Ministries, Departments and Agencies (MDAs) are conniving with some commercial banks to stall the implementation of the Treasury Single Account (TSA) that would ensure that all receipts by MDAs, estimated at over N3trillion, are made directly to the Consolidated Revenue Fund at the Central Bank of Nigeria (CBN) through an electronic channel known as e—Collection, BusinessDay investigations have shown.

The essence of the TSA is to instil transparency in governance, as government intends to block all leakages as part of measures to shore up the revenue shortfall caused by declining oil prices.

But informed sources told BusinessDay that some top government officials in parastatals with heavy cash flow, consider that the recommended direct payment to government coffers are not in their interest, since they turn illicit profits by keeping the funds with the banks at zero interest and borrowing same at higher interest rate.

They revealed that the fear of loss of ‘patronage’ by government contractors, access to independent revenue collections made on behalf of government and loss of control over cash allocations, among others, are the causes of resistance to the implementation of the TSA by the MDAs.

Some of the benefits of the initiative include plugging loopholes in the Federal Government revenue collection system; enthroning a new regime of transparency and accountability in Internally Generated Revenue (IGR) management; as well as improving availability of funds for poverty eradication programmes and infrastructure.

It is also meant to streamline and automate the independent revenue collections of MDAs, using the government integrated financial management information system [GIFMIS] and the CBN Remittance e-payment platform developed by Systems Specs Nigeria limited.

Ngozi Okojo-Iwaela, finance minister and co-ordinating minister of economy, said at the weekend, at the 2015 spring meetings of the International Monetary Fund and World Bank, in the United States of America, that a few institutions have been built but admitted that more needs to be done in the area of single treasury account.

“We have built quite a few institutions and put processes in place…financial mechanism management institutions and processes have been put in place to make managing the finances of the country robust, stronger and more transparent and we need to complete the work on implementation of the GIFMIS, TSA and IPPIS,” she explained at the conference.

President Jonathan had in 2013 said, “we shall complete the deployment of the three electronic platforms of Treasury Single Account (TSA), the Government Integrated Financial Management Information System (GIFMIS) and the Integrated Payroll and Personnel Information System (IPPIS) which are geared towards improving efficiency and transparency in our public finances in 2014. Through these reforms, we saved about N126 billion in leaked funds and intend to save more.”

But this laudable initiative formulated by Ngozi Okonjo-Iweala, finance minister and coordinating minister of the economy, with last February as final deadline, and championed by the Office of the Accountant-General of the Federation (OAGF) in collaboration with the CBN, is yet to be implemented by particularly the high revenue earning and juicy MDAs.

Some analysts told BusinessDay, yesterday, that the trapped government revenues are also being round-tripped to purchase Treasury bills.

“Why would government for instance go to banks to borrow money through Treasury Bills, when billions of its revenues are trapped in various accounts run by the agencies,” queries a source.

Bankers, on the other hand are said to be against it because it will starve them of cheap funds which they loan to customers at high rate.

Also, implementation of the account could serve as a fiscal strategy that would support the CBN’s inflation-targeting policies, as well as keeping tabs on liquidity in the system for effective monetary policy.

The banks’ argument borders on the fact that releasing the funds to the CBN in addition to the current 75 percent on public sector funds sterilised with the apex bank at zero interest rate, will cripple their operations.

Further investigations have however revealed that perpetuators of the illicit deals are using the interests accruing from the withheld funds to mop up dollars, then speculating and putting pressure on the naira which is now a major challenge for the monetary authorities to handle.

BusinessDay gathered that over N2.6 trillion of public sector funds are now being sterilised with the CBN, which reduces the lending creation power of commercial banks.

The government, through the CBN and Federal Ministry of Finance, is said to be seeking the MDAs support for the implementation of the policy, a development which analysts say has placed the burden on the Buhari government to handle with despatch as soon as he assumes office.

But, Ibrahim Mu’azu, spokesperson for the CBN attributed the slow implementation by MDAs to lack of understanding, the issue of technology and other operational challenges.

He said that “TSA is a policy of the government, not the CBN, though supported by the bank because of the positive impact it would have on the national economy. I do not believe that the MDAs have rejected it because some have complied while others are in the process.”

Ayodeji Ebo, analyst with Afrinvest securities said: “In our opinion, the implementation of a Single Treasury Account (STA) will enhance a well-coordinated monetary policy environment, as well as, improved banking sector supervision. Consequently, we expect the CBN to unleash the strings on public sector deposits from the current 75.0 percent as less public funds will be available to the banks.

“Relating to the economy, this is expected to block revenue leakages within the government parastatals as the Ministry of Finance will be able to monitor the inflows and outflows, hence augmenting the reduction in oil revenue due to falling oil prices.”

Chibuke Uche, a member of the Monetary Policy Committee, in his contribution at the last meeting, deplored fiscal indiscipline on the part of government that has become impediment to effective monetary policy formulation in the country.

“The maintenance of the accounts of government and its agencies in commercial banks, therefore, contravenes the CBN statute. Unfortunately despite all the positive noises the government has been making for some time now, that it would implement the TSA, this is yet to come to fruition. My suspicion has always been that the pecuniary interests of government officers and agents have been central to preventing the adoption of TSA.

Bluntly put, thanks to brokerage incentives, it is not uncommon for government agencies to have huge sums of money in their current accounts with commercial banks yielding little or no interests while at the same time borrowing huge sums of money at double digit interest rates from commercial banks.”

Abdulmumin Jibrin, chairman, House Committee on Finance, at the meeting held with representatives of the revenue generating agencies, last month, directed some agencies including Nigerian Maritime and Safety Agency (NIMASA) and Nigerian Port Authority (NPA) to ensure immediate compliance.

http://businessdayonline.com/2015/04/mdas-banks-sharp-practices-delay-single-account/#.VTYNP9JViko

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