In the light of Nigeria’s dwindling revenue and the attendant economic challenges, experts have said it is high time Federal Government optimized its Treasury Single Account (TSA) program, the scheme designed mainly to block financial leakages, and improve transparency and accountability across the country’s public sector institutions.
Benefits of optimized TSA
Commenced in 2012 by the Jonathan administration, Nigeria’s TSA has come a long way with the potential to deliver more benefits to the country. The benefits of an optimized TSA building on existing foundations, they say, cannot be overemphasized at times like this.
An optimized TSA provides comprehensive and timely information on government cash resources and improves appropriation and operational control during budget execution. It also enables efficient cash management, eliminates bank charges, reduces transaction costs, facilitates efficient payment mechanisms, and improves bank reconciliation and quality of fiscal data.
In addition, an optimized TSA lowers liquidity reserve needs and reduces the volatility of cash flow through the treasury, thus allowing the maintenance of a lower cash reserve and buffer to meet unexpected fiscal volatility.
Sources at the Office of the Accountant General of the Federation suggest that the TSA is currently running just about 40% of its capacity despite its recognition as one of Africa’s most successful TSA implementations.
Hence the urgent need to optimize the operational processes, rules of engagement, and the underlying payment technology and systems.
The sources are however optimistic that the Acting Accountant General of Federation (OAGF), Mr. Okolieaboh Sylva is the right man to drive the optimization of TSA.
“Okolieaboh Sylva is Mr. TSA himself. The TSA scheme is his baby and there is no way he would watch it flounder now that he is the oga patapata,” one of the sources assured.
It would be recalled that Federal Government, in July, quietly replaced Mr. Anamekwe Nwabuoku, as the acting AGF with the new Acting AGF, Mr. Okolieaboh. Sylva was formerly the Director, Treasury Single Account (TSA) in the office of the Chief Accountant of the Federation.
AGF and TSA
The Accountant General of the Federation is the administrative head of the country’s treasury, and the office holder is often appointed by the President of the Federal Republic of Nigeria to serve a four-year term as the constitution stipulates.
The management of the TSA which is a public accounting system through which all government payments, revenue, receipts, and income are transferred into a single account held in the country’s Central Bank is under the direct control and supervision of the AGF.
The Central Bank apart from being the banker to the government where all TSA funds are kept also provides and manages the payment technologies required for the effective functioning of the TSA.
The Treasury Single Account (TSA) is part of the Federal Government of Nigeria’s public financial management reform, designed to keep track of all its revenue, receipts, and expenditure from a single point of view so as to have a consolidated view of its cash position at any point in time.
As in other countries where TSA is implemented, it is designed to put governments in firm control of their cash resources by allowing the central bank to effectively play its role as banker to the government and not ceding the responsibility to commercial banks who end up lending government’s money to the government at unbelievable rates. A well-implemented TSA progressively blocks financial leakages and improves transparency and accountability in the public sector.
Sylva as Mr. TSA
It is an incontrovertible fact that the current AGF, a chartered accountant of about thirty years is well equipped to deepen the management of TSA.
His achievements under the FGN Public Financial Management (PFM) reforms and the TSA scheme speak for themselves.
It is in the record that Sylva led the team that developed and implemented the FGN National Chart of Accounts (NCOA) which is the foundation upon which the Nigerian government accounting system is operating. The National Chart of Accounts covers all Ministries, Departments, and Agencies (MDAs) and underlies all planning, budgeting, accounting, and reporting processes of Government.
The objective of the NCOAtoolkit is to provide states with a comprehensive and consistent set of instruments that will support upgrading the State Chart of Accounts (COA) to make them compatible with NCOA.
The standardization of the COA is part of the overall effort aimed at enhancing the attainment of minimum financial reporting standards that are in line with international best practices
Sylva was also a team leader responsible for designing the Public Financial Management (PFM) framework and its implementation. This led to Nigeria adopting the Government Integrated Financial and Management Information System (GIFMIS) and TSA.
He was the chairman of the TSA Inter-agency ministerial implementation committee and eventually led the implementation and management of the highly successful World Bank-recognized TSA project. And to cap it all he was Nigeria’s pioneer director of the TSA department at the OAGF in charge of the strategy, implementation, and operations of the TSA scheme, a position he held until his appointment as the Acting AGF.
Sylva has attended numerous training progammes and presentations on different components of PFM. Among the pieces of training, he has attended are Government Finance Statistics by IMF in Washington DC; Public Expenditure & Financial Accountability by the PEFA Secretariat/IMF in Abuja, and Public Financial Management Reform in a Changing World by the Harvard Kennedy School, Boston MA, USA.
He also served as the chairman of the national TSA technical committee that hosted and provided support to the Government of Gambia on TSA implementation.
What Should Acting AGF do to optimize TSA?
As a confirmed public sector reformist, the Acting AGF is expected to live up to if not surpass his track record of outstanding performance at the lower cadre of the bureaucracy.
Amongst others, the Acting AGF is expected to activate the foreign currency component of TSA which for unexplainable reasons has remained un-implemented over the ten years that TSA has been operational in Nigeria. This will enable all payments and collections in foreign currency to be visible to Government as applicable for local currency.
The AGF is also expected to upscale and optimize the national electronic Invoicing and electronic Receipting system which has always been part of Nigeria’s TSA design.
This will ensure all government payables are monitored from a single point which leads to more effective national cash flow planning.
With the implementation of the national electronic receipting, every payment to the government would be verifiable from any government agency located anywhere in the country as there would be only a single version of the truth of government revenues and income.
The new Acting AGF is expected to undertake the review and optimization of IPPIS, especially in light of allegations that the centralized system has become disjointed and subject to abuse at different levels. As a subset of the TSA system, the integrity of IPPIS should be re-affirmed as a reliable government payroll system for which the Accountant General has primary responsibility.
Another area where expectations are very high is the development and Implementation of an automated reconciliation system to eliminate the pain and rigour MDAs currently face with the almost manual reconciliation process that has been in place since the commencement of TSA.
This becomes even more important as MDAs have been faced with the non-availability of detailed bank statements required for reconciliation.
The Acting AGF is also expected to further optimize cash management and the budget planning process which are critical elements of Nigeria’s PFM reform aimed at enhancement of FGN revenue generation and monitoring process.
Providence seems to have offered Sylva a unique window of opportunity to complete the work he started about a decade ago, and bequeath to Nigeria, a solid TSA legacy with silver linings.
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SOLA FANAWOPO, Co-Founder /CEO eMaginations Limited writes from Lagos
