IMPLICATION OF TREASURY SINGLE ACCOUNT ON BANKING SECTOR OF NIGERIA AND THE ECONOMY AS A WHOLE

  • Type: Project
  • Department: Accounting
  • Project ID: ACC1516
  • Access Fee: ₦5,000 ($14)
  • Chapters: 5 Chapters
  • Pages: 65 Pages
  • Format: Microsoft Word
  • Views: 1.6K
  • Report This work

For more Info, call us on
+234 8130 686 500
or
+234 8093 423 853


CHAPTER ONE
INTRODUCTION
1.1   BACKGROUND TO THE STUDY
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, 2015).

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, 2015). 

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, 2015).   

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 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, 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
As the Federal government of Nigeria introduces Treasury Single Account, Banks will continue to device 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. However, the implementation of this programme is a critical step towards curbing corruption in public finance. This is a tool to combat corrupt practices, eliminate indiscipline in public finance and ensure adequate fund flow that will be channeled to critical sectors of the economy to catalyze development. 

1.3   OBJECTIVES OF THE STUDY
The following are the objectives of this study:

  1. To examine the implications of Treasury Single Account on the banking sector in Nigeria.
  2. To examine the implications of Treasury Single Account on the economic development in Nigeria.
  3. To identify the benefits of Treasury Single Account.

1.4   RESEARCH QUESTIONS

  1. What are the implications of Treasury Single Account on the banking sector in Nigeria?
  2. What are the implications of Treasury Single Account on the economic development in Nigeria?
  3. What are the benefits of Treasury Single Account?

1.6   SIGNIFICANCE OF THE STUDY
The following are the significance of this study:

  1. The results from this study will educate the general public on the benefits of Treasury Single Account to the economy of the country. It will also educate on its temporary effect on the banking industry as huge sum of money will be leaving the sector suddenly.
  2. This research will also serve as a resource base to other scholars and researchers interested in carrying out further research in this field subsequently, if applied will go to an extent to provide new explanation to the topic.

1.7   SCOPE/LIMITATIONS OF THE STUDY

LIMITATION OF STUDY
Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.


REFERENCES 
Adeolu I. A. (2015). Understanding The Treasury Single Account (TSA) System – Things You Should Know.   Business & Economy, Market Development.
CBN (2015) “Revised Guidelines for compliance with Treasury Single Account by Banks in Nigeria

IMPLICATION OF TREASURY SINGLE ACCOUNT ON BANKING SECTOR OF NIGERIA AND THE ECONOMY AS A WHOLE
For more Info, call us on
+234 8130 686 500
or
+234 8093 423 853

Share This
  • Type: Project
  • Department: Accounting
  • Project ID: ACC1516
  • Access Fee: ₦5,000 ($14)
  • Chapters: 5 Chapters
  • Pages: 65 Pages
  • Format: Microsoft Word
  • Views: 1.6K
Payment Instruction
Bank payment for Nigerians, Make a payment of ₦ 5,000 to

Bank GTBANK
gtbank
Account Name Obiaks Business Venture
Account Number 0211074565

Bitcoin: Make a payment of 0.0005 to

Bitcoin(Btc)

btc wallet
Copy to clipboard Copy text

500
Leave a comment...

    Details

    Type Project
    Department Accounting
    Project ID ACC1516
    Fee ₦5,000 ($14)
    Chapters 5 Chapters
    No of Pages 65 Pages
    Format Microsoft Word

    Related Works

    ABSTRACT Over years, Nigeria’s public funds have not been properly accounted for. This has drastically increased the cost of governance. There is no gain saying the fact that, the cost of governance in Nigeria is too high and has in no small way hindered the Nation’s development both human and infrastructural. It is also one of the reasons why... Continue Reading
    ABSTRACT  Over  years, Nigeria’s  public  funds  have not been properly  accounted for. This has drastically increased the cost of governance. There is no gain saying the fact that,  the  cost  of  governance  in  Nigeria  is  too  high  and  has  in  no  small  way hindered  the  Nation’s  development  both  human ... Continue Reading
    CHAPTER ONE INTODUCTION 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... Continue Reading
    ABSTRACT The broad objective of this study is the effect of treasury single account and fraud prevention in banking sector. To achieve this objective 30 questionnaire were administered to top official staff in Wema Bank Plc Ede and Osogbo Osun State. The data were analyzed using simple percentage and standard deviation to test the hypotheses. Base... Continue Reading
    (A CASE STUDY OF NNPC ABIA STATE) ABSTRACT This study examined The Effect of Treasury Single Account on Public Sector Management. However, treasury single account according to CBN handbook (2015;57) defines it as a public accounting system under which all government... Continue Reading
    ABSTRACT The Treasury Single Account (TSA) was recently implemented fully in the Nigerian economy by the present government in order to ensure prudence and probity in the management of financial resources. With the TSA government expects to block all loopholes and leakages of financial resources of the government and also ensure a robust financial... Continue Reading
    IN MAIDUGURI CHAPTER ONE INTRODUCTION 1.1   BACKGROUND TO THE STUDY In 2015, 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... Continue Reading
    : CASE STUDY OF NIGERIA ABSTRACT The treasury single account (TSA) was recently implemented fully in the Nigeria economy by the present government in order to ensure procedure and probably in the management of financial resources win the TSA government expects to block all... Continue Reading
    TABLE OF CONTENT Title Page Certification Dedication Acknowledgement Abstract CHAPTER ONE (1) Introduction Background of the study Statement of the problem Objective of the Study Research question Significance of the Study Limitation of the Study CHAPTER TWO (2) 2.0, Literature Review CHAPTER THREE (3): Introduction to Research Methodology... Continue Reading
    TABLE OF CONTENT Title Page Certification  Dedication  Acknowledgement Abstract CHAPTER ONE (1) Introduction Background of the study Statement of the problem Objective of the Study Research question Significance of the Study Limitation of the Study CHAPTER TWO (2) 2.0, Literature Review CHAPTER THREE (3):  Introduction to Research Methodology... Continue Reading
    Call Us
    Get this work
    whatsappWhatsApp Us