Monday, September 14, 2015
Treasury Single Account (TSA) explained...READ how it will affect Banks [Stalwart Report]
Earlier in February, the Central Bank of Nigeria issued a circular directing all deposit money banks to implement the Remita e-Collection Platform. The Remita e-Collection is a technology platform deployed by the Federal Government to support the collection and remittance of all government revenue to a Consolidated Account domiciled with the CBN. This marked the beginning of the full implementation of Treasury Single Account (TSA) system in Nigeria.
Though 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 the country 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 all MDA’s in 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.
But what is a Treasury Single Account?
In a nutshell, a 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 left with different commercial banks and in a way enhance reconciliation of revenue collection and payment.
How Is TSA Run?
With particular reference to Nigeria, the Central Bank has opened a Consolidated Revenue Account to receive all government revenue and effect 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 MDA’s 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, MDA’s accounts with money deposit banks must be zerorized at the end every banking day by a complete remittance to the TSA 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 MDA’s. Difference types of account could be maintained under a TSA 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 [be] operated include imprest accounts, transit accounts and correspondence accounts. These accounts are maintained for transaction purposes for funds flowing in and out of the TSA.
Benefits of TSA
From the foregoing, it is obvious that the primary benefit of a TSA is the mechanism it provides for proper monitoring of government receipts and expenditure. In the Nigerian case, it will help to block most if not all the leakages that have been the bane of the growth of the economy. We have a situation where some MDA’s manage their finances like independent empire and remit limited revenue to government treasuries. Under a properly run TSA, this is not possible as agencies of government are meant to spend in line with duly approved budget provisions. The maintenance of a single account for government will enable the Ministry of Finance monitor fund flow as no agency of government is allowed to maintain any operational bank account outside the oversight of the ministry of finance.
How will this affect the banking system?
As a matter of fact, deposit money banks stand to lose immensely from the implementation of TSA. This is because of the fact that public sector funds constitute a large chunk of commercial banks deposit. Indeed, it is estimated that commercial banks hold about N2.2 trillion public sector funds at the beginning of sector quarter of 2015. The impact of this amount of money leaving the system can be imagined when one considers the fact that each time the monthly federal allocation is released by FAAC, the banking system is usually awashed with liquidity and as soon as this public sector funds dries up through withdrawal by the states, liquidity tightens again with interbank rates going up. Of major impact will be the movement of funds of revenue generating parastatals such as the NNPC, out of commercial banks.
In the coming months, we see a return of deposit ‘wars’ amongst banks as each DMB devices means of mobilizing funds from the private sector. We see a return of the era when women are employed by banks specifically for deposit mobilization and tacitly encouraged to use any means necessary to get funds. We see increase in deposit interest rates as a major means of inducing customers and most importantly we see a drop in lending and in the profitability of banks, at least, in the short to medium term until they fully come to terms with the impact of the policy and begin to properly position themselves for true banking business. Ultimately, we see the share price of these banks falling as investors attempt to price in the policy impact.
Improved Public Finance Management
Finally, the implementation of this programme is a critical step towards curbing corruption in public finance. This is in line with the commitment of the current administration to combat corrupt practices, eliminate indiscipline in public finance and ensure adequate fund flow that will be channelled to critical sectors of the economy to catalyze development. Nigerians are excited at the directive by President Buhari as this will mean that some government agencies that have been known to be withholding funds from the Federal Government are now under compulsion to remit monies to federal treasuries. These agencies include: Nigeria Customs Service (NCS), Nigerian National Petroleum Corporation (NNPC), Nigerian Ports Authority (NPA), Federal Inland Revenue Service (FIRS), Nigeria Immigration Service (NIMS), Nigerian Maritime Administration and Safety Agency (NIMASA), Federal Airport Authority of Nigeria (FAAN) amongst others.
SOURCE: http://thestalwartreport.com/understanding-the-treasury-single-account-tsa-system-things-you-should-know/
Though 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 the country 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 all MDA’s in 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.
But what is a Treasury Single Account?
In a nutshell, a 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 left with different commercial banks and in a way enhance reconciliation of revenue collection and payment.
How Is TSA Run?
With particular reference to Nigeria, the Central Bank has opened a Consolidated Revenue Account to receive all government revenue and effect 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 MDA’s 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, MDA’s accounts with money deposit banks must be zerorized at the end every banking day by a complete remittance to the TSA 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 MDA’s. Difference types of account could be maintained under a TSA 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 [be] operated include imprest accounts, transit accounts and correspondence accounts. These accounts are maintained for transaction purposes for funds flowing in and out of the TSA.
Benefits of TSA
From the foregoing, it is obvious that the primary benefit of a TSA is the mechanism it provides for proper monitoring of government receipts and expenditure. In the Nigerian case, it will help to block most if not all the leakages that have been the bane of the growth of the economy. We have a situation where some MDA’s manage their finances like independent empire and remit limited revenue to government treasuries. Under a properly run TSA, this is not possible as agencies of government are meant to spend in line with duly approved budget provisions. The maintenance of a single account for government will enable the Ministry of Finance monitor fund flow as no agency of government is allowed to maintain any operational bank account outside the oversight of the ministry of finance.
