Nigeria now saves, on the average, N45billion monthly in interest payments on the back of Treasury Single Account (TSA), fully set up in 2016 to enable federal government better manage its lean resources.
Minister of Finance, Budget and National Planning, Zainab Ahmed who announced this on Tuesday in Abuja said the government “can now easily determine its aggregate cash balance which is critical for managing public finances at a time of acute fiscal constraints.”
Ahmed spoke as Nigeria signed a Memorandum of Understanding with The Gambia on TSA implementation.
With the co-operation, The Gambia, through its Ministry of Finance and Economic Affairs would leverage the vast knowledge, experience and technical expertise that Nigeria has gained over the past years of implementing TSA and other Public Financial Management reforms.
On the recommendations of the International Monetary Fund (IMF), The Gambian authorities had in May, 2019 visited Nigeria to understudy TSA implementation.
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Ahmed said following the successful conclusion of the tour, The Gambia requested for technical co-operation with Nigeria to support its own transition to TSA which saw representatives of both countries develop an MOU detailing the terms and scope of the co-operation.
“The co-operation will enable The Gambia to leverage on the experience of Nigeria to build on our strengths while avoiding our mistakes.
Implementation of TSA has benefited Nigeria immensely,” she explained at the event.
Ahmed said Nigeria has gained so much from TSA implementation, including, “saving average N45 billion monthly in interest payments.”
On the monetary policy side, she explained that government now has a “better control over money supply and therefore able rein in inflation and undue pressure on the Naira.
“Our foreign reserve position has also recorded appreciable improvement through the consolidation of Federal Government foreign currency earnings under the TSA,” she added.
Ahmed hoped The Gambia will enjoy all of these benefits if they diligently implement TSA, but advised on strong political will to enable them pull through.
Her words: “Do not embark on this journey if you are not confident that you have the buy-in of your topmost political leadership. It is the most potent antidote against the several headwinds that will try to undermine and derail your reform effort.
“Next in line is to assemble the right team of competent and committed reformers with in-depth knowledge of PFM. Upon that team will rest the responsibility of translating policy into action and by so doing, ensuring that your TSA expectations are met.
“There are more factors at play. You need, for instance, the financial resources and an enabling environment to drive reforms.
She also emphasized the importance of synergy between the fiscal and monetary authorities cannot be over-emphasized. Equally important is the co-operation of other stakeholders: the parliament; the ministries, departments and agencies of government; the banks and service providers.
“Above all, the general public, on whose behalf government exists and manages public funds must be convinced that TSA and other reforms are being implemented in their interest and for the good of the country,” she noted.
She also said Nigeria is committed to supporting other African countries who may want to build on our experience and significant progress in TSA implementation.
In her response, Ada Gaye, Permanent Secretary, Ministry of Finance of The Gambia, said the tour has helped them to understand the workings of the TSA.
She said: “The Gambia wants to efficiently manage its funds; the fragmentation of accounting systems in The Gambia is huge. It is, therefore, noteworthy for The Gambia to adopt TSA.
“We are going to create the needed sensitisation to help the people of The Gambia understand the process. Nigeria is the big brother while The Gambia is the small brother. We are happy to cement this brotherly love.”
The Gambian High Commissioner to Nigeria, Amadou Sheikh Oman Taal, said Nigeria remains a big example within the Economic Community of West African States (ECOWAS) region.
“We are trying to make reforms in our financial management. Therefore, this collaboration with Nigeria is very important to us.
“The Gambia Central Bank will get closer to the Central Bank of Nigeria (CBN) so as to learn and get the necessary experience,” he also said.
