A university don at the Michael Okpara University of Agriculture Umudike, Abia State, Prof. Michah Okafor, has said that the national economy will be healthier if the Treasury Single Account (TSA) is well implemented by the government. Okafor, a fellow of the Institute of Chartered Accountants of Nigeria (ICAN), made this assertion at the Evangel University in Okpoto, Ebonyi State.
In a paper entitled: “Full Implementation of Treasury Single Account (TSA) in Nigeria: Implications on the Economy,” he said “TSA will lead to better fiscal and monetary policy coordination, as better transparency is achieved through reconciliation of fiscal and banking data, which in turn improves the quality of fiscal information and management that will benefit and improve the country’s economy generally. “Banks’ profiteering on free money is dangerous to Nigeria’s economic growth; hence the TSA will make the banks to return to real banking. Nigerian banks claim to be the best on the continent and have received numerous awards, some are ranked among the 1000 banks globally, yet our bankers are worried by the absence of free government funds, which makes them look suspect on their activities.”
He further said that the TSA would result to fundamental changes in the economy thereby help government to unify banking arrangements, guarantee oversight of cash resources, promote efficiency, transparency and accountability in government payments, adding that it would ensure that government has access to funds when needed and reduce overall cost of government borrowing.
He outlined about nine benefits of TSA, among which are guarantee of timely information on government cash resources as complete updated balances will be available daily; better appropriation control as TSA allows the Ministry of Finance to have full control over budget allocations and strengthens the authority of the budget appropriation.
He pointed out that the full implementation of TSA in the short run will make the rate of exchange of the Naira to the world’s major currencies to appreciate, as excessive liquidity will be mopped up from the system, thereby stimulating various sectors of the economy. “Though the banking sector will be hit by the TSA scheme as the large chunk of bank funds over the years have been “Hot Money” provided by government agencies, but on the long run, TSA implementation effects will be heartening, as blockages of leakages of public funds will result in releasing enough funds to invest in infrastructure, thereby stimulating various sectors of the economy whereby companies for instance will provide better returns for investors which will boost activities in the capital market as a result of economic diversification, inflation rates will drop and stimulation of the real sectors of the economy will create jobs for our teeming youth population,” he said.