How will this affect the banking system?
As a matter of fact, deposit money banks stand to lose immensely from the implementation of TSA. This is because of the fact that public sector funds constitute a large chunk of commercial banks deposit. Indeed, it is estimated that commercial banks hold about N2.2 trillion public sector funds at the beginning of sector quarter of 2015. The impact of this amount of money leaving the system can be imagined when one considers the fact that each time the monthly federal allocation is released by FAAC, the banking system is usually awashed with liquidity and as soon as this public sector funds dries up through withdrawal by the states, liquidity tightens again with interbank rates going up. Of major impact will be the movement of funds of revenue generating parastatals such as the NNPC, out of commercial banks.
In the coming months, we see a return of deposit ‘wars’ amongst banks as each DMB devices means of mobilizing funds from the private sector. We see a return of the era when women are employed by banks specifically for deposit mobilization and tacitly encouraged to use any means necessary to get funds. We see increase in deposit interest rates as a major means of inducing customers and most importantly we see a drop in lending and in the profitability of banks, at least, in the short to medium term until they fully come to terms with the impact of the policy and begin to properly position themselves for true banking business. Ultimately, we see the share price of these banks falling as investors attempt to price in the policy impact.
Improved Public Finance Management
Finally, the implementation of this programme is a critical step towards curbing corruption in public finance. This is in line with the commitment of the current administration to combat corrupt practices, eliminate indiscipline in public finance and ensure adequate fund flow that will be channelled to critical sectors of the economy to catalyze development. Nigerians are excited at the directive by President Buhari as this will mean that some government agencies that have been known to be withholding funds from the Federal Government are now under compulsion to remit monies to federal treasuries. These agencies include: Nigeria Customs Service (NCS), Nigerian National Petroleum Corporation (NNPC), Nigerian Ports Authority (NPA), Federal Inland Revenue Service (FIRS), Nigeria Immigration Service (NIMS), Nigerian Maritime Administration and Safety Agency (NIMASA), Federal Airport Authority of Nigeria (FAAN) amongst others.
SOURCE: http://thestalwartreport.com/understanding-the-treasury-single-account-tsa-system-things-you-should-know/
Breaking: La Casera shut down as workers revolt against mass sack. La Casera responds
La Casera Company Plc. is the manufacturer of the popular La Casera drink.
The workers say they are protesting because the company’s management responded to their efforts at unionism by firing all of them.
----------------------------------------------------------------------------------------------------------------
LA CASERA RESPONSE
The La Casera Company has said it shut down operations at its Mile 2 site on Apapa-Oshodi Expressway because it could no longer guaranty the safety of workers after its premises was invaded Weekend, by over 200 demonstrators led by representatives of the National Union of Food, Beverages and Tobacco of Employees (NUFBTE).
In a statement Monday, by Tola Bademosi, spokesman of the company, said the invasion on its facility led to disruption of its production, alleging that workers were compelled to stop work and asked to sign consent forms by the unionists.
Sunday, September 13, 2015
Nigeria's Army Chief spends the night in former Boko Haram fortress (Premium Times)
A night with Nigeria’s Chief of Army in Gamboru
The border town of Gamboru, a town in North-Eastern Nigeria, has witnessed several attacks by Boko Haram insurgents. Apart from attacking the village and sending residents fleeing to nearby communities including Fotokol in Cameroon, Boko Haram also occupied Gamboru and for about a year lorded over the area.
However on Wednesday, one week after Nigerian soldiers recaptured the town after fierce battles with the insurgents, the Nigerian Army chief, Tukur Buratai, vowed the town would never fall to insurgents again. In an unprecedented move, the army chief not only visited Gamboru to fraternise with soldiers, he slept in the quiet town.
In a display of strength, Mr. Buratai, a Lieutenant General, also ordered the hoisting of Nigeria’s flag that was a taboo during the Boko Haram conquest.
For anyone that saw what the terrorists made of the once bubbling and economically vibrant Gamboru, having a army chief pass a night there would be one of the craziest things a top soldier would consider doing.
Friday, September 11, 2015
The Banker who married a Danfo Driver (A Love Story)
I was an active member of my students union in my days in UNIBEN, from 1988 to 1992, I took a Bsc Economics & statistics degree and then ended up in Elf Petroleum on Kofo Abayomi, Lagos where I worked in the Information Systems and Telecommunications department. This was my invite into postgraduate in Computer Science, which I excelled in with honours.
My good fortune changed in 1994 when my contract was not renewed because Elf Was facing an uncertain future in Nigeria.
I was just 25 years old and just when I started thinking my life was settling into a nice rhythm, it was punctuated by this unfortunate event. Days turned into miserable months as I couldn’t secure another job. Eventually, I lost my flat and had to move in with a friend.
At the time, I had become a committed Christian worshiping in Winners Chapel, Raji Oba, Lagos. I learnt from Bishop Oyedepo that there’s is no food for the lazy so I secured N190,000 loan and got an L 300 Mitsubishi bus (danfo).
