Treasury Single Account Nigeria: A Decade of Fiscal Transformation

In August 2015, Nigeria implemented a financial reform that would fundamentally alter its public finance management landscape. The full enforcement of the Treasury Single Account (TSA) under President Muhammadu Buhari’s administration was not a routine policy adjustment. It was a structural intervention designed to correct decades of fiscal indiscipline, constitutional non-compliance, and institutionalized opacity. A decade later, the evidence of its impact provides a definitive case study in how political will, coupled with technical execution, can reform a nation’s fiscal architecture.

Powered by the indigenous fintech firm Remita, the TSA’s initial impact was swift and dramatic. Its implementation immediately consolidated over ₦3 trillion ($7.8 billion at the time) in idle government funds from commercial banks into the Central Bank of Nigeria (CBN). This was not about discovering lost money; it was about making visible vast sums that existed but were outside the treasury’s control, simultaneously earning no interest for the federation and forcing the government to borrow at high rates to fund operations. This paradoxical waste alone justified the reform.

However, the true measure of the TSA’s legacy over ten years extends far beyond that initial recovery. It lies in the sustained transformation of how the Nigerian government manages public resources, enforces accountability, and ensures transparency. This article provides a comprehensive, evidence-based examination of what a decade of the TSA has meant for Nigeria’s fiscal structure, its ongoing challenges, and its future prospects.

Key Points: The TSA’s Decade of Impact

• Constitutional Restoration: The TSA corrected a fundamental breach of Section 80 of Nigeria’s 1999 Constitution, which mandates all government revenue be paid into the Consolidated Revenue Fund.
• Elimination of the “Debt Paradox”: By centralizing funds, Nigeria stopped the practice of borrowing from commercial banks at high interest while its own money sat idle in those same banks, saving an average of ₦45 billion monthly in interest payments.
• Massive Financial Recovery: Beyond the initial ₦3 trillion, over ₦10 trillion had been processed through the TSA by mid-2019, revealing the scale of previously unconsolidated revenue streams.
• Eradication of Wasteful Leakages: The consolidation eliminated over ₦24 billion monthly in bank charges and account maintenance fees across thousands of obsolete accounts.
• Institutional Behavior Change: Ministries, Departments, and Agencies (MDAs) dramatically increased remittances to the federation account simply because the system made revenue concealment impossible.
• Crisis Stabilization Tool: During the 2016 economic recession, the TSA provided critical liquidity visibility, enabling more rational resource allocation and reducing pressure for emergency external borrowing.
• Indigenous Tech Triumph: The system’s backbone, provided by Nigerian fintech Remita, demonstrated that homegrown solutions can power mission-critical national infrastructure.

Background: The Fiscal Chaos Pre-2015

The “Orchestrated Dysfunction” of a Fragmented System

To fully appreciate the TSA’s impact, one must understand the systemic dysfunction it replaced. Prior to 2015, Nigeria’s public financial management system was characterized by what can only be described as orchestrated opacity. The Federal Government operated through a labyrinth of over 17,000 separate bank accounts scattered across commercial banks nationwide.

Each Ministry, Department, and Agency (MDA) maintained multiple accounts without central coordination or oversight from the treasury. This created a “financial maze” where the government’s true cash position was unknowable at any given moment. Treasury officials had no consolidated view of assets, making effective cash planning and budget execution impossible. This opacity was not an accident; it was a structural feature that enabled a range of perverse outcomes.

The Constitutional and Economic Paradoxes

The fragmentation directly violated Section 80 of the 1999 Constitution, which requires all government revenue to be paid into the Consolidated Revenue Fund. With funds disappearing into hundreds of institutional “black holes,” this constitutional mandate was routinely ignored. The subsequent requirement for parliamentary appropriation became a hollow form, as billions flowed through channels invisible to legislative scrutiny.

Economically, this created a monumental “debt paradox.” The government routinely borrowed from commercial banks at high interest rates to fund cash shortfalls, while identical sums of idle government revenue sat in those very same banks, earning zero interest for the state. This was a direct transfer of public wealth to private banks—a massive fiscal hemorrhage. Furthermore, the government incurred billions in monthly bank charges and account maintenance fees for maintaining this pointless web of accounts.

An Engine for Corruption and Inefficiency

The fragmented account structure was a primary enabler of large-scale corruption. With thousands of unknown and unmonitored accounts, MDAs could easily:

• Under-remit collected revenues.
• Withhold deducted taxes (like PAYE) from staff salaries.
• Warehouse funds in commercial banks to generate private interest (“round-tripping”).
• Divert public funds with minimal risk of detection.

The system was not merely inefficient; it was structurally designed to facilitate the misappropriation of public funds and undermine fiscal discipline at every level.

Analysis: Measuring a Decade of Impact

Immediate Financial Windfall and Constitutional Correction

The TSA’s implementation, using the Remita Revenue and Payment Management Technology as its operational backbone, was a technical and political masterstroke. By mandating that all federal government revenue be paid into a single account at the CBN, it instantly:

1. Restored Constitutional Order: Compliance with Section 80 CFRN became operational reality.
2. Recovered Idle Funds: The initial ₦3 trillion ($7.8 billion) consolidation was a dramatic demonstration of the scale of hidden assets.
3. Eliminated the Debt Paradox: The government no longer needed to borrow its own money from banks, as it had real-time visibility and control over all cash.

