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 (Adeolu, 2016).

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 Nigeria 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 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 (CBN, 2016).

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 Ministries, Departments and Agencies 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,
Ministries, Departments and Agencies accounts with money deposit banks must be
zerorized at the end every banking day by a complete remittance to the Treasury
Single Account 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 Ministries, Departments and Agencies. Difference types of account could be
maintained under a Treasury Single Account 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 operated include imprest
accounts, transit accounts and correspondence accounts. These accounts are
maintained for transaction purposes for funds flowing in and out of the Treasury
Single Account (Adeolu, 2016).  

From the foregoing,
it is obvious that the primary benefit of a Treasury Single Account 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 Ministries, Departments and Agencies manage their finances
like independent empire and remit limited revenue to government treasuries.
Under a properly run Treasury Single Account, 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.

As a matter of fact,
deposit money banks stand to lose immensely from the implementation of Treasury
Single Account.  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 2016.  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, 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.

1.2   STATEMENT OF THE PROBLEM