President Muhammed Buhari’s order to all federal ministries, departments and agencies (MDAs) to pay all government revenues, incomes and other receipts into a Treasury Single Account (TSA) with the Central Bank of Nigeria (CBN) will significantly affect the volume of liquidity in the banking sector.

This may also constrain banks’ full year results for 2015.

The federal government said the move was aimed at promoting transparency and facilitating compliance with Sections 80 and 162 of the constitution.



The TSA is a unified structure of government bank accounts enabling consolidation and optimal utilisation of government cash resources. It is a bank account or a set of linked bank accounts through which the government transacts all its receipts and payments and gets a consolidated view of its cash position at any given time.



Agencies like the CBN, Securities and Exchange Commission (SEC), Corporate Affairs Commission (CAC), Nigerian Ports Authority (NPA), Nigerian Communications Commission (NCC), Federal Airports Authority of Nigeria (FAAN), Nigerian Civil Aviation Authority (NCAA), Nigerian Maritime Administration and Safety Agency (NIMASA), Nigeria Deposit Insurance Corporation (NDIC), Nigeria Customs Service (NCS), Nigerian National Petroleum Corporation (NNPC), Federal Inland Revenue Service (FIRS) and Department of Petroleum Resources (DPR), among others, are affected by the directive.



Speaking to THISDAY on Monday, the Head of Research at Sterling Capital Limited, Mr. Sewa Wusu, explained that the policy will affect the flow of liquidity in the banking system. He however, supported the decision by the federal government to fully implement the TSA, saying it would bring about transparency and effective revenue management.



“The liquidity in the banking system will definitely be affected. This is because once the banks collect government’s funds, it will be sent directly to the TSA. The free funds some banks used to enjoy will no longer be there,” Wusu added.



Nonetheless, he stressed that the decision to fully enforce the policy would help to ensure the consolidation of government’s revenue. He argued that prior to the initiative, government funds in banks were fragmented, a system that gave room for corruption.



“But now that the TSA is to be fully implemented, it will help to block leakages and uncover idle cash. It will also allow complete and timely information of government cash,” he explained.



The CBN Director, Corporate Communications, Ibrahim Muazu, had described the TSA as a government policy, which is part of the national payment initiative aimed at modernising the country’s payment system.



“Many MDAs have complied and it is going to have positive impact on the economy,” he added.



On their part, analysts at Afrinvest West Africa Limited argued that “in light of the TSA policy, we expect the CBN to unleash the strings on public sector deposits from the current 75 per cent as we anticipate less public funds will be available to the banks.”



Also, the CBN had advised all banks in the country to put in place necessary systems in their branches and to also sensitise their staff members on the federal government’s electronic revenue collection scheme (e-collection) because of the commencement of the TSA.

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This thing has to be put straight. if we want buhari to sanitize this country there should be no stone too precious to turn....if GEJ has nothing to hide let him just sit down and rest. if Buhari wanted to witch hunt anybody we know a lot of people that will be in Detention now awaiting trial.....but with all this shout here and there due process of the law has to be followed.....the guilty should start arranging their homes because if not all, some of them has a long journey away from home to jail......JAMES IBORI is a simple example he has been on a long journey away from home but very soon he will return.

the idea of GEJ looking for a soft landing or saying this and that is not Good for the change every Nigerian wants. his moves are currently anti-people. you are been called the HERO OF PEACE so please remain peaceful and calm while the corruption Surgeon carry out the surgical operation to eradicate this cancerous infection call corruption that grew into the heart, lever and the entire reproductive system of the country.
if humans can beat cancer Nigeria can also beat curruption.

Source


http://www.thisdaylive.com/articles/banks-face-liquidity-strain-as-fg-fully-enforces-treasury-single-account/217200/