Sustained Fiscal Discipline and Savings

The initial recovery was a one-time event. The enduring value is in the sustained fiscal discipline the system enforces. According to former Minister of Finance, Budget and National Planning, Mrs. Zainab Shamsuna Ahmed, the TSA generated average monthly savings of ₦45 billion in interest payments by eliminating the need for expensive Ways and Means Advances (WMA) from the CBN and commercial borrowing. This represents an annual saving of over ₦540 billion.

Furthermore, the consolidation:

• Stopped the monthly leakage of over ₦24 billion in bank charges.
• Saved over $125 million monthly in interest on Ways and Means Advances due to improved cash visibility.
• Improved monetary policy control by giving the CBN a clearer view of government cash flows, aiding inflation and exchange rate management.
• Boosted foreign reserve positions by consolidating all foreign currency revenues under central oversight.

Transformation of Institutional Behavior

Perhaps the most profound, yet least quantifiable, impact is the behavioral change it forced upon MDAs. Agencies that historically remitted negligible amounts to the federation account were compelled to remit all revenues. Post-TSA data showed a significant and sustained increase in remittances from most MDAs. The system’s transparency made hiding revenue impossible, shifting the default behavior from concealment to compliance. This cultural shift within the bureaucracy is a critical, long-term benefit of the reform.

The TSA as an Economic Stabilization Tool

During the 2016 recession, the TSA proved its worth as more than an accounting mechanism. The government’s real-time visibility into its cash position allowed for more prudent and rational allocation of scarce resources. This helped stabilize the economy by preventing panic-driven, high-cost external borrowing and enabling better-managed fiscal responses to the downturn. It functioned as an essential tool for fiscal risk management during a crisis.

Global Context and Comparative Advantage

While Treasury Single Accounts are a standard feature of sound public financial management (PFM) in many developed and emerging economies (e.g., the UK’s Consolidated Fund, New Zealand’s Treasury), Nigeria’s implementation was notable for its speed and the use of a domestic technology platform. The success of the Remita-powered system challenges the narrative that complex national financial infrastructure must rely on expensive foreign consultants and software. It provides a model for other developing nations seeking to reform fragmented public financial systems.

Practical Advice: Safeguarding and Strengthening the TSA

As the TSA enters its second decade, its foundational success is undeniable. However, its long-term integrity requires proactive stewardship. The following advice is directed at policymakers, legislators, civil society, and international partners.

For Policymakers and the Executive

• Conduct a Comprehensive Operational Review: Undertake a full audit of the TSA’s operational, administrative, and technological processes. Identify bottlenecks, security gaps, and areas for optimization to ensure the system evolves with technological advancements and changing fiscal needs.
• Anchor the TSA in Robust, Insulating Legislation: The current framework relies heavily on executive directives. To protect it from political interference and ensure continuity across administrations, enact a dedicated Treasury Single Account Act. This law should clearly define coverage, enforcement mechanisms, and penalties for non-compliance, making the TSA a permanent feature of Nigeria’s constitutional and legal financial architecture.
• Resist Pressure to Re-Fragment: Vigorously oppose any proposals to allow MDAs to maintain separate operating accounts outside the TSA framework. Any exceptions must be strictly defined, time-bound, and subject to intense parliamentary and public scrutiny.
• Expand Full Coverage: Aggressively pursue the inclusion of all remaining federal government revenues, including those from some autonomous agencies and foreign currency inflows, into the TSA. The current leakage of funds outside the Central Bank’s umbrella must be closed.
• Invest in System Upgrades and Cybersecurity: The Remita platform must be continuously upgraded to handle increasing transaction volumes and sophisticated cyber threats. A national priority should be ensuring the system’s resilience, scalability, and security against financial fraud.

For the Legislature (National Assembly)

• Exercise Vigorous Oversight: Move beyond mere approval of budget allocations. Use the TSA’s transparency to conduct forensic audits of MDA remittances. Question why any agency would have funds outside the system. Hold quarterly public hearings on TSA performance and compliance.
• Link Appropriation to TSA Data: Base budget debates and approvals on the actual, consolidated revenue data provided by the TSA. This moves budget discussions from speculative projections to evidence-based planning.
• Fast-Track the Legal Framework: Prioritize the passage of the TSA Act to provide the ironclad legal foundation the system needs to survive political cycles.

For Civil Society and the Media

• Continuous Public Education: Demystify the TSA for citizens. Explain how it affects service delivery, inflation, and national debt. Use TSA data to track government revenue and hold officials accountable for spending.
• Monitor Implementation Gaps: Investigate and report on any attempts to circumvent the TSA, non-remittance by MDAs, or weaknesses in the system. Act as a watchdog for the public interest.
• Advocate for Full Disclosure: Push for the real-time public publication of TSA receipts and balances (with appropriate security redactions). Transparency is only valuable if it is accessible.

For International Development Partners

• Align Support with the TSA Framework: Channel budget support and sectoral investments in ways that reinforce, not circumvent, the TSA. Support capacity building for treasury officials on cash management within the TSA environment.
• Provide Technical Assistance for Expansion: Offer expertise for the challenging task of bringing all revenue streams, including foreign aid and loans, under the TSA umbrella with proper classification and reporting.
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