An Evaluation of Treasury Single Account as a Cash Management Mechanism in Nigeria’s Public Sector

The Nigerian government since July 2003 has taken bold steps to tackle the deep seated risks to macroeconomic and fiscal stability and address key sources of economic inefficiency. This has led to the implementation of policies to strengthen economic management and deal with weak governance and corruption. One such policy directive is the Treasury Single Account (TSA). Treasury Single Account is a public accounting system under which all government revenue, receipts and income are collected into one single account, usually maintained by the country’s Central Bank and all payments done through this account as well (Pattanayak & Fainboim, 2010; Adeolu, 2015; Ekubiat & Ime, 2016). The purpose is primarily to ensure accountability of government revenue, enhance transparency and avoid misapplication of public funds. Ekubiat and Ime (2016) opined that the adoption and implementation of Treasury Single Account (TSA) by any government, especially in a dwindling economy, is due to the fact that a Treasury Single Account is primarily to ensure accountability of government revenue, enhance transparency and avoid misappropriation of public funds.
It is noteworthy mentioning that successive administration in the country operated multiple and fragmented systems for revenue collection and disbursement, which was in flagrant disregard to the provision of the constitution which required that all government revenues be remitted into a single account (Adeolu, 2015; Ekubiat & Ime, 2016). The 1999 Constitution of the country in Section 80 (1) clearly stipulates that:
“All revenues, or other moneys raised or received by the Federation (not being revenues or other moneys 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”.

The Central Bank of Nigeria therefore created an account called the ‘Consolidated Revenue Account’ to receive all government revenue and effect payments. This account is referred to as the Treasury Single Account. In 2012 the Nigerian government ran a pilot scheme for a single account using 217 ministries, departments 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, 2015). All Ministries, Departments and Agencies are expected to remit their revenue collections to this account through individual deposit money banks who act as collection agents. With this arrangement, 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 practical terms, the accounts of Ministries, Departments and Agencies with the deposit money banks must be zerorized at the end of each banking day by a complete remittance to the Treasury Single Account of all monies collected (Ekubiat & Ime, 2016). Different types of account are operated in a Treasury Single Account arrangement and these may include the TSA main account, subsidiary or sub­accounts, transaction accounts and zero balance account. Other types of accounts that could operate 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, 2015). Studies have identified numerous benefits of operating a Treasury Single Account system.


Enwegbara (2015) opined that the implementation of Treasury Single Account has the benefit of blocking leakages in government financial arrangement, thereby rendering funds available for investment in other capital projects. Other benefits include, the promotion of transparency, reduction of corruption and diversion of public funds, elimination of idle funds left in numerous accounts in commercial banks usually used to bear interest for corrupt entities and easier reconciliation of revenue collections and payments (Okechukwu & Chukwurah, 2015). 

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