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Treasury Single Account (TSA) is a financial policy in use in several countries all over the world. It was proposed by the federal government of
Nigeria Nigeria ( ), , ig, Naìjíríyà, yo, Nàìjíríà, pcm, Naijá , ff, Naajeeriya, kcg, Naijeriya officially the Federal Republic of Nigeria, is a country in West Africa. It is situated between the Sahel to the north and the Gulf of G ...
in 2012 under the Jonathan Administration and was fully implemented by the
Buhari Administration Muhammadu Buhari, was inaugurated as the President of Nigeria on May 29, 2015, succeeding Goodluck Jonathan. Buhari, the All Progressives Congress nominee, was a former military head-of-state, and general in the Nigerian Army. His running mate, is ...
. to consolidate all inflows from all agencies of government into a single account at the
Central Bank of Nigeria The Central Bank of Nigeria (CBN) is the central bank and apex monetary authority of Nigeria established by the CBN Act of 1958 and commenced operations on 1 July 1959. The major regulatory objectives of the bank as stated in the CBN Act are t ...
.


Background

Efficient management and control of government's cash resources rely on government banking arrangements. Nigeria, like many middle income countries, employed fragmented systems in handling government receipts and payments. Establishing a unified structure as recommended by the
IMF The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster gl ...
, 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 the majority of the MDAs. Commercial banks in Nigeria remitted over 2 trillion
Naira The naira (currency sign, sign: ₦; ISO 4217, code: NGN) is the currency of Nigeria. One naira is divided into 100 ''kobo''. The Central Bank of Nigeria (CBN) is the sole issuer of legal tender money throughout the Federal Republic of Nigeria ...
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. Throug
Remita
the integrated electronic payments and collections platform developed by a company calle
SystemSpecs
, the TSA initiative has enabled the Federal Government of Nigeria to take full control of over 3 trillion Naira ($15 billion) of its cash assets as at the end of the first quarter of 2016.


