our appeals to government to exempt universities from the TSA regime have fallen on deaf ears. Because of our abiding commitment to defending and protecting the university system, ASUU will go to any length to resist the continued implementation of TSA in our universities,” he said.

Vice-Chancellor (VC), Federal University of Agriculture, Abeokuta (FUNAAB) Prof Olusola Oyewole, is among administrators lamenting that TSA is impeding research in universities as institutions cannot access their research grants.

Oyewole said FUNAAB has over $2 million grants for the Cassava Adding Value for Africa (C:AVA) project funded by the Bill and Melinda Gates Foundation trapped in the TSA for almost one year.

“You can imagine the shock that our universities have, waking up one day to find out that our funds have been moved away from the commercial banks to an account that we can’t even identify,” he said.

He said through FUNAAB, the grant was meant to be disbursed to five African countries. However, since it was moved into the TSA, the institution has been unable to fulfil its coordinator role. The VC feared that the grant risked being moved from Nigeria to the United Kingdom.

FUNAAB’s Director of Grants Management Prof Kolawole Adebayo said the first phase of the C:AVA project, worth about $13 million, was led by the University of Greenwich from 2008 to 2014.

FUNAAB was to lead the second phase of the multi-million dollars multinational CAVA II Project, which started in 2014 and is to end in 2019.

Adebayo said apart from FUNAAB and the University of Greenwich, other institutions collaborating on the research are: Food Research Institute, Accra, Ghana; Food and Nutrition Centre, Dares Salaam, Tanzania; Africa Innovation Institute, Kampala, Uganda; Chancellor College, University of Malawi, Zomba, Malawi; and the International Institute of Tropical Agriculture (IITA), Ibadan.

The Nation gathered that there are about 78 other institutional partners in government, private and non-governmental sectors in all named countries.

The second phase was planned to cost about $18.8 million. Adebayo said the first two tranches of over $3.5 million each were released in 2014 and 2015 to FUNAAB.

However, he said the third tranche of over $3 million was released in June to the University of Greenwich because FUNAAB could not provide funds to all project partners since about $2 million was moved to the TSA last October.

He explained that while the first phase of the project promoted the value chains for High Quality Cassava Flour (HQCF) to the benefit of over 90,000 smallholder farmers and community processors in Nigeria, Ghana, Tanzania, Uganda and Malawi, the second phase was conceived to facilitate systems where smallholder – farmers in the five countries can sell over two million tons of fresh cassava roots (for conversion) into HQCF, starch, ethanol, livestock feed and others.

Adebayo lamented that the progress already recorded is not only threatened by the movement of C:AVA funds into the TSA by the Government, but the project itself has also been relocated to the University of Greenwich pending when the missing funds is found and retrieved.

“After struggling in vain for more than five months, without having access to funds, we took the very difficult and humbling decision to advice our funders of alternative courses to ensure that the project continues to thrive.

“As of now, the C:AVA Project has been relocated back to the University of Greenwich pending such times that FUNAAB will be able to access and use the funds trapped in the TSA,” he said.

Adebayo said efforts were made to access the money when it was moved to TSA by contacting the office of the Accountant General of the Federation but without respite.

Adebayo said: “When the fund was moved late last year, we reached out to our banker (Zenith Bank) who advised us that the fund had been moved to the Central Bank of Nigeria as per TSA directive. We immediately contacted the CBN and were advised to direct our enquiries to the Accountant General of the Federation. This we did promptly.

“For over four months, we kept reaching out to the Office of the Accountant General of the Federation until we were told that the CBN had been directed to open new accounts for the project at Standard Chartered Bank of London.

“Between June when we got this information and now (August) we have not had answers to our enquiry on when the funds taken to the TSA will be deposited in this new account and how we would access it for the project.”

Adebayo feared that the incident has dented the university’s image and may affect its ability to pursue foreign grants in future.

‘FUNAAB’s reputation that was carefully built over more than 25 years has been trampled upon by the implementation of the TSA. Not many universities in Africa have reached the peak that FUNAAB got to before TSA.

“I can tell you that last year, FUNAAB had a portfolio of over 40 research grants. In 2016, we have not won any. This is partly because our academics lost a major incentive.

“How can you bid to win international grants in this hostile environment and then have the government confiscate the fund without cause? If the environment does not provide confidence that funds will be used for the intended purpose, funders can find other means of channeling their funds.

