The recent directive from President Muhammadu Buhari that key Federal Government organs, parastatals and ministries pay revenues accruing to the government into a Treasury Single Account (TSA), has started creating a boomerang effect in the country, leading to massive downsizing in the banking industry where several thousands of bank workers have been sacked unceremoniously within days.
The affected commercial banks insist they can no longer afford to keep so much staff, in light of the fact that because of the TSA policy, ministries and agencies of government that were formerly their big clients have since commenced withdrawals of their deposits in those banks. Closure of government accounts with commercial banks thus, has left the banks with no other option than to reduce their work force to what they can manage for the moment.
Although the TSA policy was designed with the best intentions, to create transparency and efficiency in the handling of government finance, it is equally going to ground a lot of the commercial banks where monies of government were domiciled. Previously, government ministries and agencies were allowed to maintain accounts in several banks, foreign and domestic, leading to corruption as, at the end of the day, many of these funds were unaccounted for and thus ended up in private pockets.
Already, banks are said to be facing low liquidity as interbank money market recently halted trading for three consecutive days, due to sharp liquidity decline in the system, as the directive on TSA triggered huge cash outflows. What this means is that the profits accruing from these funds domiciled into commercial banks by government agencies will no longer be there.
It was gathered that some banks have been forced to lay off as much as 5, 000 workers, who are mostly desk officers and temporary employers from three major banks in Nigeria – Diamond Bank, Zenith Bank and First Bank – have been sacked in the last couple of weeks. And there’re indications that, as we go along, more banks with no major accounts to manage anymore will have no choice than to also lay off thousands of workers.
The president may not have foreseen the repercussion that his TSA policy would have on the average Nigerian, particular on those bank workers who have been forced to leave their jobs. Now, with the banking sector in Nigeria reportedly being the highest employer of labour right now, one wonders what would become the lot of those who have been asked to leave and their families who may be depending on them for daily bread.
The TSA is a laudable initiative, but perhaps there are better ways to implement it without creating so much job cuts. The old saying goes, ‘don’t throw away the baby with the bath water’. With the way the banks have gone about the issue, it gives the general notion that monies from their former clients, ministries and agencies, was the only income that kept them afloat. And now that they’ve lost these big clients, they could no longer keep their workers.
The president must have been briefed by his aides of the massive unemployment that the TSA was already creating in the economy. One wonders what he has to say about it. There’re already too many unemployed youth and uncontrolled crime in Nigeria; do we need to bloat our already saturated labour markets? Are there no better ways to implement the TSA without creating further unemployment in the system?