"I paid N10,000 and exchaged my Q10 for B-29 soap :(" Computer Village Stories
I had been usiing my Blackberry Bold 5. I think. One
of those camera phones and it was clear that The Lord
wanted me to upgrade. A new year beckoned and I wanted to
enter it with one of those phones that used stylus and were
y’know big. So, ladies and gentlemen, I proceeded to proceed to
Computer Village to make my dream a reality. I had with me
my old phone and about N10, 000. The plan of course was to
do a swap, add some cash and get the precious Q10. Gosh, I
was so excited.
That’s how I got there with my own two legs and saw those
guys that sell phones on the street. Asked one if he had the
phone o, he said yes. Can’t remember his name sha, but he sha
showed me the Q10. I played with it, even made a demo call
and all to be sure it worked. Baba took me off the street saying,
“We can’t do business here o, before these agberos will ask you
to settle them”. So, he took me to a shed. All this while, he
wrapped the Q10 in a white handkerchief saying he didn’t
want it to scratch and that’s how he keeps his phones. Me that I
wasn’t even paying attention. I was just excited ‘cos my level
was about to change. Nigga just give me phone, abeg.
of those camera phones and it was clear that The Lord
wanted me to upgrade. A new year beckoned and I wanted to
enter it with one of those phones that used stylus and were
y’know big. So, ladies and gentlemen, I proceeded to proceed to
Computer Village to make my dream a reality. I had with me
my old phone and about N10, 000. The plan of course was to
do a swap, add some cash and get the precious Q10. Gosh, I
was so excited.
That’s how I got there with my own two legs and saw those
guys that sell phones on the street. Asked one if he had the
phone o, he said yes. Can’t remember his name sha, but he sha
showed me the Q10. I played with it, even made a demo call
and all to be sure it worked. Baba took me off the street saying,
“We can’t do business here o, before these agberos will ask you
to settle them”. So, he took me to a shed. All this while, he
wrapped the Q10 in a white handkerchief saying he didn’t
want it to scratch and that’s how he keeps his phones. Me that I
wasn’t even paying attention. I was just excited ‘cos my level
was about to change. Nigga just give me phone, abeg.
Friday, August 28, 2015
PRESIDENT BUHARI APPOINTS SGF, CHIEF OF STAFF, OTHERS
President Muhammadu Buhari has approved the following appointments:
Engr. Babachir David Lawal - Secretary to the Government of the Federation
Alhaji Abba Kyari - Chief of Staff to the President
Col. Hameed Ibrahim Ali (retd.) - Comptroller-General, Nigerian Customs Service
Mr. Kure Martin Abeshi - Comptroller-General, Nigerian Immigration Service
Senator Ita S.J. Enang - SSA to the President on National Assembly Matters (Senate)
Hon. Suleiman A. Kawu - SSA to the President on National Assembly Matters (House of Representatives)
Alhaji Abba Kyari - Chief of Staff to the President
Col. Hameed Ibrahim Ali (retd.) - Comptroller-General, Nigerian Customs Service
Mr. Kure Martin Abeshi - Comptroller-General, Nigerian Immigration Service
Senator Ita S.J. Enang - SSA to the President on National Assembly Matters (Senate)
Hon. Suleiman A. Kawu - SSA to the President on National Assembly Matters (House of Representatives)
The appointments are with effect from today, August 27, 2015.
Monday, August 24, 2015
Fashola spent N139 billion on 2 boreholes - LASG (as Pigs refuse to leave Fashola)
The project was completed by Deux Projects Limited according to a report published by the state government. The report, which was part of the awarded contracts by the Lagos State Tenders Board in 2013, was seen on the website of the Lagos State Public Procurement Agency.
In the same year, N640m was spent by the Fashola administration for the reconstruction of a car park and other associated works at the Lagos House, Marina. The report stated that the N640m contract was given to Julius Berger Plc as part of phase two of the reconstruction of Lagos House where Fashola lived during his eight years in government.
In the same year, N300m was spent on the relocation of cables belonging to the Power Holding Company of Nigeria at the Lagos State University Teaching Hospital. The contract was awarded to Deux Projects Limited.
According to the report, the former governor also spent N175m to replace the railings of a pedestrian bridge on Carter Bridge from Ido to Idumota with concrete railings. The contract was awarded to A Abicon Engineering Limited.
According to the report, N220m was spent on the facility management of the Lagos State University College of Medicine. The contract was awarded to Deux Projects Limited.
The former governor, according to the report, spent N619m on surface repair on Ajara-Erekiti-Iragon-Ikoga Road in Badagry Local Government.
According to the report, Fashola spent N1.2bn on the construction of an unidentified multi-storey building in Onikan, Lagos.
The former governor was also said to have spent N1.6bn on the construction of a 48-bedroom hotel at Lagos State VIP Chalets, Badagry.
About N510m was spent on the remodelling and equipping of the official residence of the state’s Chief Judge at 4 Thompson Avenue, Ikoyi, Lagos, according to the report.
Source: PunchAbout N165m was spent on the construction of an 18-classroom block at Ajara Senior Grammar School, Ajara Badagry. The same amount was also spent on an 18-block classroom at Community Senior/Junior Secondary School, Bayeku, Ikorodu.
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