“Huge damage has been done already. It will take time to remedy. First, we need to access the funds that have been confiscated. Then, we need to tell the whole world that our universities have autonomy that cannot be wantonly trampled by government.”

The Nation made enquiries about FUNAAB’s missing C:AVA fund at the Office of the Accountant-General of the Federation (OAGF) domiciled under the Federal Ministry of Finance, Abuja.

A statement signed by Mr Ifeanyi Okereke for the Deputy Director Press, OAGF, explained that the office was making efforts to ease access to funds through the TSA.

In response to question about the need to move the money to a foreign account outside Nigeria, Okeke explained that the money is kept by the foreign bank for the institution and is accessible.

The statement reads: “In line with the operational guidelines of the implementation of the TSA as approved by the Government, the CBN shall open a domiciliary account in favour of an MDA upon receipt of mandate from OAGF. CBN decide the bank in which to open the account based on agreed criteria and list of foreign correspondence banks. Such Funds that are domiciliary in nature are only kept by the foreign banks on behalf of the concerned MDAs. The process for opening foreign bank accounts may take up to four weeks in line with the terms and conditions of the foreign bank including and the banks Know-Your-Customer (KYC) requirements.

“Pending automation of the foreign currency component of TSA, all MDAs with such foreign domiciliary Accounts are allowed to operate their accounts through duly approved mandate(s) signed by authorized signatories of the MDAs.The MDAs shall access their own domiciliary account in foreign banks through the CBN. The domiciliary account of the MDA shall be debited for such payments and the MDAs will receive value for such payments within 48 hours. Where there is any issue with the mandate or transactions, the MDA shall be duly informed by CBN within 48 hours.”

To get the mandate, Okereke explained that the institution must provide the following documentations and management approvals: “Complete mandate signed by the authorized signatories; Payment Invoice; Purpose of payment; Amount in foreign currency; Duly completed (Form A, where the CBN is selling Foreign Exchange to the MDAs); Contract Agreement or Extract from FEC where applicable; Due Process Compliance (where applicable); Advance Payment counterpart; NOTAP- where applicable; Management approval; and Beneficiary bank details including IBA code, bank name, account number, Swift code – to be provided by CBN.”

Okereke said the procedure was transparent and should not undermine the integrity of institutions involved.

Asked if the procedure is not bureaucratic, Okereke explained that it was instituted to ensure transparency.

“The system in place is not bureaucratic or cumbersome. The essence of the new policy is to streamline the processes, make it more transparent and accountable. This new system has helped to check the incidences of double or multiple appropriations. Under this, MDAs receives funding from both the appropriation and donor countries for the same subhead. MDAs are accountable for the Funds received to both the Government and the donor Country or Organisation,” he said.

He however added that efforts are being made to automate the process so institutions can access their domiciliary accounts electronically.

“The OAGF and CBN are in the process of automating the payment and receipt processes of foreign components of TSA. The new process shall empower each MDA to be able to access its domiciliary account through electronic channels as is currently done for all local payments. The new process shall be communicated to all MDAs as soon as it is finalized and the systems have been put in place,” he said.

The statement also noted that the OAGF had completed the processing of the FUNAAB C:AVA fund and that the university could access the funds through laid down procedure.

“It should be noted that the Office of the Accountant-General of the Federation had since processed the Federal University of Abeokuta’s grant from Bill and Melinda Gates Funded Cassava Adding Value project (C:AVA). The institution should accordingly follow the approved process to access the funds,” the statement noted.

When contacted on Tuesday, Prof Adebayo said the university has not been informed how to access the fund.

“As at today, Tuesday, September 06, 2016 I have not been able to access the C:AVA II funds. It would help a lot if the Office of the Accountant General of the Federation can outline the ‘approved process’ to access the funds,” he said.

September 8, 2016
CBN and TSA
SIR: So much have been said about the propriety of domiciling Treasury Single Account (TSA), funds with the Central Bank of Nigeria (CBN). The liberal economic school would prefer that such funds reportedly in the region of N3.5trillion are better left in custody commercial banks thus ensuring commercial turn-over to stimulate the economy and mitigate the negative prevailing economic outlook.

However intelligently espoused this perspective is by its proponents, domiciling the TSA in the commercial banks has never helped the Nigeria’s economy, the reason being that our commercial banks rarely fund SMEs which are the real engine of the economy. SMEs cannot survive with lending rates above the 20% threshold.

