The Minister of Finance, Mrs. Kemi Adeosun today, stated the recoveries accrued overtime through the Treasury Single Account (TSA) may reduce amount to be borrowed for the 2016 appropriation bill.
She made the disclosure at the TSA workshop organized for States Accountants-General held at the OAGF conference hall in Abuja.
Speaking on the level of at which the initiative has paid off since it was effected by the President Muhammadu Buhari led administration, the minister stated the TSA has reduced the federal government Ways and Means requirement to bridge the budget funding gap.
As stated by her, it has provided complete and timely information on government cash resources, Improved operational control on budget execution, Enabled efficient cash management, Reduced bank fees and transaction costs, Facilitated efficient payment mechanisms.
The minister who was of the view that the workshop on the TSA concept, design, benefits is to share experiences of the Federal and States Government in the implementation of the project stressed that it is expected to dwell further on current issues and challenges surrounding Cash Flow Management with a view to ensure scarce resources at the disposal of Federal, State and Local Governments are prudently and efficiently managed.
She, however, commended the organizers of the workshop saying such move is apt and timely especially at a time when the global economic downturn is creating challenges that demand efficient and effective management of cash resources.
Adeosun in the course of the event also noted that ‘the global economic challenges which are affecting our nation demand optimum efficiency in the management of public funds.’
As stated by the finance minister, these objectives require an overhaul of the financial management approaches adopted to meet financial obligations on time and ensure that cost effective financial support is provided to public institutions.
"Much has been reported and debated about the merits of TSA and the impact on the ficiautonomy of the various arms of government and on the profitability of commercial banks. In practice, TSA is an essential reform for any government wishing to pursue fiscal sustainability and prudent management of its resources," she stated adding that it increases accountability and transparency, improves the processing of payments and collections and reduces borrowing costs,
She equally outlined some of the key benefits of TSA the federal government has recorded to date which stated thus:
- TSA at Federal Level has allowed, for the first time, visibility of the total quantity of government funds at any point in time.
- The balance, which changes daily as MDA’s remit revenues and make payments, according to the latest reports from CBN exceeds N2.2 Trillion. I can report that work is now ongoing within The Treasury, to determine how much of these funds can potentially be utilised to part fund the 2016 budget and how much relates to pending commitments. This, of course, will reduce the amount to be borrowed
- The TSA has provided us with financial information on the revenues of agencies funded by government and has reduced revenue suppression. This information is being used to drive our programme to enforce compliance with the Fiscal Responsibility Act and ensure that Revenue Generating Agencies generate expected surpluses and remit to the Federal Purse.
- TSA has eliminated opportunities for brokerage and other corrupt practices that previously encouraged agencies to accumulate funds with commercial banks rather than apply them to their intended uses. We believe that this will reduce payment delays to contractors, minimise late payment penalties and will consequently improve project completion times and service delivery.
- TSA has corrected the practice of government borrowing short term funds at high rates of interest, whilst simultaneously having idle funds in various bank accounts.
- By reducing the number of accounts in operation, monitoring and control has significantly improved.
Having pointed them out, she urged the participants of the workshop to also discuss and brainstorm on ways and means of improving the revenue base of the country through full implementation of TSA and blocking of all leakages and improving the efficiency of revenue administration.
"The revenue base of the Country is still low and its administration still leaves room for improvement. This is bedevilled with a range of problems such as poor computerization, lack of skilled and dedicated employees, corruption, lack of awareness and of course unpatriotic conduct by some of the operators. This clearly indicates that the underlying assumptions underpinning the 2016 budget may only be realised with serious efforts put in place towards revenue efficiencies and expenditure discipline such as implementation of the TSA and Cash Management concepts by all tiers of government," she disclosed.
"Therefore, I commend the efforts of the OAGF and organisers for hosting this very important workshop aimed at sensitizing the States Accountants-General on the need to key into the Treasury Single Account scheme of the Federal Government. I also wish to thank IMF (FAD Mission) for partnering with Federation Account Allocation Committee (FAAC) in this noble initiative. I may also emphasis that timing of this workshop cannot be more auspicious than now when the present Administration of His Excellency, Muhammadu Buhari, GCFR the President of the Federal Republic of Nigeria is vigorously pursuing the war against corruption.
"As professionals in charge of Public Financial Management of your respective states, the ball is in your court and l hope you will take advantage of this workshop to clarify issues that have agitated your minds regarding the implementation of TSA. TSA will no doubt enables you to block all financial leakages and conserve more funds needed fordevelopment in your various States.
"I am also aware that some states are already implementing TSA. I urge those states to kindly share their experiences with the rest of you so as to encourage those who are yet to decide to take their first step in this direction."