The Treasury Single Account (TSA) was adopted by Ngozi Okonjo-Iweala, a diehard neoliberal, while she was Minister of Finance under the presidency of Goodluck Jonathan. The TSA a monetary tool introduced to reduce the cost of borrowing in a debt-stricken neoliberal world and ensure idle or unused monies by government agencies do not sit in accounts. The introduction of the TSA into the Nigerian system of economic management has nothing to do with the intelligence or sensibilities of either Goodluck Jonathan or President Muhammadu Buhari; it is a “compulsory” International Monetary Fund (IMF) instruction. Is the TSA an effective anti-corruption tool though or not?
The TSA has never been used as anti-corruption tool except (potentially) in Nigeria and maybe some weak Third World nations. The TSA has been adopted all around the world in from developing nations to advanced ones and there are quantifiable outcomes from their implementation. If there are any possible anti-corruption benefits from the TSA for Nigeria they are twofold.
Firstly, they have the potential to eliminate delays in payments and transactions. Properly applied the days when certain top officials could keep the salaries of workers or monies owed to contractors in separate accounts to “help” the cash flow of a ‘patronage bank’ (i.e. one owned by a political godfather or party chieftain) or “cream off” the interest accrued for doing so should be over. Secondly, the TSA will be very useful in reducing the duplication of payments or overpayment for projects and expenditure by or on behalf of the Government of Nigeria (GON). The savings from such can be enormous and the monolithic influence of patronage banks over the nation’s finances will be diminished at least in the short run. The question though is, what will be done with such savings?
On the contrary, the TSA has some weaknesses. TSA is not the effective anti-corruption tool it is made out to be in the Nigerian media. As mentioned before, the TSA is useful for reducing the cost of government borrowing and reducing incidences idle money in the banking system. How government expenditure is spent, the real arena of corruption will depend on the robustness of other organisations and institutions that have nothing whatsoever to do with TSA. Looking at the recent ministerial appointments and past excesses of the GON it will not matter if money from the TSA will be stolen or not. The usual impunity is not going to fade by the look of things.
The TSA has the potential for increasing the incidence of capital flight, by far the biggest mechanism of corruption in Nigeria, because idle government money cannot remain within the banking system. In the UK local authorities, the police and other public agencies were found to have respectively “saved” millions of pounds in idle cash in Iceland i.e. when that economy collapsed and losses to savers were revealed. The reason was simply the UK’s TSA mechanism would not allow those public agencies to hold cash idle cash in banks in the UK. Other OECD nations have been implicated in such practices. The GON recently fined banks in Nigeria for holding idle cash on behalf of state agencies and not reporting it. Where will such money be banked next time?
There is also the potential for the TSA to create narrow monolithic corruption by few at the centre of the GON because it will increase the tendency for micromanagement at the very highest echelons of power. Some of the implications of micromanagement are that if money is to be used corruptly, a few men and women will have access to enormous funds with a lot of discretion in conjunction and it also prevents effective good governance in areas away from the centre. Such will create a net upward flow of cash rather than the usual downward flow necessary for good governance.
We have all witnessed and been assured by the GON since the 1960s to present day that government reform; the introduction of new laws; the introduction of anti-corruption agencies; the setting up of panels, tribunals and commissions; computerisation of financial management, financial intelligence/surveillance, water-tight accounting techniques, transparency procedures, asset declaration etc. individually or collectively are the best practical solutions to corruption. But corruption is rising in Nigeria and almost everywhere else on the planet.
TSA? Pie in the sky when you die, I’m surely not waiting.