My own suggestion is for government to either channel the mopped up funds to Bank of Agriculture or Bank of industry which are more accessible to SMEs and which can lend at 10% interest rate and below.

Our commercial banks are too far gone into capitalist banking module and leaving the TSA funds in their purview would do further incalculable damage to the economy in the long run.

Alternatively, the government can float a new commercial bank called TSA Bank with a mandate to fund SMEs at a single-digit interest rate. This will trigger the much-touted job creation and reduce unemployment to the barest minimum.

At the end of the exercise, the number of commercial banks may be scaled down to five solid banks with competitive global ratings. However locking the funds in CBN vault is the greatest disservice to economy already undergoing recession.
- BukolaAjisola,
bukymany@yahoo.com.
September 1, 2016
TSA and its many myths

Some 15 months after it kicked in, virtually every Nigerian you meet would seem to have a thing or two to say – I suspect more bad than good –about the operations of the Treasury Single Account (TSA) – the financial policy introduced by the federal government to consolidate all inflows from the country’s ministries, departments and agencies (MDAs). It’s like one might expect of a subject which Nigerians decide to take more than a passing interest: just about everyone would claim to know enough to qualify as an expert!

The other day, it was our Abuja lords suggesting that the Federal Government use the TSA to fund the budget amidst the liquidity crisis arising from the slump in global crude oil prices. I recall watching our vivacious finance minister Kemi Adeosunactually struggle to convince lawmakers in the federal parliament that the money in the TSA actually belong to different agencies of government who also had the right to access the funds, and sonot available to fund the budget!

In a country where,traditionally, top operatives of government agencies operate financial fiefdoms, answerable only to the man at the top and to a lesser still, the supervising minister, such confusions or gross misunderstanding, borne of the distorted fiscalism are perhaps expected. The only shock here is that these are no ordinary mortals but individuals who not only make our laws – including those governing the arcane world of public finance –persons who in law and practice are the custodian of the treasury; that they couldbetray such unpardonable ignorance of the basic element of public accounting and accountability no doubt speaks to a grave national tragedy.

Today, many are the tales woven around the operation of the piggy bank – which by the latest estimate is said to have hit N3.7 trillion – that the ordinary Nigerian cannot but wonder about the mystery account now called the TSA which no one dares to touch.

From the indulgent bank elite who, not contented with biting more than he can chew but would go as far as eating his seeds; the big shot in the parastatal who has lived all his life on arbitrage with all the powers that being in a big position confers. All of them can afford to chant the dirge. Trust the rest of us to follow with the tale about TSA being the next thing to Lucifer’s plague.

Time and time again, the question keeps popping up – why keep the nation’s funds in a TSA when there’s so much need for the funds? Why borrow to fund the budget when the executive could simply have turned to the TSA to get the job done? Or this – why maintain a single treasury account – an idle account at a time our banks – ever distressed –needs to stay afloat so they could lend to the productive sector?

It is a tricky questions no doubt, a legitimate one at that.

Let me attempt the last question this way. Nine banks are currently in trouble; right?

Their offence: Failure to return a total of $2.334 billion of Nigerian National Petroleum Corporation (NNPC)/Nigerian Liquefied Natural Gas (NLNG) Company dollar deposits to the TSA account as directed by the presidency last year; right?

First, that is whole lot of dollar holdings more so at this time. But then, that’s not the story. The real story is the huge outlay of public funds in foreign currency withheld by private entities at a time economic activities are slowly grinding to halt mainly on account of the forex crisis.In short, we are talking of something ordinarily beyond the pale of routine infraction to something as serious as economic sabotage.

Need the particulars? First, the fund keepers opted to keep the funds for whatever reasons – against the instruction of the fund owners even when the prerogative of fund owners to recall their funds at any time is ordinarily given. The second ‘crime’ is what actually happened to the cash. Now, don’t ask me what these entities did with the cash! Did they lend to the real sector? Where are the records? Did these funds end up – as many suspect – in the usual trove – the black marketwhere those pretenders in the corporate suites actually rule? Isn’t that precisely how the so-called black market derives their sustenance, the reason they won’t die?

More importantly, why bother to do real banking when there is such of government funds floating all over the place – funds that could easily be re-lent to the same government at premium?

Ha! And some people are talking of forbearance! Nigeria! Does anyone still wonder why some people are up in arms over the TSA?

