Treasury single account

Treasury Single Account (TSA) is a financial policy in use in several countries all over the world. It was introduced by the federal government of Nigeria in 2012 to consolidate all inflows from all agencies of government into a single account at the Central Bank of Nigeria.

Efficient management and control of government's cash resources rely on government banking arrangements. Nigeria, like many low income countries, employed fragmented systems in handling government receipts and payments. Establishing a unified structure as recommended by the IMF, where all government funds are collected in one account would reduce borrowing costs, extend credit and improve government's fiscal policy among other benefits to government. The IMF also recommends the establishment of a legal basis to ensure its robustness and stability. The introduction of the Treasury Single Account policy therefore was vital in reducing the proliferation of bank accounts operated by ministries, departments and agencies (MDAs) towards promoting financial accountability among governmental organs. The compliance of the policy in Nigeria created challenges for majority of the MDAs. Commercial banks in Nigeria remitted over 2 trillion Naira worth of idle and active governments deposits with full implementation of this policy in 2016. Meanwhile, the bankers committee of the country has declared their support for the policy.

The operation of the Treasury Single Account in Nigeria has not been without controversies. On Tuesday, 10 November 2015, Dino Melaye, a Nigerian senator representing Kogi West, raised a motion that the operation of the treasury single account (TSA) be investigated for possible corruption. He claimed that "the appointment of REMITA, an e-collection agent, is a gross violation of section 162 (1) of the Nigerian Constitution and the banks and other Financial Institutions Act." He claimed the constitution only recognised a banking institution to be the collector of government funds, that Remita was not a bank. The provision of the Constitution cited by Melaye states, “the federation shall maintain a special account to be called the federation account into which all revenues collected by the government of the federation except the proceeds from the personal income tax of the personnel of the Armed Forces of the Federation, the Nigeria Police Force, the ministry or department of government charged with foreign affairs and the residents of the FCT, Abuja.” According to Melaye, the total inflow of 1% commission charged and received by SystemSpecs for all revenue collected on behalf of the government from the various ministries, departments and agencies to be 25 billion Naira as of November, 2015 was fraud and must be returned to the account of the Central Bank of Nigeria. The senate consequently ordered its committee on finance and public accounts to "commence an investigation into the use of Remita (which it erroneously described as an e-collection agent) since the inception of the TSA policy.

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