In a recent development, the Minister of Finance and Coordinating Minister of the Economy has issued a circular dated December 28th, 2023, introducing fresh directives for the implementation of Nigeria’s Treasury Single Account (TSA). Contrary to some misleading reports suggesting a shutdown, the TSA, recognized as Africa’s largest and most successful initiative, remains intact.
The TSA, initially introduced in 2012 by the Goodluck Jonathan administration and fully implemented by the Muhammadu Buhari Administration in 2015, mandates all Federal Ministries, Departments, and Agencies (MDAs) to manage funds exclusively from the Consolidated Revenue Fund (CRF) maintained at the Central Bank. This centralised bank account structure has saved the government over N10 trillion, according to the Bureau of Public Service Reforms.
The recent circular emphasises a review of a specific component of the TSA, clarifying that there is no alteration to the core structure. The adjustment focuses on how MDAs manage their sub-accounts within the Central Bank, ensuring a more streamlined and transparent process for revenue collection, utilisation, and remittances.
Under the new guidelines, MDAs will no longer self-manage TSA sub-accounts, and instead, they will receive automatic deposits into sub-recurrent accounts. The balance will be remitted directly into the CRF, preventing inadvertent access and tampering with funds. The specifics vary based on the funding status of each MDA:
Fully Funded MDAs: One hundred per cent (100%) of their Internally Generated Revenue (IGR) will be remitted to the Sub-Recurrent Account.
Partially Funded MDAs: Fifty per cent (50%) of gross IGR, along with all statutory revenue, will be remitted to the Sub-Recurrent Account.
Self-Funded MDAs: Fifty per cent (50%) of gross IGR, including all statutory revenue lines, will be remitted.
This move aims to enhance revenue generation, fiscal discipline, accountability, and transparency in government financial resource management.
The implementation of Nigeria’s TSA serves as a prime example of leveraging Digital Public Infrastructure for the digital transformation of public sector service delivery. By maintaining the TSA initiative, Nigeria continues to lead in digital transformation efforts, fostering economic growth and technical competency within the country.
In conclusion, the evolution of the TSA under various administrations, including the current Tinubu administration, underscores its pivotal role in Nigeria’s public financial management journey. The initiative promotes financial visibility, reduces costs, facilitates timely fund remittance, and streamlines public service operations.
–Culled from a report by Collins Nweze, Assistant Business Editor at The Nation