Now let’s turn to our operatives in the public sector. Their cries, I guess, may not have reached the heavens yet. Never mind the appearances, the façade and all the works; it’s their season of grief. However, trust the artful fellows to outsource the dirty job to their buccaneer compatriots – the political class. Soon enough, we expect motions after motions to be tabled on how TSA has become the silent killer that the country can do without. By the way, is it mere coincidence that supposedly informed citizens have continued to moan that TSA is the reason why the activities of government have stalled; the reason why nothing is moving?

Time now to strip the masquerade.

What is TSA? Like I said before, it is the government account which merely seeks to consolidate all inflows from the MDAs through commercial banks into a single account at the apex bank –funds belonging to the federal government. Now, these are not income of the MDAs but rather of the federal government!

On the other hand, the agencies of government, by law are required to prepare their annual budgets alongside with that of the federal government and this to be submitted to the National Assembly!By the way, some of these agencies budgets are known to exceed those of several states of the federation.

This is where, I guess, the gross misunderstanding about the TSA comes in. I have checked the books; from the 1999 Constitution of the Federal Republic of Nigeria (As amended), to the Civil Service guidebook on spending – the General Orders and Financial Regulations; in none of the books did I find authorization for a dime of public money to be spent without the authorization of the parliament! To be sure, one of the more bizarre anomalies of our time is the assumption by revenue agencies of both the custodial role and the authority to do as they please with the funds in their charge.

Now, if we agree, I don’t think we should not, that these agencies are not autonomous agencies so to speak, but creations of our laws, why should it be difficult to accept that their day to day operations should be subject to the strictures of appropriation? What is more injurious to the nation – the TSA or a situation where top officials of government are allowed to play the Russian roulette with the funds belonging to the commonwealth?

I conclude. I agree that the operation of the TSA could be streamlined to deliver better results. WhatI will disagree with is that things are this bad because of the TSA. As against the TSA, our problem is the irresponsible elite that would rather reap without as much as bothering to sow.

August 30, 2016
TSA: Why SystemSpecs deserves a competitive service fee

As the clock slowly ticks towards September 15, 2016 when the Treasury Single Account (TSA) policy will mark one year, debates are increasingly dominating the public space. Government officials seem to be playing tag teams praising the policy for instilling a measure of discipline and accountability in the nation’s public sector.

Last Friday, Vice President Yemi Osibajo said the TSA had flushed out over 40,000 ghost workers from the Federal Ministries, Departments and Agencies (MDAs) since it was adopted last year. Before him, Minister of Information and Culture Lai Mohammed claimed the judicious management of the policy had helped advance the President Muhammadu Buhari administration’s fight against corruption and saved Nigeria from imminent collapse. The vaunted impact of the TSA was not lost on President Buhari, who disclosed that the policy had helped his administration take control of over N3 trillion of its cash assets as of the first quarter of 2016.

But other reactions are not this one-sided. Many others praise the policy for its nationalistic vision, but fault the government for adopting it at this time when Nigerians are struggling to make ends meet. Commercial banks fall into this category because they have an axe to grind. Over the years they had hinged their profits on ill-managed MDA deposits, leaving the government virtually cash-strapped and unable to execute developmental projects. So they argue that the policy is not in their best interests at this time. I beg to differ. It is not financially healthy for banks to depend on MDA funds, nor would we be wise to deposit our investments with financial institutions virtually hopping on one foot. Last Tuesday, Deposit Insurance Corporation (NDIC) helmsman Umaru Ibrahim said the TSA has signalled the end of armchair banking. He stressed that over three years ago, banks had been warned to diversify their sources of deposit mobilisation to avoid overly relying on public funds. So government can hardly be blamed for the mass layoffs experienced in the banking sector, or imposing sanctions for their failure to remit a total of $2.334 billion belonging to the Nigerian National Petroleum Corporation (NNPC) to the TSA.

