People & Money

Finance Minister Zainab Usman Says TSA Saving Nigeria N45 Billion Monthly

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, on Tuesday disclosed that the federal government’s implementation of the Treasury Single Account, TSA, has brought tremendous benefits to Nigeria, chief among which is the N45 billion being saved every month from what would have been interest payments by MDAs. MDAs refers to Ministries, Departments and Agencies of government.

During the signing of a Memorandum of Understanding, MoU, on the TSA between Nigeria and the Government of The Gambia, in Abuja, Ahmed said, “Implementation of TSA has benefited Nigeria immensely. Among other verifiable benefits, we can now easily determine our aggregate cash balance which is critical for managing public finances at a time of acute fiscal constraints.

“On the monetary policy side, we have better control over the money supply and therefore able rein in inflation and undue pressure on the Naira. Our foreign reserve position has also recorded appreciable improvement through the consolidation of Federal Government foreign currency earnings under the TSA.”

Also Read: World Bank’s New Chief Economist Says Nigeria is in a “Terrible Shape”, Oil Income Falls by 80%

She went on to state that the co-operation between Nigeria and the Gambia would avail the Ministry of Finance and Economic Affairs of The Gambia of the vast knowledge, experience, and technical expertise that Nigeria has gained in the past 15 years of implementing TSA in particular and other Public Financial Management (PFM) reforms, in general.

“By so doing, The Gambia is properly guided as it implements its own TSA. The co-operation will enable The Gambia to leverage on the experience of Nigeria to build on our strengths while avoiding our mistakes,” Ahmed said.

She advised the Gambian government to demonstrate proper political will in the implementation of the TSA, pointing out that as with all governance reforms, TSA would require strong political support to deal with the heavy lifting that comes with PFM reforms.

According to the Minister, “Don’t embark on this journey if you are not confident that you have the buy-in of your topmost political leadership. “It is the most potent antidote against the several headwinds that will try to undermine and derail your reform effort.

“Next in line is to assemble the right team of competent and committed reformers with in-depth knowledge of PFM. Upon that team will rest the responsibility of translating policy into action and by so doing, ensuring that your TSA expectations are met.

“There are more factors at play. You need, for instance, the financial resources and an enabling environment to drive reforms.

“The importance of synergy between the fiscal and monetary authorities cannot be over-emphasized. Equally important is the co-operation of other stakeholders: the parliament; the ministries, departments, and agencies of government; the banks, and service providers.

Also Read: Nigeria’s Dollar Trap: How it Impacts Foreign Investors and Nigerian Jobs

Nigeria is known for generously sharing its oil income with other African states but not for exporting models of prudent fiscal management. Celebrating the success of the TSA would seem pointless at a time of extreme economic vulnerability brought about by prior poor fiscal and monetary policy choices and the economic consequences of the novel coronavirus pandemic.

Not many Nigerians would even agree that the TSA is helping Nigeria manage its diminished revenue better after the government had favoured policies which repeal investment and weaken growth. Perception of corruption in government has hardly improved.

Ghana, with a population 7 times smaller than Nigeria’s, in the first half of 2020 attracted double Nigeria’s foreign investment. In 2019, Ghana attracted $3.3 billion in foreign direct investment while Nigeria attracted only $2.2 billion.

While speaking on behalf of the delegation, the Permanent Secretary, Ministry of Finance of The Gambia, Ms. Ada Gaye expressed the determination of her country to implement the TSA.

“The Gambia wants to efficiently manage its funds; the fragmentation of accounting systems in The Gambia is huge. It is, therefore, noteworthy for The Gambia to adopt TSA.

“Nigeria is the big brother while The Gambia is the small brother. We are happy to cement this brotherly love,” she said.

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