Treasury Single Account: Buhari's Bold Step and the Journey So Far

Treasury Single Account: Buhari's Bold Step and the Journey So Far

“Our adoption of the Treasury Single Account has resulted in the blocking of financial leakages in the public sector, making more funds available for the business of governance and ensuring the welfare of our citizens" President Muhammadu Buhari, 13th November, 2015

Treasury Single Account (TSA) is a public accounting system under which all government revenue, receipts and incomes are deposited into one single account or a network of accounts with one control. TSA is usually maintained by the country’s Central Bank and all payments are done through this account. The primary purpose of TSA is to ensure accountability of government revenue, enhance transparency and avoid misapplication of public funds. The maintenance of a Treasury Single Account helps 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 payments of government finances. Control of finances centrally ensures transparency and accountability in governance in addition to blocking of financial leakages, which end up in private pockets.   TSA is simply a strategy for government financial management of public funds and is being practiced in some countries because of the apparent benefits.  There are many advantages of TSA as outlined in the IMF 2010 paper titled "Treasury Single Account: Concept, Design, and Implementation Issues". Some of the benefits are:

1. Allows complete and timely information on government cash resources. In countries with advanced payment and settlement systems and an Integrated Financial Management Information System (IFMIS) with adequate interfaces with the banking system, this information will be available in real time. As a minimum, complete updated balances should be available daily.
2. Improves appropriation control. The TSA ensures that the Ministry of Finance has full control over budget allocations, and strengthens the authority of the budget appropriation. When separate bank accounts are maintained, the result is often a fragmented system, where funds provided for budgetary appropriations are augmented by additional cash resources that become available through various creative, often extra-budgetary, measures.
3. Improves operational control during budget execution. When the treasury has full information about cash resources, it can plan and implement budget execution in an efficient, transparent, and reliable manner. The existence of uncertainty regarding whether the treasury will have sufficient funds to finance programmed expenditures may lead to sub-optimal behavior by budget entities, such as exaggerating their estimates for cash needs or channeling expenditures through off-budget arrangements.
4. Enables efficient cash management. A TSA facilitates regular monitoring of government cash balances. It also enables higher quality cash outturn analysis to be undertaken (e.g., identifying causal factors of variances and distinguishing causal factors from random variations in cash balances).
5. Reduces bank fees and transaction costs. Reducing the number of bank accounts results in lower administrative cost for the government for maintaining these accounts, including the cost associated with bank reconciliation, and reduced banking fees.
6. Facilitates efficient payment mechanisms. A TSA ensures that there is no ambiguity regarding the volume or the location of the government funds, and makes it possible to monitor payment mechanisms precisely. It can result in substantially lower transaction costs because of economies of scale in processing payments. The establishment of a TSA is usually combined with elimination of the “float” in the banking and the payment systems, and the introduction of transparent fee and penalty structures for payment services. Many governments have achieved substantial reductions in their real cost of banking services by introducing a TSA.
7. Improves bank reconciliation and quality of fiscal data. A TSA allows for effective reconciliation between the government accounting systems and cash flow statements from the banking system. This reduces the risk of errors in reconciliation processes, and improves the timeliness and quality of the fiscal accounts.
8. Lowers liquidity reserve needs. A TSA reduces the volatility of cash flows through the treasury, thus allowing it to maintain a lower cash reserve/buffer to meet unexpected fiscal volatility.

In Nigeria, the Operation of "Consolidated Revenue Fund of the Federation" similar to TSA is a constitutional issue because Section 80(1) of 1999 Constitution as amended states "All revenues, or other money raised or received by the Federation shall be paid into and form one Consolidated Revenue Fund of the Federation". However, successive governments have continued to operate multiple accounts for the collection and spending of government revenue in total disregard to the provision of the constitution, which requires that all government revenues remitted into a single account. Nevertheless, in 2012, the Federal Government operated a pilot scheme for a single account using 217 MDAs as test case. The pilot scheme was reported to saved Nigeria about N500 billion. Despite this success, the immediate past government could not continue with the policy.  It is true that the Peoples Democratic Party (PDP)  led government  under the  former President Jonathan formulated the TSA policy. However, due to weak regulations and high level of corruption of previous government, several Ministries, Departments and Agencies (MDAs) of that era refused to conform with the TSA policy. The truth of the matter is that former  President Goodluck Jonathan  lacked the political will and audacity to force the adoption of TSA policy in all the MDAs. The present government of Muhammadu Buhari came to power  with people mandate to principally fight corruption and move the country towards economic development and poverty eradication. Right from the time he was sworn in, President Buhari did not leave  anyone in doubt that he was truly out to fight corruption as part of the change he promised Nigerians during his electioneering campaign for the presidential seat. In Africa,  President Buhari has an unblemished reputation for integrity, due process, transparency and the rule of law (Digressing; I watched one of the candidates in Niger Republic using the picture of Buhari  during electioneering campaign). Thus, the issuance of Directive to all the MDAs for compliance to Adoption of the STA was among the first steps of President Buhari's government. The directive of the government that all revenues should be remitted to TSA is in compliance with the provision of 1999 Constitution.

