PROSPECTS AND CHALLENGES OF TREASURY SINGLE ACCOUNT IN A DEVELOPING ECONOMY: CASE STUDY OF NIGERIA


PROSPECTS AND CHALLENGES OF TREASURY SINGLE ACCOUNT IN A DEVELOPING ECONOMY: CASE STUDY OF NIGERIA

Abstract

This research project is a search for the prospects and challenges of treasury single account in a developing economy.

Chapter one of the study lays an introduction for subsequent chapters. Following the background of the study, the problem statement and the objective of the study which provided the basis for the significance of the study and the hypothesis were stated. The limitations of this study were also highlighted.

In the literature review as contained in chapter two, works of various authors, international and local journals were reviewed to elicit views on the prospects and challenges of treasury single account in a developing economy.

Chapter three, research methodology, description of population and sampling procedure for data collection were discussed. Methods of questionnaire design, determination of sampling size and questionnaire distribution were also highlighted.

Chapter four was based on the analysis of data collected. This chapter was sub-divided into data analysis, hypothesis testing and summary. Percentage table, figure and narration were carefully employed for proper understanding and testing of hypothesis.

Finally, chapter five was divided into a summary of findings, recommendation and conclusion.

TABLE OF CONTENTS

Title page  ---------I

Approval page---------ii

Acknowledgement    ---------iii

Dedication     ----------iv

Abstract    ----------v

Table of content  ---------VI

List of Tables  ----------ix

CHAPTER ONE

1.1 Background of the study      -------1

1.2 Statement of the problem    -------3

1.3 Objective of the study-------4   

1.4 Research question    --------4

1.5 Research hypothesis -------4

1.6 Significance of the study-     -------4

1.7 Scope of the study    --------5

1.8 Limitation of the study-  -------5

CHAPTER TWO

2.0 Literature review      --------6

2.1 Introduction  ---------6

2.2.      Theoretical framework  -------6

2.3 Acts instituted by the government to strengthen treasury single account (TSA) in Nigeria   -- -------11

2.4 Conceptual framework   -------11

2.5 Empirical framework -------12

2.6 Accounts under treasury single account (TSA)     ----13

2.7 Relationship between the accounts under (TSA)   ---15

2.8 Prospects of treasury single account (TSA)    ----16

2.9 Challenges of treasury single account (TSA)   ----16

2.10     Concept of treasury single account (TSA) -----18

2.11     Implication of treasury single account (TSA) to the Nigeria economy   -22

2.12     History of treasury single account in Nigeria (TSA)   ---25

CHAPTER THREE

3.0 Research methodology  -------26

3.1 Introduction  ---------26

3.2 Research design  --------26

3.3 Population of the study  -------26

3.4 Sample size and technique   -------27

3.5 Source of data--------27

3.6 Instrument of data collection    ------27

3.7 Data analysis ---------28

CHAPTER FOUR      

4.0 Presentation and analysis    -------29

4.1 Introduction  ---------29

4.2 Data presentation and analysis ------29

4.3 Testing of research hypothesis ------36

4.4 Summary of findings -------37

CHAPTER FIVE

5.0 Conclusion and recommendation   ------38

5.1 Introduction ---------38

5.2 Conclusion     ---------39

5.3 Recommendations    --------39

Questionnaire --------40

Bibliography---------43

CHAPTER ONE

INTRODUCTION

1.1    BACKGROUND TO THE STUDY

Treasury Single Account is a public accounting system under which all government revenue, receipts and income and collected into one single account, usually maintained by the country’s Central Bank and all payments done through this account as well. The purpose is primarily to ensure accountability of government revenue, enhance transparency and avoid misapplication of public funds. The maintenance of a Treasury Single Account will help to ensure proper cash management by eliminating idle funds usually left with different commercial banks and in a way enhance reconciliation of revenue collection and payment (Adeolu, 2016).

Section 80 (1) of the 1999  Constitution as amended states “All revenues, or other money raised or received by the Federation (not being revenues or other money payable under this Constitution or any Act of the National Assembly into any other public fund of the Federation established for a specific purpose) shall be paid into and form one Consolidated Revenue Fund of the Federation”; successive governments have continued to operate multiple accounts for the collection and spending of government revenue in flagrant disregard to the provision of the constitution which requires that all government revenues be remitted into a single account. It was not until 2012 that the government ran a pilot scheme for a single account using 217 ministries, department and agencies as a test case. The pilot scheme saved Nigeria about N500 billion in frivolous spending. The success of the pilot scheme motivated the government to fully implement TSA, leading to the directives to banks to implement the technology platform that will help accommodate the TSA scheme. The recent directives by President Mohammed Buhari that all government revenues should be remitted to a Treasury Single Account is in consonance with this programme and in compliance with the provisions of the 1999 constitution (CBN, 2016).

The Central Bank has opened a Consolidated Revenue Account to receive all government revenue and effect payments through this account. This is the Treasury Single Account. All Ministries, Departments and Agencies are expected to remit their revenue collections to this account through the individual commercial banks that act as collection agents. This means that the money deposit banks will continue to maintain revenue collection accounts for Ministries, Departments and Agencies but all monies collected by these banks will have to be remitted to the Consolidated Revenue Accounts with the CBN at the end of each banking day. In other words, Ministries, Departments and Agencies account with money deposit banks must be terrorized at the end of every banking day by a complete remittance to the Treasury Single Account of all revenues collected. The implication is that banks will no longer have access to the float provided by the accounts they maintained for the Ministries, Departments and Agencies. Difference types of account could be maintained under a Treasury Single Account arrangement and these may include the TSA main account, subsidiary or sub-accounts, transaction accounts and zero balance account. Other types of accounts that could be operated include imprest accounts, transit accounts and correspondence accounts. These accounts are maintained for transaction purposes for funds flowing in and out of the Treasury Single Account (Adeolu, 2016).  