Reactions to the introduction of Treasury Single Account

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 Kogi State is a state in the North Central region of Nigeria, bordered to the west by the states of Ekiti and Kwara, to the north by the Federal Capital Territory, to the northeast by Nasarawa State, to the northwest by Niger State, to th ...
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 SystemSpecs is based in Lagos, Nigeria. History SystemSpecs was founded in 1991 by John Obaro. It was then more like a business to business company selling software to organisations. SystemSpecs started as a 5-man partner agent and Value added r ...
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.
Ayo Fayose Peter Ayodele Fayose (born 15 November 1960) is a Nigerian politician and the former Governor of Ekiti State. Early life Fayose grew up in Oyo State where he attended Olivet Baptist High School, Oyo. In 1985, He was admitted to a Higher Na ...
, Governor of
Ekiti State Ekiti State ( yo, Ìpínlẹ̀ Èkìtì) is a state in southwestern Nigeria, bordered to the north by Kwara State, to the northeast by Kogi State, to the south and southeast by Ondo State, and to the west by Osun State. Named for the Ekiti ...
, introduced a political angle to the controversy when he alleged that the funds collected through of TSA were used to finance governorship elections in
Bayelsa Bayelsa is one of the states in the South-South region of Nigeria, located in the core of the Niger Delta region. Bayelsa State was created in 1996 and was carved out from Rivers State, making it one of the newest states in the federation. Yenag ...
and
Kogi Kogi State is a state in the North Central region of Nigeria, bordered to the west by the states of Ekiti and Kwara, to the north by the Federal Capital Territory, to the northeast by Nasarawa State, to the northwest by Niger State, to th ...
States by the
All Progressives Congress The All Progressives Congress (APC) is one of the two major contemporary political parties in Nigeria, along with the Peoples Democratic Party (PDP). Founded on 6 February 2013 from a merger of Nigeria's three largest opposition parties, t ...
, apart from enriching "a single company in one month." 25 billion Naira is the negotiated commission of one per cent of 2.5 trillion Naira - total amount of monies collected by Remita for the Federal Government of Nigeria. However, the Federal Government of Nigeria through the office of The Minister of Information and Culture
Lai Mohammed Layiwola "Lai" Mohammed (born 6 December 1951) is a Nigerian lawyer and politician. He is currently the Minister of Information and Culture, a position he has held since November 2015. He is also the former National publicity secretary of the ...
debunked the opinion that the TSA policy was not intended to loot the Nigeria treasury. The minister in his statement attempted to absolve the administration of President
Muhammadu Buhari Muhammadu Buhari (born 17 December 1942) is a Nigerian politician and current president of Nigeria since 2015. Buhari is a retired Nigerian Army major general who served as the country's military head of state from 31 December 1983 to 27 A ...
when he claimed that the TSA contract was signed during the administration of President
Goodluck Jonathan Goodluck Ebele Azikiwe Jonathan (born 20 November 1957)Lawson Heyford, ''The Source'' (Lagos), 11 December 2006. is a Nigerian politician who served as the President of Nigeria from 2010 to 2015. He lost the 2015 presidential election to f ...
The CBN in an attempt to justify their position released a letter to the press titled “Commencement of Federal Government independent revenue collection under the Treasury Single Account (TSA) initiative”. In the letter, the CBN debunked all the allegations made by Melaye as being misleading. At the height of the controversy, the
Central Bank of Nigeria The Central Bank of Nigeria (CBN) is the central bank and apex monetary authority of Nigeria established by the CBN Act of 1958 and commenced operations on 1 July 1959. The major regulatory objectives of the bank as stated in the CBN Act are t ...
(CBN), instructed SystemSpecs to return of all the revenues made so far on the contract, a directive, which SystemSpecs obeyed without delay as a "business decision". In a letter reportedly written to President Muhammadu Buhari by
John Obaro John Tanimola Obaro is a Nigerian technology entrepreneur, public speaker, and founder of SystemSpecs Nigeria Limited. Early life and education John Obaro is from Kogi State. He is of the Okun tribe in Nigeria, and was born April 19, 1958. He ha ...
, Founder and Managing Director of
SystemSpecs SystemSpecs is based in Lagos, Nigeria. History SystemSpecs was founded in 1991 by John Obaro. It was then more like a business to business company selling software to organisations. SystemSpecs started as a 5-man partner agent and Value added r ...
, developers of the Remita application, the allegation that SystemSpecs pocketed 25 billion Naira was refuted. Obaro explained that the one per cent commission was negotiated prior to the signing of the contract; and the one per cent commission was shared by SystemSpecs, participating commercial banks and the Central Bank of Nigeria in the ratio of 50:40:10 respectively. According to findings b
PremiumTimes
'Remita' is not "an agency" but an application/software for executing payment instructions and collection of government revenue. The software facilitates the payment of government revenue from financial institutions to a TSA in the CBN. The report cited holes in Melaye's accusations and termed them "misleading." The Joint Senate investigative committee absolved
SystemSpecs SystemSpecs is based in Lagos, Nigeria. History SystemSpecs was founded in 1991 by John Obaro. It was then more like a business to business company selling software to organisations. SystemSpecs started as a 5-man partner agent and Value added r ...
of any wrongdoing, as “the committee could not ascertain the deduction/collection of twenty-five billion Naira (N25 billion) by SystemSpecs as 1% fee charged for the use of its Remita platform within the period under investigation.” This was contained in section 6.1.16 on pages 16 and 17 of the committee’s report.


References


General references

*{{cite web, url=http://www.ngrguardiannews.com/2015/08/treasury-single-account-giving-life-to-jonathans-dead-policy-directives/, title=TREASURY SINGLE ACCOUNT: Giving Life To Jonathan's 'Dead' Policy Directives, author=nigeria guardian news, accessdate=19 October 2015 Banking in Nigeria Presidency of Muhammadu Buhari