The insistence by Federal Government on the adoption of TSA means fiscal discipline, efficiency, and accountability, on the part of government. In fact, this  TSA policy has certainly blocked government’s revenue diversion and looting in addition to leading to the consolidation of government revenues, incomes, and receipts, it might lead to the optimal utilization of government cash resources, including creative investment of public funds in the critical development sectors of the economy.

In spite of the immense benefits of TSA, the policy is fraught with apprehension especially in the banking sector. 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 the first quarter of 2015. The mopping of public sector funds from the commercial Banks as directed by the TSA policy has some negative implications to the Banking Industry. Banks enjoyed governments' funds deposit especially fixed deposits that help them to invest and reap hefty dividends.  Some of these funds are sometimes not withdrawn for six months or even more and banks trade with them and make profits. So, once this business angle is shut, certainly the banks will bleed, so Banks employees may be apprehensive about their future. TSA might have led to the closure of about 10,000 multiple bank accounts operated by MDAs in commercial banks, banks have to wake up from their slumber. The opinion of some financial experts  is that with full implementation TSA, the era when government’s money is either lent back to government or invested in forex speculations is over. With TSA, government can easily quarantine its revenues, with intended consequences including forcing interest rates to naturally nose dive, since no serious business should be ready to borrow at such double digit rates when the economy is struggling at between 4 and 5 percent. Consequently, the TSA has forced banks to leave their comfort zone caused by dependence on government money to now become as creative and innovative as it is the case in modern economies around the world where banks have to seek private deposits through investment in the real sector of the economy. This means that while TSA will ensure accountability on one hand, but on the other hand the banks have ready to recapitalize to stay afloat.

Another apprehension to the implementation of TSA in Nigeria is the engagement of the consultants named "SystemSpecs - Remita" as facilitators of the TSA implementation at the handsomely reward of 1 % of the funds deposited into TSA. This caused uproar at the Senate in November, 2015. Senator Dino Melaye moved a motion calling on the Senate to investigate the implementation of the TSA alleging that the company implementing it had made N25 billion for “doing nothing” Melaye observed that in the course of the operations of the TSA, the Federal Government on September 15, 2015 mopped up the sum of N2.5 trillion through Remita, which charges 1 per cent of all monies passing through it, amounting to N25 billion describing the 1 per cent charges by Remita as an attempt to rip Nigerians of taxpayer’s moneys. In addition, the Senate made an observation regarding the appointment of Remita-SystemSpecs, that the appointment was a gross violation of Section 162 (1) of the 1999 Constitution and the Banks and Other Financial Institutions Act 2007. Apparently, this debated issue at the floor of the Senate made Central Bank of Nigeria to issue a circular directing banks involved to refund N3.053 billion into government treasury while  Systemspecs, the consultants were similarly requested to refund N3.812 billion they collected as fees and charges on the operation of TSA as reported by Vanguard (To be continued next week).

Readers' Comments on the Feats Achieved by Agricultural Engineers in Nigeria

Readers' Comments

It is another time for feedbacks from readers of this Column. The last 3-series article on the feats achieved by Agricultural Engineers in Nigeria solicited many comments from readers. A notable comment on the issue came from the National Chairman of Nigerian Institution of Agricultural Engineers (NIAE), a division of Nigerian Society of Engineers (NSE), Engr Babatunde Adewumi, a renowned Professor of Agricultural Engineering in Federal University of Agriculture, Abeokuta. In addition to the comments, one Engineer called my attention to an omission of the name of Engr. Prof. Peter Onwualu, fnse, the immediate Past DG, RMRDC, Abuja among the list of "Grandfather Engineers" mentioned in my concluding part of the article. Yes, it was really an omission because Prof. Onwualu has been responsible directly or indirectly for the development of several prototype agricultural machineries across many research development centres and institutions. One day, this column will focus on the breakthroughs of this giant achiever.   Before then, let me start with a backlog of the previous comments on Centre for Dryland Agriculture, Bayero University, Kano. Another thing, members can read my previous articles in my blog. www.breakthroughwithmkothman.blogspot. com, Happy reading and have a wonderful weekend.

