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It’s nearly a year of pains for the Federal University of Agriculture, Abeokuta (FUNAAB) since its $2 million grant from the Bill and Melinda Gates Funded Cassava Adding Value Project (CAVA) was trapped in the Treasury Single Account (TSA), the pool account for all government’s revenues.
The institution has been haggling with the Office of the Accountant-General of the Federation (OAGF) on how to resolve the quagmire while the projects the funds were meant to be channelled are suffering.
The FUNAAB Vice-Chancellor, Prof. Olusola Oyewole admitted that the TSA is impeding research in universities as institutions cannot access their grants on time, while several funds from donor agencies were diverted to countries with less transactions difficulties.
“You can imagine the shock that our universities have, waking up one day to find out that our funds have been moved away from the commercial banks to an account that we can’t even identify,” he lamented.
But the OAGF seems helpless with the situation, insisting that the policy must take its course despite the implications on the institution.
The CAVA funds, The Nation further leant, had finally been lodged at the Standard Chartered Bank in London, by the Central Bank of Nigeria (CBN) on behalf of FUNAAB, while the institution said it was still trying to access the fund, as at press time.
Welcome to TSA, Nigeria’s new accountability and most feared sheriff in town.
For decades, many emerging markets and low-income countries have fragmented systems for handling government’s receipts and payments. In these countries, the ministries of finance/treasury lack a unified view and centralised control over government’s cash resources. The cash lies idle for months in different bank accounts held by spending agencies while the government continues to borrow to execute its budget.
That was the case with Nigeria until September 2015 when the Federal Government began the full implementation of TSA. And since then, the policy has come with pains, gains and controversies depending on which side of the divide it was viewed.
The TSA is a bank account or a set of linked bank accounts through which the government transacts all its receipts and payments and gets a consolidated view of its cash position at any given time.
But for commercial banks which had for years relied on cheap government deposits to post huge profits, universities that secure foreign grants for research, and Ministries, Departments and Agencies (MDAs) which have to suffer delays in getting transactions, the TSA remains a nightmare.
The lenders have since the full implementation of the policy began, lost huge revenues and deposits that threatened the continued existence of many mid-tier banks.
Source: The Nation