It was in June 2013 at an interview after a Monetary Policy Committee meeting, Alhaji Sanusi Lamido Sanusi, the Emir of Kano and the erstwhile Governor of the Central Bank of Nigeria (CBN) made some startling revelations to the effect that there were liquidity surpluses in the banking industry, with over N1.3 trillion sitting in banks which belong to government agencies. He said the funds were basically placed at 0% interests and the banks were lending back these monies to the same government at 13-14% interest rates. He was disturbed by this business model government was operating, describing it as “a foolish financial strategy”.
However, government commenced the Treasury Single Account (TSA) in 2012 as part of the financial reforms under the Government Financial Management Information System, (GIFMIS). The policy was not given the required bite until President Muhammadu Buhari came into power in 2015. President Buhari gave breathe to the policy with the instruction to MDAs to close all government accounts with commercial banks and move them to TSA with the CBN on or before September 15, 2015.
Since the full implementation commenced, it has been a success all the way. As at the time of this publication, over N3.2 trillion has accrued to the TSA with CBN. All MDAs including income generating ones have all fully complied.
Today, MDAs perform their legitimate functions without hassles as earlier challenges associated with mopping-up of monies of MDAs which could not comply before the deadline, have all become a thing of the past.
Similarly, tertiary institutions which were vehemently opposed to the policy, under the impression that it would make running of the schools difficult, have now come to embrace the policy. This is evident from an interview published in Vanguard, where the Vice chancellor of Bayero University Kano, Professor Yahuza Bello, was reported to be commending the implementation of TSA, saying “it has simplified the running of universities in Nigeria”.
These successes have continued irrespective of some dissenting voices from the banking sector, who have continued to oppose the policy under the guise that it would lead to job loss in the sector. Worrisome as that position would seem, but equally comforting and gladdening were the deluge of commendations received by the government for implementing policy. These have come from reputable financial managers and financial institutions both foreign and local. Of particular mention was the Managing Director and Chief Executive of Financial Institutions Training Center (FITC) Dr. Lucy Surhyel Newman, who said that the policy “will revolutionize the banking sector and put them into proper banking business, adding that “before now, we were trading.”
Clearly, implementing the TSA for just less than a year has not only exposed the mistake of the past governments in not fully implementing the policy when it was first introduced, but has also lent credence that government’s decision to embark on TSA was and still remains the best decision for the economy.
In fact, apart from helping government to block leakages, it has also made government to know at every given time how much it has. It has enthroned the culture of transparency, accountability and probity, as all the accounts belonging to all MDAs can now be viewed from one single window, thus making it easier to effectively track the flow of funds.
In spite of all these successes, it is surprising that some people are still calling on the government to review its policy on TSA, attributing it as being responsible for recent retrenchment of staff from the banking sector. Their claim that the policy has created liquidity problems for the banks, making it difficult for them to meet their obligations to the staff, is not only regrettable but a dent on the integrity of most Nigerian banks and managers who have in the last two decades grown their institutions into global brands.
While it is true that the banking sector in Nigeria profited from the obvious opacity and financial recklessness which held sway before now, it is my candid opinion that it was the politicians and unscrupulous public servants who took advantage of the situation to milk the nation dry. In doing so, they not only destroyed the foundation of core banking in Nigeria, but made most banks lazy and dependent on cheap government funds.
Therefore, instead of sponsoring the current campaign of hate and calumny against the government and its policy on TSA, the banking sector should wake up to the reality that the old times have past and a new era is here. In no distant time, with the implementation of the fiscal sustainability plan of the federal government, and states of the federation that have been co-opted, only banks which concentrate in core banking business would survive.
Undoubtedly, our nation is going through some tough economic challenges, and that banks, as in other climes, can through their activities help to re-engineer and stabilize the economy. Banks, by the nature of the financial services they provide, are catalysts to economic growth and as such germane to the nation’s economic development.
Unfortunately, these cannot be said to be the case for most banks in Nigeria, as most of their activities have left much to be desired in the past. Instead of helping to grow the SMEs and the real sectors of the economy, they constitute themselves as conduits for economic sabotage.
As true patriots, time has come for owners of banks to adjust and re-focus their attention on the real traditional banking activities – like lending to farmers, real sector, growing and wooing the deposits of ordinary people and helping to build a culture of savings among the people. It is time for the emergence of specialized banks which will concentrate in helping government address and develop certain critical aspects of the economy.
The CBN should also come with more innovative programmes that will encourage and support the banks to enable them boost their operations and concentrate on the real development of the economy.
Finally, it will be morally wrong for the government under any guise, to give-in to the call for the reversal of the TSA policy. Doing so will amount to an endorsement of the continued pauperization of the Nigerian people by a few rich and privileged people who have, over the years, continued to rape and batter the people through the instrument of government. We must learn to say ‘No’ to any form of policy somersaults irrespective of the pain and hardship such policies come with, knowing that if we persevere a little more, there will be joy and celebration in no time.
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