What I take exception to is government’s sheer hypocrisy in the whole scheme of things. After all, he who comes to equity must come with clean hands. Policymakers have been in the news for praising the TSA over the past few months without giving due credit to SystemSpecs whose Remita software is responsible for its success. By turns, they have conveniently sidestepped the fact that government owes SystemSpecs its service charge dating back to March last year for providing this service. Is it not ironic that the same government is clamping down on commercial banks for not remitting NNPC funds to the TSA? And since commercial banks are entitled to 40% of SystemSpecs’ service charge, what moral justification does the government have to sanction them for the same offence it is guilty of?SystemSpecs is entitled to a 1% service charge for powering the TSA policy with its Remita software and has a valid contractual agreement with the government to this effect. The company is only entitled to 50% of this fee, while 40% and 10% are meant for commercial banks and the CBN respectively. This contravenes the argument that made headlines in the recent past that the service fee was bloated and meant for SystemSpecs alone.

Statistics show that companies abroad rendering the same service charge a much higher percentage than SystemSpecs. For instance, PayPal charges 2.75% for swiped card transactions, 3.5%+15cents for annually entered transactions and 2.9%+30cents for e-commerce integrations. Payfirma charges between 1.99% to 2.95 +25cents per transaction, Square 2.75% for swiped card transactions and Moneris between 2.65% and 2.85%. So without further argument, the President Buhari administration owes SystemSpecs a lot of credit for agreeing to a paltry 1% service charge, which in any case is to be shared with other stakeholders on the service chain.

SystemSpecs has been denied its due service charge for 16 months and counting. This does not only question the validity of contracts that private entities sign with the Federal Government, but also the negligible recognition we accord our homegrown companies for inventions that turn around our country’s fortunes for the better.

Recently, SystemSpecs Executive Director Deremi Atanda was on CNBC Africa’s mid-belt programme Power Lunch, where he argued that it was tough for SystemSpecs to continually render services to the government but remain unpaid indefinitely. “We have taken this challenge upon ourselves for the sake of other IT entrepreneurs. It’s not been easy going ahead without being paid for months. But we know that once this is sorted out, it charts the path for others coming into the market,” he said.

In all of this, I hope government’s inaction does not stifle the TSA just when it is beginning to make some impact. In my opinion, the policy is President Muhammadu Buhari’s single most important achievement. If it fails, observers say the economy would virtually grind to a halt and we would return to the era of “business as usual” in public spending. I sincerely hope this does not happen.

Oguma is a public affairs analyst

August 29, 2016
TSA: Expert seeks Fiscal Responsibility Act’s amendment

•’N8tr yearly from MDAs’ remittances feasible’

A renowned accountant, Omooba Olumuyiwa Sosanya, has urged the Federal Government to amend the Fiscal Responsibility Act, 2007 to accommodate the new Treasury Single Account (TSA) scheme, warning that any parastatal could take the government to court over the implementation of the scheme.

Sosanya, who lauded the initiative, said: “The Act is still there; it has not been amended. That Act must be amended to accommodate TSA.”

He said the country could realise a minimum of N8 trillion yearly from remittances from Ministries, Departments and Agencies (MDAs), if leakages are plugged for effective collection and prompt remittance to the Consolidated Revenue Fund.

Sosanya expressed regrets that over the years, the MDAs have been breaching Section 22 of the Fiscal Responsibility Act 2007 which allowed them to generate revenue and keep 20 per cent of it and pay the balance of 80 per cent into the Federation Account at the end of the year.

The Fiscal Responsibility Act 2007 made provisions for the return of 80 per cent of MDAs’ operating surplus to the treasury and the remaining 20 per cent to a General Reserve Fund.

The Act says in Section 22: “Notwithstanding the provisions of any written law governing the corporation, each corporation shall establish a general reserve fund and shall allocate thereto at the end of each financial year, one-fifth of its operating surplus for the year.

“The balance of the operating surplus shall be paid into the Consolidated Revenue Fund of the Federal Government not later than one month following the statutory deadline for publishing each corporation’s accounts.”

But Sosanya accused MDAs of being in violation of this provision. He said if the proposed amendments to the offending provisions of the law are adopted, Nigeria will realise a minimum of N8 trillion yearly from this sector of non-oil revenue generation.

He cited the Nigerian Ports Authority (NPA) for instance, which, according to investigation by the National Assembly, generated over N548 billion in five years, remitted a paltry N11 million into the Federation Account.

“Some of them (MDAs) even go to the Federal Government and say they don’t make money; they need money; they want subvention,” he said, describing as unfortunate recent discovery that over N3 trillion generated by MDAs was not remitted to the Federation Account.

He, however, expressed optimism that the advent of the Treasury Single Account (TSA) will eliminate wastages and fraud. “The TSA is a wonderful idea. It is a blessing to this country. It’s going to eliminate fraud entirely.

