The Impact Of Treasury Single Account (tsa) On Commercial Bank In Nigeria

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The Treasury Single Account policy was established in order to reduce the proliferation of bank accounts operated by MDAs and to promote financial accountability among governmental organs. The compliance of the policy faces challenges from majority of the MDAs. The commercial banks in the countries have lost over 2 trillion Naira worth of deposit with full implementation of this policy. Meanwhile, the bankers committee of the country has declared their support for the policy.

President of Nigeria, Muhammad Buhari’s directive to all federal Ministries, Departments and Agencies (MDAs) to start paying all government revenues, incomes and other receipts into a unified pool of single account with the Central Bank of Nigeria (CBN), is a bold and highly commendable move directed at one of the bastions of corruption in the polity, namely, public institutions.

Apparently, a master stroke against a tactless financial strategy emanating from an unholy alliance between banks and MDAs, the current implementation of this unified accounting structure, rightly called the Treasury Single Account (TSA), is laden with high expectations of economic prospects owing to its possibility of ensuring transparency and accountability.

The TSA is a unified structure of government bank accounts enabling consolidation and optimal utilisation of government cash resources. Through this bank account or set of linked bank accounts, the government transacts all its receipts and payments and gets a consolidated view of its cash position at any given time.

The former Accountant-General of the Federation (A.G.F), Jonah Otunla, also backed the implementation of TSA stressing that it would bring about transparency, efficiently and accountability. This is because TSA is bound to improve transparency and accountability in public finance management. First, it will remove that organisational secrecy around the management of public finances. The discretionary aspect of accounting officers and politicians collaborating to do all manner of business with government finances before executing projects thereby causing delays or negotiating interest rates with banks for private gains will be over. The second is that revenue generating agencies that have been depriving the Treasury of due revenue through a plethora of bank accounts under their purview and which is not known to the authorities will no longer be able to defraud the revenue since all funds will be swept into the TSA. Thus, beyond transparency and accountability, the TSA will introduce 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. (Okechukwu, Chukwurah , Daniel, &Iheanacho, 2015).

According to the former A.G.F prior to TSA, Nigeria had fragmented banking arrangements for revenue and payment transactions. He stated that, “There were more than 10,000 bank accounts in multiple banks, which made it impossible to establish government consolidated cash position at any point in time. It led to pockets of idle cash balances held in MDAs’ accounts when government was out borrowing money.” (Obinna,2015:52).

The idea of treasury single account came into being when some agencies refused to declare and remit the 25 percent of their annual revenue they generated to the treasury as demanded by law.In 2012 about N120 billion was forcefully collected by government from MDAs being 25 percent of their gross revenue to the treasury with another N34 billion collected in 2013. Before then, most of the MDAs were reluctant to remit the requested amounts by law to the treasury. (Daily Trust Editorial,2015:16)

Treasury Single Account is a public accounting system under which all government revenue, receipts and income are collected into one single account, usually maintained by the country’s Central Bank and all payments done through this account as well. The purpose is primarily to ensure accountability of government revenue, enhance transparency and avoid misapplication of public funds. The maintenance of a Treasury Single Account will help to ensure proper cash management by eliminating idle funds usually left with different commercial banks and in a way to enhance reconciliation of revenue e collection and payment (Adeolu, 2015).

The Revenue Mobilization and Fiscal Commission released an audit report which indicted some banks for withholding about N12billion revenue collected on behalf of the Nigerian Customs Service and Federal Inland Revenue Service. The revenue according to the commission is stashed in 19 banks from January 2008 to June 2012. The chairman, Non- Oil Committee of the Commission, Rev AjibolaFagboyegun demanded for urgent return of the funds by the banks to avoid sanctions. (Hamisu, 2015).

It is important to note that the TSA issue did not start with Buhari administration. Former President Goodluck Jonathan initiated the policy last year. But he could not implement it before he left office on May 29 this year.

The implementation deadline by Jonathan was fixed for February 28, 2015. But the said deadline was ignored by the MDAs and no sanction was meted out to them. Some said that Jonathan lacked the gumption to enforce the implementation of TSA because the hands of his administration were not clean enough. Others argued that the former president could not resist the pressure to drop the idea from bank executives and top business magnates in the country who were playing major roles in the sponsorship of his re-election bid. (Jegede,2015).

Though, the government is yet to unveil its economic agenda, leading institutions are keying to the administration’s resolve to move the country forward. In fact, it was the Economic and Financial Crimes Commission (EFCC), which spearheaded the flurry of actions, then followed by Ministries, Departments and Agencies (MDAs), and now, the Treasury Single Account (TSA) policy compliance introduced last year to block revenue generation leakages by former President Goodluck Jonathan, which was not effected even after a deadline was set for MDAs for February this year. (Okwe,2015).

Suddenly, these MDAs following President Buhari’s comment at a function on plans to block revenue leakages by revenue generating agencies on their own without another enabling government circular promptly complied and moved their several revenue accounts maintained in banks to the Central Bank of Nigeria (CBN), including offshore accounts maintained by them, which has boosted Nigeria’s foreign reserves.

