The Treasury Single Account [TSA] has occupied our consciousness lately. While countless articles have been published about its benefits, features and objectives, not many have revealed its strategic benefits to Nigerian indigenous technology advocacy and the nation at large. This write-up would seek to expand the frontiers of knowledge and engagement via the help of an International Monetary Fund [IMF] publication dated 2010 and position TSA as a positive influence for homegrown technology in Nigeria.
According to the IMF working paper WP/10/143 of 2011 on Treasury Single Account: Concept, Design and Implementation issues “Government banking arrangements are an important factor for effective management and control of government’s cash resources. Such banking arrangement should be designed to minimize the cost of government borrowing and maximize the opportunity cost of cash resources. This requires ensuring that all cash received is available for carrying out government’s expenditure programmes and making payments in a timely fashion.”
The document – a global benchmark on TSA – highlights the consequences of governments that do not have firm control over its cash resources. Such consequences would include “cash balances in banks accounts often failing to earn market related remunerations”.
In Nigeria, before the advent of TSA, federal government earned 0% interest rate on trillions of naira of deposited by the MDAs in several accounts across the banks. Meanwhile, government had to borrow its own funds by issuing treasury bills at an average of 15%. Is that not a worse economic malady? Government was unaware that these resources would incur unnecessary borrowing costs on raising funds to cover a perceived cash shortage.
Furthermore, the document posits that idle government cash balances domiciled in the commercial banking sector are used by the banks to extend credit facilities at no benefit to the government. While this reality favours the banks, it does nothing to help the government or the people in whose trust the government earned the money.
However, the document summarizes that establishing a unified structure of government bank account via the TSA was not only desirable, it is a panacea for addressing above problems as well as improve cash management and control by government.
According to the IMF, three essential features of a full-fledged TSA are [1] Government banking arrangements should be unified to enable Ministry of Finance [MoF] oversight of government cash flow in and out of these bank accounts. [2] No other government agency operates bank accounts outside the oversight of the treasury [in the case of Nigeria, the Office of the Accountant General of the Federation [OAGF]. [3] The consolidation of government cash resources should be comprehensive and encompass all government cash resources both budgetary and extra-budgetary, these three conditions are the fundamental basis of Remita’s operation of the TSA in Nigeria.
These essential features, therefore, put paid to some MDAs’ clamour for exemption from the TSA, which seems to have informed the presidential directive that the TSA should be implemented without exemption. President Muhammadu Buhari [PMB]’s September 2015 deadline compelled all MDAs to comply.
A major aspect thrown up by the FGN-TSA initiative is the place of technology, especially the homegrown variant. Media reports suggested that the TSA is moved by Remita. This platform is an entirely locally developed electronic platform chosen by the CBN, we were made to believe, after a multi-level and rigorous evaluation exercise in 2011.
The platform developed and owned by the 23-year-old company founded by John Obaro, a computer scientist and former banker, is currently the brain behind the actualization of a 16-year constitutional provision, which until 2015 remained a dream.
Does this then signal the arrival of a matured, indigenously developed payment technology like Mpesa in Kenya? Is this the kind of patronage of homegrown technology by government required to stimulate the local IT industry by making Nigeria a software destination of choice?
Interestingly, in the face of the ruckus of allegations pervading the media, no one has derided the indigenously developed payment platform for its incapability to meet the FGN-TSA requirements. The brouhaha seems to be around commercials, which I would want to believe can be resolved between the parties involved. The incontrovertible truth is that Remita, a locally designed, implemented and supported solution, has been working to support the government for about 4 years.
If you ask me, Nigeria needs to hold its head high if Remita platform was selected on merit over and above other foreign options. This is a sign of victory for homemade software. This is a moment of national pride. This is not a time to bicker on contractual commercial issues. This is a period to unite behind this common achievement. This is a time to celebrate our technological advancement.
Anyway, let us sip again from the IMF working papers, inter alia, “regarding the architecture of the TSA, it should be underscored that there is no single TSA model or design. The TSA model to be implemented in each country depends on the stage of development of the quality of its public institutions and financial management systems, its technological development and communications infrastructure, and the degree of maturity of its banking system.”
It may therefore be a unique opportunity for Nigeria to package its experience and homemade technology in a box as an exportable commodity to other African and non-African countries. After all, our entire national accounting software – Government Integrated Financial Management Information System [GIFMIS] – is made in Estonia, a country of two million people. Nigeria will forever depend on Estonia to support and upgrade this software as long as we keep using it.
Here is my verdict: Let us package what we have as a statement of national pride. Let us earn some respect in the IT landscape. Let us take pride in our own ‘thing.’ Let us celebrate the triumph of indigenously developed local software. That is a sign of victory. {fcomments}
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