“Take the Nigerian Maritime Administration and Safety Agency (NIMASA), for instance, that collects dollars and then pay naira to the Federal Government. But, with the TSA, that money goes into the Central Bank account,” Sosanya said.

TSA is a public accounting system using a single account, or a set of linked accounts by government to ensure all revenue receipts and payments are done through a Consolidated Revenue Account (CRA) at the Central Bank of Nigeria (CBN).

The idea is to ensure adequate monitoring of government revenue receipts and expenditures and block leakages, as no MDA is allowed to keep any operational bank account. This will ultimately entrench a regime of accountability and transparency in public fund management.

But in implementing the TSA, Sosanya suggested that there must be a policy whereby each of the MDAs is allowed an operational budget quarterly. The arrangement, he said, will allow MDAs have certain amount that they budgeted and they cannot exceed within that quarter or period.

He said: “For the smooth running of the MDAs, there should be what we call operational budget quarterly, because right now some of them are complaining that they cannot do things because they don’t have money; they prefer the money into the commercial banks and they can draw it the way they want.”

Sosanya recommended that if this arrangement is implemented, a penalty should be introduced where if any of the parastatals pays money into commercial banks, those commercial banks that take that money will pay double of that money as penalty, while the accounting officers of those parastatals will be liable to 10 years imprisonment.

July 18, 2016
Govt realises N3tr from TSA, says SystemSpecs

• Banks reject deposits over operator’s unpaid fees

The Federal Government has saved N3 trillion in the Treasury Single Account (TSA), the firm handling it, SystemSpecs Limited, has said.

SystemSpecs Chief Executive Officer (CEO), John Obaro, who made this known last weekend, said the TSA has reduced debt servicing costs, liquidity reserves and enhanced the effective use of surplus cash.

He said his firm would continue to deliver on its terms of contract with the Central Bank of Nigeria (CBN), despite being owed its fees on e-collections since March, last year.

Some banks, he said, were rejecting the collection of deposits for the non-payment of the fees. “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 fueled by our belief in the enormous benefits the Remita software brings to the implementation of TSA for 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.”

He said in 2011, SystemSpecs signed a deal with the CBN to deploy its Remita software for the implementation of the TSA policy. The software, he said, can send and receive funds from all the 24 commercial banks, over 400 microfinance banks, and other payment channels, such as debit cards, mobile wallets and e-wallets.

“Remita is a wholly indigenous e-payment and e-collection software that harmonises inflows, remittances and expenditure for enhanced transparency and increased efficiency. The software has enabled government recoup over N3 trillion from accounts of MDAs, and instilled much needed fiscal discipline that allows the Ministry of Finance to have effective control over budget allocations,” he said.

Obaro said last October, the CBN directed SystemSpecs to return the earned fees on e-collections into TSA from last March, due to the spike created by the Presidential directive for all MDAs to comply with the TSA policy, which led to a huge influx of funds through the Remita/TSA platform.

He explained that though the global rate of commission on e-transactions varies from 1.5 per cent to 3.5 per cent, the three parties involved in the TSA project: commercial banks, the CBN and SystemSpecs agreed to a one per cent commission for the TSA e-collection, which will be shared 40 per cent, 10 per cent and 50 per cent.

Continuing, he said: “We are encouraged by the support from Nigerians, home and abroad, who take pride in the knowledge that, for the first time in our history, an indigenous company is responsible for the development of a payment software that seamlessly powers a sensitive national policy such as the TSA”.

He urged the Federal Government to end the negotiations on its payment, adding that the continued withholding of government’s earning is putting a burden on its operations.

June 29, 2016
Lagos saves N5.9 billion in TSA

The Lagos State government has so far saved N5.990 billion using the Treasury Single Account (TSA), the Commissioner for Finance, Dr. Mustapha Akinkunmi, has said.

Akinkunmi spoke with reporters at the ongoing Ministerial briefing in Alausa yesterday. He said the implementation of the TSA had helped to enhance transparency and efficiency, besides boosting Internally Generated Revenue (IGR) through seamless generation, collection and improved cash management.

He said: “The present administration has successfully re-engineered the state’s outstanding internal loans to reduce burden on IGR and technically saved N3.8 billion per month.