The TSA policy directive is not the only Jonathan’s ‘dead’ policy that President Buhari has revived by not making any addition, change, circular or by rolling out enforcement, but just by mere pronouncement at a public function. Others include, the Integrated Personnel and Payroll Information System in the public (IPPIS), introduced to block ghost workers syndrome, but was resisted by some MDAs and the harmonisation of the country’s various data banks hosted by different government agencies such as, the CBN; National Population Commission, INEC, Customs, Immigration Service and others. (Guardian Editorial,2015:14)

Federal establishments affected by this directive include all fully funded organs of government, ministries, departments and agencies (MDAs), foreign missions and partially funded government establishments like teaching hospitals, medical centres and tertiary institutions. Others include the Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), Corporate Affairs Commission (CAC), Nigerian Ports Authority (NPA), Nigerian Communication Commission (NCC), Federal Airports Authority of Nigeria (FAAN), Nigerian Civil Aviation Authority (NCAA), Nigerian Maritime Administration and Safety Agency (NIMASA). The list of affected organs also has National Deposit Insurance Corporation (NDIC), National Shippers’ Council (NSC), Nigerian National Petroleum Corporation (NNPC), Federal Inland Revenue Service (FIRS), Nigeria CustomsContrary to views celebrating the TSA as a creation of Buhari’s administration, this principle of publicaccounting system and revenue management has been both a constitutional provision and an extant fiscalpractice. Section 80 of the 1999 Constitution, which gives legal backing to the TSA reads: “All revenues or othermoneys raised or received by the Federation (not being revenues or other moneys payable under thisConstitution or any Act of the National Assembly into any other public fund of the Federation established for aspecific purpose) shall be paid into and form one Consolidated Revenue Fund of the Federation”. Other subsectionsof that provision explain restrictions regarding the withdrawal of money from this ConsolidatedRevenue Fund. (CBN.2015).

Concerning its practice, as far back as the government of former President OlusegunObasanjo, the need for aconsolidated Federation Account was what informed the establishment of the Government Integrated FinancialManagement Information System (GIFMIS). However, it was President Goodluck Jonathan who piloted the TSAin its present form, when he commenced implementation with about 42 public institutions comprising ministries,departments and agencies, until recently when President Buhari began full implementation.In the common sense appreciation of Buhari’s anti-corruption roadmap, the proper implementation of the TSAwould remove the ambient secrecy in the management of public finance in MDAs. Under the guise of non-descript official secrecy, government staff and politicians have been known to employ all sorts of administrativedevices and illegal liaisons to engage in business ventures for private gains using government money, andthereby frustrating proper execution of projects, as well as causing salary delays.

Furthermore, it was common practice for agencies saddled with revenue generation to defraud government bysiphoning public funds through all sorts of bank accounts in their custody and unknown to the authorities. Withall government revenues and receipts being pooled into the TSA, not only would it be difficult for thismonumental fraud to continue without serious sanctions, but also it would afford government a quick glance atthe daily funds pooled into the TSA by revenue generation agencies. TSA also has the advantage of blockingcapital flight and other leakages that would ensue from the pockets of unauthorised foreign accounts; andthereby retain more revenue for the system.

In practical terms, as one informed commentator surmised: “There is palpable optimism that with diligent implementation, the TSA will enhance transparency and accountability in the management of public funds.

Furthermore, the practice should expectedly capture additional revenue to effectively fund more capital projectsthat will lift the social welfare of Nigerians.”

As laudable as the directive on TSA suggests, it is fraught with challenges which this administration may want toaddress for it to serve its purpose. In an economy notorious for late passage of budgets, a TSA regime mayhamper disbursement for capital projects and operational projections of MDAs, unless as some argue, a certainpercentage of government receipts are retained for smooth operations by these MDAs. (VanguardEditorial,2015:16)

For foreign exchange generating organs like the NNPC, whose transactions are often denominated in dollar, theTSA regime may be said to likely affect optimal business operations. Banks that sit idly waiting for governmentfunds to fall on their laps rather than seek out and manage depositors’ funds for economic growth and theirprofitability would need to re-strategies.


The directive by the President that all revenues due to the Federal Government or any of its agencies must be paid into the Treasury Single Account (TSA) or designated accounts maintained and operated in the Central Bank of Nigeria (CBN) has been described bymany as a welcome development. It is seen as one of the very good measures adopted by the current administration in its fight against corruption. Corruption is a cankerworm that has eaten deep into the fabrics of our system and kept us in a terribly precarious situation that made our great country, Nigeria, to look poor, despite the huge human and natural resources we are divinely blessed with.

According to EzeOnyekpere, the Lead Director of Centre for Social Justice, a civil society group based inAbuja, “The TSA is a process and tool for effective management of government’s finances, banking and cash position. In accordance with the name, it pools and unifies all government accounts through a single treasury account. The advantages and benefits of the TSA are legion. The consolidation into a TSA paves way for the timely capture and payment of all due revenues into government coffers without the intermediation of multiple banking arrangements.” (Vanguard Editorial ,2015).



The primary objective of a TSA is to ensure effective aggregate control over government cash balances. Theconsolidation of cash resources through a TSA aggregate control of cash is also a key element in monetary and budget management. There are other objectives for setting up a TSA. They include: minimizing transaction costsduring budget execution, notably by controlling the delay in the remittance of government revenues (both tax andnontax) by collecting banks, and making rapid payments of government expenses; facilitating reconciliationbetween banking and accounting data; efficient control and monitoring of funds allocated to various governmentagencies; and facilitating better coordination with the monetary policy implementation. Lastly, the specificobjectives are as follows:

  1. To provide greater transparency in the Public Financial Management (PFM);
  2. To increase fiscal savings (less transaction charges, more revenues);
  3. To determine the extent to which TSA can block financial leakages, promote transparency and accountability in public financial management.


1.       What are the implications of treasury single account on the banking sector in Nigeria? 

2.       What are the implications of treasury single account on the economic development in Nigeria?

3.       What are the benefit of treasury single account?

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The Impact Of Treasury Single Account (tsa) On Commercial Bank In Nigeria