IMPLICATION OF TREASURY SINGLE ACCOUNT ON BANKING SECTOR OF NIGERIA AND THE ECONOMY AS A WHOLE
1.1 BACKGROUND TO THE STUDY
Treasury Single Account is a public accounting system under which all government revenue, receipts and income and collected into one single account, usually maintained by the country’s Central Bank and all payments done through this account as well. The purpose is primarily to ensure accountability of
government revenue, enhance transparency and avoid misapplication of public funds. The maintenance of a Treasury Single Account will help to ensure
proper cash management by eliminating idle funds usually le
with different commercial banks and in a way enhance reconciliation of revenue collection
and payment (Adeolu, 2015).
Section 80 (1) of the 1999 Constitution as amended states “All revenues, or other moneys raised or received by the Federation (not being revenues or other
moneys payable under this Constitution or any Act of the National Assembly into any other public fund of the Federation established for a specific purpose)
shall be paid into and form one Consolidated Revenue Fund of the Federation”; successive governments have continued to operate multiple accounts for the
collection and spending of government revenue in flagrant disregard to the provision of the constitution which requires that all government revenues be remitted into a single account. It was not until 2012 that government ran a pilot scheme for a single account using 217 ministries, department and agencies as
a test case. The pilot scheme saved Nigeria about N500 billion in frivolous spending. The success of the pilot scheme motivated the government to fully
implement TSA, leading to the directives to banks to implement the technology platform that will help accommodate the TSA scheme. The recent directives
by President Mohammed Buhari that all government revenues should be remitted to a Treasury Single Account is in consonance with this programme and in
compliance with the provisions of the 1999 constitution (CBN, 2015).
The Central Bank has opened a Consolidated Revenue Account to receive all government revenue and erect payments through this account. This is the Treasury Single Account. All Ministries, Departments and Agencies are expected to remit their revenue collections to this account through the individual commercial banks who act as collection agents. This means that the money deposit banks will continue to maintain revenue collection accounts for
Ministries, Departments and Agencies but all monies collected by these banks will have to be remitted to the Consolidated Revenue Accounts with the CBN at
the end of each banking day. In other words, Ministries, Departments and Agencies accounts with money deposit banks must be zerorized at the end every
banking day by a complete remittance to the Treasury Single Account of all revenues collected. The implication is that banks will no longer have access to the
float provided by the accounts they maintained for the Ministries, Departments and Agencies. Difference types of account could be maintained under a Treasury Single Account arrangement and these may include the TSA main account, subsidiary or sub-accounts, transaction accounts and zero balance
account. Other types of accounts that could operated include imprest accounts, transit accounts and correspondence accounts. These accounts are
maintained for transaction purposes for funds flowing in and out of the Treasury Single Account (Adeolu, 2015).