The Effect Of Treasury Single Account On The Economy Of Nigeria
This study is on the effect of treasury single account on the economy of Nigeria. The total population for the study is 200 staff of CBN in Akwa Ibom state. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made human resource managers, accountants, customer care officers and junior staffs were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies
1.1 Background of Study
The Treasury Single Account (TSA) policy came into being by the federal government of Nigeria to minimize or completely block all financial leakages in other to promote transparency and to reduce the level of mismanagement of government’s revenue, the essence of treasury single account is majorly to bring all government accounts together; with this there will be a limited amount of revenue loss and mismanagement by the revenue generating agencies in Nigeria.
The idea of treasury single account by the federal government of Nigeria came into full existence when some agencies refused to declare and remit the agreed 25 percent of their annual revenue they generated to the treasury as demanded by law. The refusal to remit these funds has effect on the economy of Nigeria.
As at 2012 about N120 billion was forcefully collected by the federal government of Nigeria from MDAs being 25 percent of their gross revenue to the treasury also another N34 billion was collected as at the year 2013. Before this time most of the MDAs were very reluctant to remit the required amount as requested by the federal government of Nigeria to treasury by law. According to (Daily Trust Editorial, 2015:16) defined treasury Single Account is a kind of public accounting system through which all government revenue, all receipts and all the income are collected into one single account, which is usually maintained and managed by the country’s Central Bank not only that; all payment are done virtually through this account. The primary purpose of this is to ensure accountability of government revenue, enhance transparency and avoid misappropriation of public funds. The management and maintenance of a Treasury Single Account will help to ensure proper cash management by completely eliminating all in active funds that are left with different commercial banks in Nigeria and in a way to improve on the reconciliation of revenue collection and payment according to (Adeolu, 2015).
The continuous revenue mobilization and the Nigeria fiscal commission released a complete audit report that showed that some banks are withholding a huge amount of about N12 billion revenue that are collected for the Nigerian customs service and the federal inland revenue service.
According to the Director, Corporate Communications Department of the Central Bank of Nigeria, Ibrahim Muazu said that the TSA as the federal government policy is part of the national payment initiative that aimed at modernizing the Nigeria payment system. MDAs are complying and it is going to have positive impact on the economy.
1.2 Statement of Problem
The order by the President of the federal republic of Nigeria was that all revenues due to the Federal Government or any of the agencies of the federal government of Nigeria must be paid into the treasury single account and maintained by the central bank of Nigeria (CBN). The idea seems a welcome development in Nigeria as it aimed at fighting fraud and the level of corruption in Nigeria. Corruption has become a major issue in the growth and development of the Nigeria economy. Nigeria is a country that is blessed with good resources but due to the high level of corruption, the country loos very poor. According to the director of center for social justice, a civil society group based in Abuja by name Eze Onyekpere defined TSA as a process and as a tool for the effective and efficient management of the finances, banking and cash position of the federal government of Nigeria. Eze Onyekpere stated again that it pools and unifies all government accounts through a single treasury account. Among the issue of treasury single account there are some other advantages which are legion.
The consolidation into TSA made it possible for the timely capture and payment of all revenue due to the federal government into the government coffers without the intermediation arrangement of multiple banking (Vanguard Editorial ,2015) Notwithstanding some of the worries raised against the TSA issues and prospects, most Nigerians seem to be pleased with the implementation of TSA. It is widely believed that business entrepreneur that the scattering of government funds in different commercial banks serve as a conduit for the continuous fraudulent activities by government officials in the MDAs according to John Ocheni. The peoples thought about this new method, is that the leakages would be blocked and openness and accountability enhanced in the running of government businesses. This leakages that used to be there in the system where most people used money as they want and decided what to return and when to return the money to the government will no more be there. With this there will be a better control and management of government revenue.
1.3 Aim and Objectives of Study
The objectives of the research work are to solve the above stated problem and to help the federal government of Nigeria on policy generation and decision making; some of the objectives are stated as:
- To determine the extent to which TSA can prevent financial leakages, to increase transparency and proper accountability in the public financial management.