“This was achieved by re-negotiating interest rates from an average of 18 per cent monthly (N5.35 billion monthly payment) to 12.5 per cent (N1.52 billion monthly payment). The state restructured its outstanding bonds from bullet payment to amortising payment to reduce debt service resulting in huge savings recorded from this initiative.

“Through this, we have also achieved savings of over N500 million in monthly contributions to Consolidated Debt Service Account (CDSA) and over N40 billion saved in interest payments over the lifetime of the instruments.”

Akinkunmi, said the state won virtually unanimous approval for the restructuring at the Bondholders’ Extraordinary General Meeting, reflecting the strong relationship between the state and the capital market. He added that such feat affirmed confidence in the strength of the state’s credit worthiness.

“In fact, the International Credit Rating Agency, Fitch Ratings, released a report in March 2016. To quote the report, Fitch’s affirmation reflects its expectations of “strong operating performance in the medium term, outstanding sophistication and transparency management compared to local standards, as well as satisfactory debt metrics.

“The state continues to make progress in financial management, on the back of progressive policy implementation.”

In spite of competing sectors for the limited funds, he said the Governor Akinwunmi Ambode led government has ensured prompt payment of all employees’ salaries on or before 23rd day of every month with the payment of September, 2015 salary on the 17th of the month before the Sallah break and also the payment of March salary on the 22nd before the Easter holiday.

“The state government facilitated the opening of the N6.25billion Lagos State Employment Trust Fund Account which will allow youths and unemployed citizens have access to adequate finance for entrepreneurial ventures in line with the initiative and campaign promises of Governor Ambode,” he said.

May 12, 2016
TSA and varsity research

•Govt should tweak TSA to achieve flexibility without sacrificing accountability

From the Academic Staff Union of Universities (ASUU) has come a loud rumble against the Treasury Single Account (TSA), saying the prime instrument, on which the Buhari Presidency is hinging its transparency, might just be hampering research.

Dr. Alex Odiyi, the ASUU Akure zonal coordinator, mentioned two universities where TSA has slowed down the drawing of research funds. “At the University of Agriculture, Abeokuta (UNAAB), funds administered by the university for certain programmes spanning five African countries are trapped. The situation is the same at University of Lagos,” he said. “At this time,” he warned rather dramatically, “Nigerian universities and researchers may be blacklisted and denied access to international grants.”

Finance minister, Mrs Kemi Adeosun, speaking on Channels TV’s Sunrise, admitted that much, when she said the Federal Government was mulling over either exempting some university accounts from TSA; or making the Central Bank of Nigeria (CBN) pay interest on some varsity “foundation accounts”, used to fund research.

The minister revealed some university authorities (not ASUU) had lodged a similar complaint; and that the government was looking into modalities to come to some mutually acceptable accommodation to all parties.

That is good news. But the government must expedite the process. In doing so, however, it should consult wide with the critical stakeholders, so that, at the end of the day, every party would buy into the agreed compromise. That should foster industrial peace in the education sector.

Again, the bit on research is key. If Nigerian universities are not competing with the rest of the world for now, it is simply because they are not doing enough research — a core function of the academia the world over; and the theoretical blueprint of knowledge-led societal development.

That there is hardly enough funds for research is bad enough. But that even the scarce grants available are trapped by TSA should be discouraged and discountenanced. It is good the government is seriously engaging this problem. But again, promptness is key.

Still, nothing should be construed as pushing to take the universities from the TSA framework. That approach would be defeatist.

The reason is simple. TSA became necessary, in the first instance, because of crippling corruption in the system. Nigerian universities are not exempt from that system. Instead, they are an integral part of it.

Corruption has crippled university operations over the years, including the administration of research grants. For the sake of accountability, therefore, TSA would benefit the university system, as much as it would benefit the rest of the economy. With more structural transparency, research funds would be more secure in the long run; and the universities — and the country — would be the better for it.

That is why the Nigerian university community must take a holistic view of the present corruption challenge, and buy into being part of the vanguard for solution.

That would be smart and strategic thinking — after all, universities are derelict today, simply because of past abuses. So, if the universities today vote, to fix the porous system, they would only be building better and sounder future Nigerian universities.

That is the logical way to look at the TSA challenge; not to, because of an initial glitch, hurriedly call for exemption. Any trade group, claiming some especial damage as ASUU now does, can do that.

But that would be running away from the problem — and running away does not get a problem solved.

May 9, 2016