Bayero University Kano: Actively Transforming Drylands of West African Sub-Region through Partnerships

Dear M. K. Othman

Permit me to thank the management of LEADERSHIP FRIDAY for creating this unique column to create awareness of innovations in Science and Technology. The article on "Centre for Dryland Agriculture" is a master piece. The Centre is certainly achieving one of the objectives of establishing Bayero University, Kano; solving problem of the community and nation through transformation of dryland. I however wish to give some advices to the Centre; 1) The Centre should have internal organizing structure to make its activities durable and sustainable especially the grants received from donor agencies are exhausted. 2) Core staff of the Centre need to be trained in different disciplines of dry agriculture,  3)The Centre should engage in improvement of indigenous technologies as well as coping strategy of the dry land and environment. Finally, there should be deliberate effort to develop knowledge system involving knowledge acquisition, sharing and utilization for national development.

Prof. Ibrahim B. Mohammed, ibabamohd@yahoo.co.uk   

Technological Feats of Agricultural Engineers in Nigeria

Dear M. K. Othman

Thanks for beaming your light on the achievements of Agricultural Engineers, your passion for writing, as a seasoned academic with practical approach has made the write up on your own profession - Agricultural Engineering very interesting to read and comprehend. The three set of articles are just introductory, with an inexhaustible list of achievements, Agricultural Engineers have developed prototype machines with locally available materials in all aspects of agriculture; production, processing and utilization. But, the questions yet to be answered as you rightly asked in your last article are: When shall all these innovation be a common item for the end users, especially our local farmers? When shall relevant stake holders unite to transform these inventions into realities?  Is our Government ready to play her central and critical roles? If the Buhari administration could be pragmatic to set the national priorities and implement right, I am sure we shall soon get there. We need a right thinking, pro-active, willing and right-acting Government to make the common man in Nigeria to eat the fruit of the land and be proud to be a Nigerian. Agricultural Engineers are willing partners for the mechanization of agriculture in Nigeria. let me end by thanking the management of Leadership Newspaper for creating this Column.

Engr. Prof. B. A. Adewumi fnse, fniae, adewumiba@gmail.com

Dear M. K. Othman

Thanks for writing  this article "Technological Feats of Agricultural Engineers in Nigeria". Remember though, Prof Udigbo of University of Nsukka did so much on fabrication of so many prototypes agricultural machineries produced and tested. Some of his works were even "perfected" by him at Cranfield Silsoe in United Kingdom and shipped back to Nigeria. You need to reach out to him and similar people for showcasing their modest achievements to the public arena.  Now that dollar is too strong, we have to develop these achievements/feats to the highest level so quickly to take our rightful position in the Nigerian economy and I hope your wonderful article will address it. Well done Prof.

 Engr Umar B. Bindir PhD (Cranfield) ubindir@yahoo.com

Dear M. K. Othman

Praise be to Almighty Allah for a good job Sir. I have always wondered who and when will our (Agricultural Engineers) messiah come to stand and speak up for us and with us? There is light at the end of the tunnel. Please and for God's sake don't relent because you stand as a symbol of hope for the upcoming generation of Agricultural Engineers and other professionals. Kudus to YOU Sir

Engr Muhammad Muhammad Abdulsalam,

 abdulsalammuhammadmuhammad@gmail.com

Dear Othman

It is pleasant to appreciate your articles in Leadership Friday and your blog. Kindly keep it up

Rabiu Abubakar Babura,  dankanya912@gmail.com

Dear M. K. Othman

Dr M. K. Othman’s column in the LEADERSHIP Newspaper is exposing interesting achievements recorded in field of engineering for agriculture and other profession. Of note is the exposure he gave to NCAM (National Centre for Agricultural Mechanization) located at Idofian village near Ilorin, Kwara state. The centre has been very wonderful in her effort to develop agriculture through mechanization. The centre has been leading in research and development in all fields of agriculture and engineering. It is important for readers to know that NCAM,  in performance of her functions aimed at realizing the set of objectives for which she was established, the centre has recorded tremendous achievements. Some of these achievements include design and development of:

a)    Seed treatment drum for chemically treating seeds prior to storage or planting

b)   Hand seed planter for planting such grains as maize, soya bean guinea corn, etc.

c)    Manual seed and fertilizer broadcaster

d)   Improved long handle weeding hoe. A device for weeding and hoeing

e)   Rotary hand push weeding hoe

f)    Cassava lifter for uprooting cassava tubers

g)   Cassava peeling tool

h)   Pedal operated cassava grater

i)     Tractor mounted groundnut digger

j)    Groundnut decorticator

k)   Far level parboiler

l)     Integrated palm fruit processing equipment which is capable of caring out the following unit operations, sterilization, digestion and clarifying.

