Nigeria’s TSA stands out amid IMF, World Bank, EU commendation

In a continent often criticised for weak fiscal institutions and opaque governance structures, Nigeria’s Treasury Single Account (TSA) stands out as a bold and transformative fiscal reform. Designed to consolidate government revenues and promote transparency, the TSA has not only reshaped Nigeria’s public finance architecture but also garnered international acclaim as a model worthy of emulation.

Established fully in 2015 as a central platform for managing government cash flows, the TSA was built on the principle of unity of treasury. This approach replaced the previously disjointed system where Ministries, Departments and Agencies (MDAs) operated thousands of independent bank accounts.

The pre-TSA landscape was characterised by inefficiency, revenue leakages, and fiscal ambiguity. Government funds were scattered across commercial banks, making it difficult to ascertain the country’s true financial position. This opacity enabled corruption to thrive, eroded trust in public institutions, and weakened Nigeria’s ability to manage its economy effectively.

The TSA addressed this challenge by bringing all government receipts and payments under a single, coordinated structure managed by the CBN. This consolidation improved cash management, minimised idle balances, and eliminated the need for the government to borrow while funds sat unused elsewhere. It also enhanced fiscal forecasting, promoted budget discipline, and aligned Nigeria’s cash management practices with the constitutional requirement that all revenues be remitted into the Consolidated Revenue Fund.

Global reform benchmark
The reform’s success did not go unnoticed. International financial institutions such as the International Monetary Fund (IMF) and the World Bank have consistently cited Nigeria’s TSA as a textbook example of how sound fiscal policies can transform public sector governance. The IMF has identified TSA implementation as a critical reform for countries grappling with fragmented banking arrangements.

It notes that, when complemented by active cash planning, the TSA reduces borrowing needs and improves liquidity forecasting, both of which are essential for fiscal stability in emerging economies. 

The World Bank, in its appraisal, described the Nigerian TSA as a milestone in the journey toward fiscal transparency, applauding the country’s resolute implementation of a reform that many find politically sensitive. The European Union (EU), Nigeria’s largest trade partner and a key advocate for governance reforms, has also consistently commended the TSA initiative for its role in curbing corruption, enhancing fiscal transparency, and optimising cash management across federal agencies.

More than a fiscal tool, the TSA has had symbolic significance as it demonstrated that reform is possible in a complex governance environment like Nigeria’s. It showed that even long-entrenched inefficiencies could be overcome with the right mix of political will, institutional coordination, and a solid technological foundation. What makes Nigeria’s experience particularly unique is the use of homegrown technology, Remita. Originally developed by SystemSpecs and now operating as Remita Payment Services Limited, and now steadily expanding its footprint across Africa. 

According to the company’s Managing Director, ‘Deremi Atanda, “We have become an ecosystem of rails, products and robust services. Layering all of that with the many different customers we’ve had, typically every year we process more than N60 trillion in transactions in Nigerian naira. And this can only grow, especially as we begin to think of a vibrant Pan-African expansion. We are at the fringe of that.” This continental ambition not only affirms the credibility of Nigeria’s homegrown financial technology but also reflects the transformative potential of aligning public sector reforms with private sector innovation.

The impact of the TSA has extended beyond Nigeria’s borders. Its success inspired other African countries to seek Nigeria’s expertise in replicating similar models. The Republic of The Gambia, for instance, initiated a formal partnership with Nigeria in 2020 to understudy the TSA, signing a Memorandum of Understanding to support its implementation process.

The Gambian authorities openly acknowledged Nigeria’s leadership in public financial management within the ECOWAS region. Similarly, officials from Sierra Leone have visited Nigeria to examine the framework and operational mechanisms of the TSA, recognising its potential to support reform in their respective jurisdictions.

Building upon the recognised successes and international acclaim of the TSA, it is equally important to address the inherent challenges associated with its optimal implementation. While the policy and its technological framework have demonstrably reduced financial leakages and enhanced transparency, its sustained effectiveness and long-term viability depend on maintaining its integrity.

The government must approach with sincerity, the prevailing concerns that TSA alone cannot drive meaningful change unless corrupt officials are held accountable. Failure to address this issue poses a significant threat to the value and credibility of the policy.
Moreover, reconciliation challenges remain a critical hurdle for the TSA’s effectiveness. Timely reconciliation of MDAs accounts is essential for accurate fiscal data and improved bank reconciliation.

However, technical limitations and misunderstandings of the system continue to impede progress. To address this, proper procedures and targeted capacity-building initiatives are necessary. The Federal Government should also conduct a thorough reconciliation with Remita to assess the policy’s full impact, identify areas for improvement, and develop strategies to enhance efficiency

Sustainable fiscal future
Nigeria’s recent repayment of the $3.4 billion IMF loan secured during the pandemic is a strong indicator of improving fiscal health. This development, under President Tinubu, highlights how reforms like the TSA have strengthened public finance management. By consolidating government revenues and enhancing transparency, the TSA has made it easier to account for funds, reduce waste, and improve debt management, laying the groundwork for achievements such as this. The broader implications of the TSA for Nigeria’s economy cannot be overstated.

At a time when governments around the world are being called upon to do more with less, Nigeria’s TSA journey offers a compelling lesson in how reforms, even in challenging environments, can yield transformational results when driven by purpose, technology and political resolve. 

Without a doubt, the TSA remains not only a cornerstone of Nigeria’s fiscal policy but also a symbol of what determined reform can achieve. For Nigeria, preserving and improving the TSA is not merely a matter of economic strategy. It is a critical pathway to sustainable governance and long-term development.
Okino, a public analyst, wrote from Abuja.

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