CBN To Banks: Move FG Funds To TSA Or Risk Sanction | Independent Newspapers Limited
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CBN To Banks: Move FG Funds To TSA Or Risk Sanction

Posted: Sep 9, 2015 at 12:55 am   /   by   /   comments (1)

By Sola Alabadan,


Ahead of the September 15, 2015 deadline given to all Federal Ministries, Department and Agencies (MDAs) for transfer of their funds to the Single Treasury Account (TSA) maintained at the Central Bank of Nigeria (CBN), the apex bank, on Tuesday, directed banks to ensure compliance or face severe sanctions.

In a circular with reference No. BSD/DIR/GEN/LAB/08/048, dated September 7, 2015, entitled: “Deadline for transfer of Federal Government funds to Treasury Single Account,” signed by Mrs. Tokunbo Martins, its Director of Banking Supervision, the CBN warned that it would “impose severe sanctions on any bank that fails to comply on or before the deadline of September 15, 2015.”

President Muhammadu Buhari had on Monday set a deadline of September 15 for MDAs to commence the use of the approved government bank accounts for payments as part of efforts to ensure transparency and stamp out corruption, following observations that some officials were foot dragging.

Femi Adesina, the President’s spokesman, had explained that all receipts due to the government or its agencies must be paid into the TSA maintained by the CBN and linked to other government bank accounts, before the deadline.

In an article entitled: “100 Days After: The Seven Game Changers Nigerians Must Come To Terms With (see article on pages 17 and 18),” Olufemi Awoyemi, chief executive of Proshare Nigeria Limited agreed with other analysts that the Federal Government’s revenue would increase, as MDAs move their accounts, including those offshore to the CBN.

For him, “other consequential impacts will be the enhanced leverage this provides for the CBN to manage interest rates and announce a significant reduction in its Cash Reserve Ratio (CRR) requirement on private deposits as well as enhance the fortunes of good and well-managed banks not built around public sector funds who would not suffer immediate liquidity challenges.”

Awoyemi recalled that implementation of the TSA policy,  “a core reform requirement in the concluding observations of Nigeria’s 2013 and 2014 IMF’s Article IV Consultations, was officially introduced last year by former President Goodluck Jonathan to block revenue generation leakages in phases, with about 42 MDAs in the first phase.”

A TSA is a unified structure of government bank accounts or a set of linked bank accounts through which the government transacts all its receipts and payments and allows the administration to know its cash position at all times.

Even agencies that are fully or partially self-funding, must maintain a sub-accounts at the CBN, linked to TSA, just as the accounting system would be configured to allow them access the funds, subject to their approved budgets.

Listed among affected MDAs are cash cows such as the Nigerian National Petroleum Corporation (NNPC), Federal Inland Revenue Service (FIRS), Nigerian Customs Service (NCS), Department of Petroleum Resources (DPR), Nigerian Ports Authority (NPA),  Nigerian Communications Commission (NCC), Federal Airport Authority of Nigeria (FAAN), Nigerian Civil Aviation Authority (NCAA), Nigerian Maritime Administration and Safety Agency (NIMASA), CBN, Securities and Exchange Commission (SEC), Corporate Affairs Commission (CAC), Nigeria Deposit Insurance Corporation (NDIC) and Nigerian Shippers Council (NSC).

Already, Ibrahim Muazu,  Spokesman and Director, Corporate Communications, at the CBN, quoted was saying that “many MDAs have complied and it is going to have positive impact on the economy.”

Comments (1)

  • Sep 9, 2015 at 1:59 pm Adetunji OGUNYEMI

    This directive is good, expedient and proper. It falls perfectly in line with the requirements of section 162 of the Constitution of the Federal Republic, 1999(As Amended) on the keeping of the proceeds of the Federation Account. Only one single account for the Federation and not multiple accounts which breed fraud and lack of transparency.

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