m)   Maize shellers

n)    Seed dehuller

o)    Melon washer

p)   Multi-purpose thresher

q)    Okra slicer

r)    Vegetable slicer

s)    Manual yam chipping machine

t)    Motorized melon sheller

In the recent exhibition organized by the Raw Materials Research and Development Council in Abuja, NCAM stand drew the highest crowd. In fact the Minister of Science and Technology was fascinated that he climbed and operated NCAM made tractor. In addition to the achievements he presented on cassava planter, I will like to add that a two row automatic cassava planter has been developed by Engr Pro E.U Odigboh of the Department of Agricultural and Bio-resources Engineering, University of Nigeria, Nsukka.

Engr. J.C. Adama, (PhD) adamajoseph@yahoo.com

The newspaper version of the article

Technological Feats of Agricultural Engineers in Nigeria III

Technological Feats of Agricultural Engineers in Nigeria III

Weeding operation is one of the most tedious operation compared to other farm operations. This is why weeding is unattractive to many people especially the youths because of drudgery. Agricultural Engineers have made tremendous effort in developing animal drawn mechanical weeders. Two examples are suffice; IAR  Animal Drawn Straddle Row Weeder and EMCOT Rotary Weeder with  capacities of weeding  a quarter of hectare per an hour each. Obviously, the target of this weeding technology is small and medium scales farmers who constitute more than 80% of the farming population.

Harvest is the proceeding operation after weeding. Harvest of farm produce is equally important and tedious when done manually. Inefficient and untimely harvest can result to produce loss to as much as 30 to 45 %. Harvest is a high labour operation because of the need to do it timely. The development of crop harvesters have brought about a remarkable reduction in the drudgery, labour requirement and production cost of crops. In Nigeria, Agricultural Engineers have developed harvesters for all crops; cereal, legumes, fruits and tubers, respectively.  Examples of this feat are scattered in some Universities, Polytechnics, Research centres and few local fabricators across the nation. In Federal University of Technology, Akure, Prof. R. O. Akinbamowo and his colleagues designed and fabricated a tractor – mounted harvester for cocoyam using locally available materials. Field tests were conducted to evaluate the performance of the machine. The overall performance of the machine was the successfully harvesting of mass of tubers with negligible number of tuber damages. Akinbamowo's  was published by Australian Journal of Agricultural Engineering of 2011 (vol. 2 no. 3). Another outstanding work was that of Dr. A. O. Ojomo, M. O. Ale and O. G. Olajide of Rufus Giwa Polytechnic Owo, who developed a cowpea harvester. The harvester was designed, constructed and evaluated for its performance. The machine was fabricated with high carbon steel with an output capacity of 120kg/h. The overall performance of the harvester exhibited the highest functional efficiency of 93.75%, quality performance efficiency of 81.21%, field loss of 3.4% and shattered loss of 6.66%. The harvester was found to be statically and dynamically stable and thus was able to withstand vibration. This innovation was similarly published in Vol. 5 no. 10 of Asian Journal of Engineering and Applied Sciences.

Engineering is a global profession, solutions are globally sought to address local problems. Thus, the solution to harvest of oil palm fruits was sought from Germany-based manufacturers C. Woermann Nig. Limited who used the relevant engineering and agronomic data of oil  palms for the successful development of adjustable harvester for mechanized Harvesting of Palm Oil in Nigeria. The problem of palm oil harvesting is enormous is best captured by Mr. Samuel Fadare,  a researcher at Self-Help and Rural Development Association (SHERDA), Niger Delta, Nigeria. He stated “I was involved in carrying out PIND’s palm oil scoping study, and we discovered that one of the major constraints of oil palm industry in Nigeria is harvesting of palm trees’ fresh-fruit bunches (FFB), 50% of FFB are wasted for want of climbers and the cost involved. That’s why this technology is important, because it can reduce the drudgery involved in harvesting. Presently, all our processing and milling equipment are underutilized because of the tough period; right now, the mills are at 40% in-store capacity. It’s not that we don’t have FFB, but getting them harvested quickly and processed and in store is a problem”. This is why the introduction of oil palm harvester received tremendous applause from the stakeholders. The demonstration of the Nigerian initiative, German manufactured harvester was done at the National Institute for Oil Palm Research (NIFOR) in Benin City, Edo State, on January 28th, 2014. The occasion  saw the result of the linkages between Foundation for Partnership Initiatives in the Niger Delta (PIND), German agro-technology firm and palm oil sector stakeholders to improve the efficiency of not just harvesting of palm fruits, but of the palm oil sector as a whole. The event was witnessed by 187 participants from various stakeholders.