- To determine the effect of TSA on the economy of Nigeria
- To determine the relationship between TSA and public financial management
- To examine the role of TSA in the blockage of financial leakages
1.4 Research Hypothesis
For the successful completion of the study, the following research hypotheses were formulated by the researcher;
- H0: there is no extent to which TSA can prevent financial leakages, to increase transparency and proper accountability in the public financial management.
H1: there is extent to which TSA can prevent financial leakages, to increase transparency and proper accountability in the public financial management.
- H02: there is no relationship between TSA and public financial management
H2: there is relationship between TSA and public financial management
1.5 Significance of Study
The study will be of immense benefit to both researchers, the federal government of Nigeria in policy generation and decision making, the study will also reveal the nature of the relationship between TSA and the Nigeria economy; it will discuss the role of TSA in financial management; finally the study will show the effect of TSA on the Nigeria economy.
1.6 Scope and Limitation of the Study
The study will focus on the effect of treasury single account on the economy of Nigeria. The researcher encounters some constrain which limited the scope of the study;
a) Availability of Research Material:
The research material available to the researcher is insufficient, thereby limiting the study
The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
c) Organizational Privacy:
Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities.
1.7 Definition of Terms
Treasury single account is a financial policy introduced by the federal government of Nigeria in 2012 to consolidate all inflows from the country’s ministries, departments and agencies (MDAs) by way of deposit into commercial banks, traceable into a single account at the Central Bank of Nigeria.
A positive and clear financial statement of Nigeria
Refers to outflow from a circular flow of income model. In a two sector model, all individual income is sent back to employers when goods and services are purchased, and back to employees through wages and dividends. Leakage occurs when income is taken out through taxes, savings and imports.
Is the study of the role of the government in the economy. It is the branch of economics which assesses the government revenue and government expenditure of the public authorities and the adjustment of one or the other to achieve desirable effects and avoid undesirable ones.
1.8 Organization of the Study
This research work is organized in five chapters, for easy understanding, as follows
- Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
- Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
- Chapter three deals on the research design and methodology adopted in the study.
- Chapter four concentrate on the data collection and analysis and presentation of finding.
- Chapter five gives summary, conclusion, and recommendations made of the study
Summary, Conclusion and Recommendation
It is important to ascertain that the objective of this study was on the effect of treasury single account on the economy of Nigeria. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of on the effect of treasury single account on the economy of Nigeria
This study was on the effect of treasury single account on the economy of Nigeria. Four objectives were raised which included: To determine the extent to which TSA can prevent financial leakages, to increase transparency and proper accountability in the public financial management, to determine the effect of TSA on the economy of Nigeria, to determine the relationship between TSA and public financial management, to examine the role of TSA in the blockage of financial leakages. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of CBN in Akwa Ibom state. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made human resource managers, accountants, customer care officers and junior staffs were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies
Based on the finding of this study, TSA policy will go a long way in blocking the identified financial leakages in revenue generation and promote transparency and accountability in the public financial system if it is fully implemented. It will equally pave way for the timely payment and capturing of all revenues going into the government treasury, without the intermediation of multiple banking arrangements. The policy will also enable the government at the centre to know its cash position at any given time without any hindrance
Based on the findings of the study, the researcher recommends the followings:
- For the success this policy, government should engage in massive public enlightenment about the important of the policy
- Government should overhaul the capacity of the Federal Ministry of Finance and the CBN to cope with challenges associated with enforcement of the provisions of the TSA.
- Government should secure as soon as possible the appropriate legislative support to facilitate the relevant regulatory environment which will drive the effective implementation of the TSA.
- Another suggestion is that, there is need for more legislation to cover the states and local government level since the policy in question only covered the federal level.
- TSA policy to be effective the Fiscal Sunshine Bill needs to be put in place, which if enacted will open up the financial activities of government in a way that there will be no more hiding place for those who divert or loot government money. For instance, with Fiscal Sunshine Act in place, budgeting process and implementation, including contract awards, should be in the open for Nigerians to see both how revenues are generated and how public money is being spent by those in government, and why.
- Government should review the TSA policy to specifically safeguard the financial autonomy of the Nigerian educational institutions.
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