With the general elections now
over, it seems a good time to reflect on one of the major success stories of
the current government which affects every Nigerian one way or the other – the
Treasury Single Account (TSA) initiative.
The Federal Government’s TSA
continues to be celebrated as one of the most significant initiatives undertaken
by any government in Nigeria to promote accountability, transparency and fight
corruption in the management of public funds. According to the current
administration, TSA implementation saves the government a whopping ₦24.7
billion monthly and greatly enhances government revenue collection.
Despite its achievements, the
policy has met with mixed reactions from the public, partly due to a lack of
knowledge on the subject, poor stakeholder engagement, and inadequate
sensitisation by government.
Below are facts to further help
public understanding of this key initiative:
1. History of the TSA
The Treasury Single Account is a
policy recommended by the World Bank for the effective management of national
cash assets by ensuring that all government payments and revenue collections
are managed through a single bank account or a set of linked accounts, which
promotes accountability and transparency in the management of public funds.
In 2011, the Federal Government
(under President Goodluck Jonathan) mandated the commencement of the TSA
initiative in Nigeria. A pilot commenced in 2012 on TSA payments (outbound
transactions only) with just over 100 Ministries Departments and Agencies
(MDAs). This was later extended to additional MDAs.
In 2015, President Muhammad
Buhari’s administration mandated the full and comprehensive implementation of
TSA across all Federal Government MDAs without any exception.
2. The Current Cost of
Transactions into the TSA
The Central Bank of Nigeria (CBN)
in a circular of November 2018, announced the new price regime for Federal
Government’s TSA thus:
· Any payment to the Federal
Government at any commercial bank, through Internet Banking, Mobile Wallet, and
Agents would attract a flat fee of N150 (Plus VAT of ₦7.50K) irrespective of
the amount being paid. (Just like you pay a flat fee of N65 for ATM withdrawal
irrespective of the amount withdrawn)
· Payers who choose to make
payment with a debit card will pay the same flat fee of ₦150 plus 0.75% of the
amount being paid, subject to a maximum of ₦1,200 per transaction.
3. Who Bears the Cost
The Federal Government bore the
cost of all TSA payment and collection transactions since inception. However,
in November 2018 the government decided to transfer the cost of revenue
collections to payers, whilst the government continues to bear the cost of
payments transactions.
4. Difference Between the Current
Pricing Regime and the Previous One?
In the previous regime, government
took on the responsibility for payment and revenue transaction costs. In the
current regime, government bears the cost of transactions made to its vendors,
but for payments to government (Government Collections), the payer settles the
transaction charge.
5. Payment Options Currently
Available for Transactions into the TSA
Payers are able to easily
generate invoices for transactions online and make payment to government
through various channels including branches of all Commercial banks, select
microfinance banks, Internet banking portals, POS terminal, cards on Web,
Mobile Wallets, USSD and collection agents.
6. Who Government Pays
Transaction Processing Fees to
The Government is unable to
provide the required infrastructure on its own and has therefore put in place
an ecosystem that includes a multitude of certified and regulated service
providers – Central Bank of Nigeria (CBN), commercial banks, card schemes,
mobile money operators, agents and licensed payment solutions service providers
(PSSPs). to make FGN payments and collection transactions happen.
The fees charged for FGN TSA
transactions go towards remunerating this large group of service providers, to
compensate them for their investment and ongoing service delivery.
7. How to Know How Much to Pay
for any Government Service
A payer can easily go to the
website of any MDA to identify the item to be paid for and generate an
electronic invoice or visit the concerned MDA to obtain an invoice which
clearly indicates the amount to be paid for the relevant item/service.
Each invoice carries a unique
reference for easy tracking and accounting – this is popularly known as the
RRR. No citizen is expected to make any payment to Government without an RRR
number.
8. How Receipts of Payments are
Obtained
Every TSA payment is evidenced by
an automatically generated electronic receipt provided to the payer at the
point of transaction by the bank or sent to the payer’s registered email
address. It is very important for a payer not to leave a payment transaction
point without obtaining a payment receipt that bears the RRR number of the
invoice that led to the payment.
This is what will be checked by
the MDA before providing service. It is also one of the checks and balances
introduced into the TSA payment process to strengthen accountability and
transparency.
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