Home Business News 8 Key Facts about the Treasury Single Account (TSA) policy

8 Key Facts about the Treasury Single Account (TSA) policy

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With the general elections now over, it seems a good time to reflect on one of the major success stories of the current government which affects every Nigerian one way or the other – the Treasury Single Account (TSA) initiative.

The Federal Government’s TSA continues to be celebrated as one of the most significant initiatives undertaken by any government in Nigeria to promote accountability, transparency and fight corruption in the management of public funds.

According to the current administration, TSA implementation saves the government a whopping ₦24.7 billion monthly and greatly enhances government revenue collection.

Despite its achievements, the policy has met with mixed reactions from the public, partly due to a lack of knowledge on the subject, poor stakeholder engagement, and inadequate sensitization by the government.

Below are facts to further help public understanding of this key initiative:

1. History of the TSA

The Treasury Single Account is a policy recommended by the World Bank for the effective management of national cash assets by ensuring that all government payments and revenue collections are managed through a single bank account or a set of linked accounts, which promotes accountability and transparency in the management of public funds.

In 2011, the Federal Government (under President Goodluck Jonathan) mandated the commencement of the TSA initiative in Nigeria. A pilot commenced in 2012 on TSA payments (outbound transactions only) with just over 100 Ministries Departments and Agencies (MDAs). This was later extended to additional MDAs.

In 2015, President Muhammad Buhari’s administration mandated the full and comprehensive implementation of TSA across all Federal Government MDAs without any exception.

2. The Current Cost of Transactions into the TSA

The Central Bank of Nigeria (CBN) in a circular of November 2018, announced the new price regime for Federal Government’s TSA thus:

Any payment to the Federal Government at any commercial bank, through Internet Banking, Mobile Wallet, and Agents would attract a flat fee of N150 (Plus VAT of ₦7.50K) irrespective of the amount being paid. (Just like you pay a flat fee of N65 for ATM withdrawal irrespective of the amount withdrawn)·

Payers who choose to make payment with a debit card will pay the same flat fee of ₦150 plus 0.75% of the amount being paid, subject to a maximum of ₦1,200 per transaction.

3. Who Bears the Cost? 

The Federal Government bore the cost of all TSA payment and collection transactions since inception. However, in November 2018 the government decided to transfer the cost of revenue collections to payers, whilst the government continues to bear the cost of payments transactions.

4. Difference Between the Current Pricing Regime and the Previous One?

In the previous regime, the government took on the responsibility for payment and revenue transaction costs. In the current regime, the government bears the cost of transactions made to its vendors, but for payments to government (Government Collections), the payer settles the transaction charge.

5. Payment Options Currently Available for Transactions into the TSA

Payers are able to easily generate invoices for transactions online and make payment to the government through various channels including branches of all Commercial banks, select microfinance banks, Internet banking portals, POS terminal, cards on Web, Mobile Wallets, USSD and collection agents.

6. Who Government Pays Transaction Processing Fees to

The Government is unable to provide the required infrastructure on its own and has therefore put in place an ecosystem that includes a multitude of certified and regulated service providers – Central Bank of Nigeria (CBN), commercial banks, card schemes, mobile money operators, agents and licensed payment solutions service providers (PSSPs). to make FGN payments and collection transactions happen.

The fees charged for FGN TSA transactions go towards remunerating this large group of service providers, to compensate them for their investment and ongoing service delivery.

7. How to Know How Much to Pay for any Government Service

A payer can easily go to the website of any MDA to identify the item to be paid for and generate an electronic invoice or visit the concerned MDA to obtain an invoice which clearly indicates the amount to be paid for the relevant item/ service.

Each invoice carries a unique reference for easy tracking and accounting – this is popularly known as the RRR. No citizen is expected to make any payment to Government without an RRR number.

8. How Receipts of Payments are Obtained

Every TSA payment is evidenced by an automatically generated electronic receipt provided to the payer at the point of the transaction by the bank or sent to the payer’s registered email address. It is very important for a payer not to leave a payment transaction point without obtaining a payment receipt that bears the RRR number of the invoice that led to the payment.

This is what will be checked by the MDA before providing service. It is also one of the checks and balances introduced into the TSA payment process to strengthen accountability and transparency.

1 COMMENT

  1. The treasury single account is a very good initiative to Nigeria economy but it would have been better if every sector or parastatal keeps it proper management that was meant for the initiative. so I’ll like the federal government to check and audit it account in all the sectors of the economy

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