Threshing operation is followed after harvest. There are several threshers of most of agricultural crops produced in all the Agro-geological zones of Nigeria. These threshers are designed and fabricated by Agricultural Engineers for the use of Nigerian farmers and elsewhere. The most recent feat in threshing technology is achieved by Institute for Agricultural Research (IAR) based in Ahmadu Bello University, Zaria. The breakthrough of IAR is the transformation of its complex and low capacity Multi-Crop Thresher to simple, robust, efficient and high capacity machine. The new prototype machine specifically designed to thresh sorghum, millet and soybean can also shell maize making it more versatile and cost effective for farmers and hire service operators. The machine performance in terms of output capacity, threshing and cleaning efficiencies are 410 kg/h, 99.6 % and 98.4 % for sorghum; 472 kg/h, 99.3 % and 94.9 % for millet; and 200 kg/h, 100 % and 89 % for soybean, respectively. This machine is unique when compared with other available machines that can only thresh effectively one or maximum of two crops with lots of grain damage and waste. The losses due to visible grain damage and scatter loss for this machine are 3 % and 4.2 % for sorghum; 0.01 % and 10.5 % for millet; and 0.01% and 4.2 % for soybean, respectively. Development is still ongoing to improve the machine performance and also include other crops such as wheat and rice.

One can continue to mention innovations and breakthroughs achieved by Agricultural Engineers in the last four decades without exhaustive them. However, there are few other technologies developed by Agricultural Engineers and they are equally important to humanity that need to be mentioned in this article. one of them is Manually operated  Duplex Piston Pump developed by Engr Mansir Abubakar of Ahmadu Bello University, Zaria. A manually operated duplex piston pump has been constructed from locally available materials. The pump is operated by a single individual and could discharge up to 20liter/minute of water from a suction head of up to 2.5m to a delivery head of 1.5 m. The pump is gear driven through a handle. The driven gear drives a crank mechanism that ensures that when one piston is sucking the other delivers water. The two suction pipes from the cylinders are joined to a common pipe that goes to the Well. Similarly, the two delivery pipes are joined to a common delivery pipe  for discharge.  Hence there is a relatively a smooth flow of water from the pumps as there is a continuous flow from each revolution of the lever. In its present state the pump could be operated by  a person above 15 years.  With little modification in the drive mechanism  it  can be  operated  by children between the ages of 8 to 15 years. There was equally  another innovation developed by the same Engineer; Engr M. S. Abubakar; it is "One-liter Squat Flush Toilet" . This is a toilet that needs just about a liter of water to flush down the solid waste of an adult. A  60 liter water tank supported   at an elevation ensures gravity flow of water through   a metering  mechanism to a one liter container. It uses self weight of users to open or close a toilet –collecting mechanism. It is simply operated by pressing down a pedal with a leg (or 2 legs) when the user is in a squatting  position.  The pressed pedals actuate a mechanism which opens a sealed inlet  for the stool. After the user has finished easing himself, all he needs to do is to pull a rope which will deliver one liter of water over the  stool down a slanted evacuation pipe. By lifting his leg from the pedal the user automatically releases the mechanism which will now close the sealed inlet for the stool and thereby blocking    any odours coming from the evacuation pipe. The evacuation pipe is connected to longer pipes which empty their contents in the septic tank by gravity flow. The toilet is suitable for public uses where the distance from the toilet to the septic tank is not more than 5m.

 These are few of the achievements recorded and it is evident that Nigeria is blessed with human resources. Most of these achievements were made by young engineers, some of them as trainees or "baby engineers". I have deliberately refused to mention the feats achieved by our well experienced Engineers; "grandfather" engineers such as Profs. Makanjola, Odigbo, Lasisi, Lucas, Igbeka, Oni, Talabi, Faborode, Adewumi, Abubakar, Ajayi, Adekoya, Drs. Bindir, Musa, Engr Azogu and many others too numerous to mention. These are Engineers of international refutes and thank God, they are still alive; perhaps retired but not tired. The question is "despite these achievements, significant number of Nigerians are not aware of these achievements and very few users are accessible to such technologies, why?". The answer to this question can be searched by the stakeholders with the active facilitation of our Honorable Ministers of Agriculture, Science and Technology and Water Resources. For us to benefit from the mantra of change, it is important to create effective linkage between innovators and users. Honourable Ministers, the ball is court.  

Newspaper version of the article