From the foregoing, it is obvious that the primary benefit of a Treasury Single Account is the mechanism it provides for proper monitoring of government receipts and expenditure. In the Nigerian case, it will help to block most if not all the leakages that have been the bane of the growth of the economy. We have a situation where some Ministries, Departments and Agencies manage their finances like an independent empire and remit limited revenue to government treasuries. Under a properly run Treasury Single Account, this is not possible as agencies of government are meant to spend in line with duly approved budget provisions. The maintenance of a single account for the government will enable the Ministry of Finance to monitor fund flow as no agency of government is allowed to maintain any operational bank account outside the oversight of the ministry of finance.

As a matter of fact, deposit money banks stand to lose immensely from the implementation of the Treasury Single Account.  This is because of the fact that public sector funds constitute a large chunk of commercial banks deposit.  Indeed, it is estimated that commercial banks hold about N2.2 trillion public sector funds at the beginning of the sector quarter of 2016.  The impact of this amount of money leaving the system can be imagined when one considers the fact that each time the monthly federal allocation is released, the banking system is usually washed with liquidity and as soon as this public sector fund dries up through withdrawal by the states, liquidity tightens again with interbank rates going up.  Of major impact will be the movement of funds of revenue-generating parastatals such as the NNPC, out of commercial banks.

1.2    STATEMENT OF THE PROBLEM

As the Federal government of Nigeria introduces Treasury Single Account, Banks will continue to devise means of mobilizing funds from the private sector.  We see a return of the era when women are employed by banks specifically for deposit mobilization and tacitly encouraged to use any means necessary to get funds.  We see an increase in deposit interest rates as a major means of inducing customers and most importantly we see a drop in lending and in the profitability of banks, at least, in the short to medium term until they fully come to terms with the impact of the policy and begin to properly position themselves for true banking business.  Ultimately, we see the share price of these banks falling as investors attempt to price in the policy impact. However, the implementation of this programme is a critical step towards curbing corruption in public finance. This is a tool to combat corrupt practices, eliminate indiscipline in public finance and ensure adequate fund flow that will be channelled to critical sectors of the economy to catalyze development.

1.3    OBJECTIVES OF THE STUDY

The following are the objectives of this study:

1.    To examine the implications of Treasury Single Account in developing economies.

2.    To identify the benefits of Treasury Single Account.

3.    To examine the challenges of treasury single account.

4.    To study the prospects of treasury single account.

1.4    RESEARCH QUESTIONS

1.    What are the implications of the Treasury Single Account in developing economies?

2.    What are the benefits of Treasury Single Account?

3.    What are the challenges of the implementation of treasury single account?

4.    What are the prospects of treasury single account?

1.6. RESEARCH HYPOTHESIS

Ho: The application of treasury single account is not good for a developing economy.

Hi: The application of treasury single account is good for a developing economy.

1.7    SIGNIFICANCE OF THE STUDY

The following are the significance of this study:

1.    The results from this study will educate the general public on the benefits of the Treasury Single Account to the developing economy of the country. It will also educate on its temporary effect on the banking industry as a huge sum of money will be leaving the sector suddenly.

2.    This research will also serve as a resource base to other scholars and researchers interested in carrying out further research in this field subsequently if applied will go to an extent to provide a new explanation to the topic.

1.8    SCOPE/LIMITATIONS OF THE STUDY

 This study will cover the benefits and the limitations of Treasury single account on Nigeria economy

LIMITATION OF STUDY

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted to the research work.

REFERENCES

Adeolu I. A. (2016). Understanding The Treasury Single Account (TSA) System – Things You Should Know.   Business & Economy, Market Development.

CBN (2016) “Revised Guidelines for compliance with Treasury Single Account by Banks in Nigeria

.

PROSPECTS AND CHALLENGES OF TREASURY SINGLE ACCOUNT IN A DEVELOPING ECONOMY: CASE STUDY OF NIGERIA



TYPE IN YOUR TOPIC AND CLICK SEARCH.






RESEARCHWAP.NET
Researchwap.net is an online repository for free project topics and research materials, articles and custom writing of research works. We’re an online resource centre that provides a vast database for students to access numerous research project topics and materials. Researchwap.net guides and assist Postgraduate, Undergraduate and Final Year Students with well researched and quality project topics, topic ideas, research guides and project materials. We’re reliable and trustworthy, and we really understand what is called “time factor”, that is why we’ve simplified the process so that students can get their research projects ready on time. Our platform provides more educational services, such as hiring a writer, research analysis, and software for computer science research and we also seriously adhere to a timely delivery.

TESTIMONIES FROM OUR CLIENTS


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "Exceptionally outstanding. Highly recommend for all who wish to have effective and excellent project defence. Easily Accessable, Affordable, Effective and effective."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I saw this website on facebook page and I did not even bother since I was in a hurry to complete my project. But I am totally amazed that when I visited the website and saw the topic I was looking for and I decided to give a try and now I have received it within an hour after ordering the material. Am grateful guys!"

    Hilary Yusuf, United States International University Africa, Nairobi, Kenya.
  • "Researchwap.net is a website I recommend to all student and researchers within and outside the country. The web owners are doing great job and I appreciate them for that. Once again, thank you very much "researchwap.net" and God bless you and your business! ."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "Great User Experience, Nice flows and Superb functionalities.The app is indeed a great tech innovation for greasing the wheels of final year, research and other pedagogical related project works. A trial would definitely convince you."

    Lamilare Valentine, Kwame Nkrumah University, Kumasi, Ghana.
  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • "researchwap.com is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much researchwap.com, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about researchwap.com, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing researchwap.com.