The Federal Government has saved a total of N108.1bn from charges imposed by banks for managing funds belonging to its ministries, departments and agencies since the commencement of the Treasury Single Account in September 2015.
The amount represents the various charges and account maintenance fees that were hitherto imposed by the Deposit Money Banks for holding government funds.
The Accountant General of the Federation, Alhaji Ahmed Idris, gave the figure while speaking in Abuja at a two-day workshop for finance journalists on the TSA and other public financial management reforms.
He revealed that before the policy was introduced into the public sector as part of the public financial management reforms, a monthly sum of N4.7bn was incurred by the Federal Government as bank charges, interest on loans, and account maintenance fees among other charges.
There are 23 months between September 2015 and July 2017, and with a monthly savings of N4.7bn, the total amount so far saved is now N108.1bn.
The TSA is a platform used by the government to unify all its accounts by ensuring that all funds belonging to the Federal Government are kept with the Central Bank of Nigeria.
The initiative, which took off fully in September 2015, had been complied with by over 900 agencies of the government with 20,000 bank accounts closed while over N5tn had been moved from banks to the CBN.
The AGF explained that the withdrawal of the funds from banks had made it difficult to impose any charges on the Federal Government’s funds.
He stated that through the policy, the government had been able to block leakages, which characterised the public sector before the introduction of the TSA in September 2015.
Apart from blocking leakages, Idris said the TSA initiative had assisted the government to overcome the burden of indiscriminate borrowings by the MDAs, thus saving government a lot of bank charges associated with the borrowings.
He said, “The TSA has enabled us to make tremendous gains. We have successfully eliminated multiple banking arrangements resulting in consolidation of over 20,000 bank accounts, which were spread over the Deposit Money Banks across the country.
“This has further brought about transparency and effective tracking of government revenues. It has also led to the blocking of leakages and abuse, which characterised the public financial management before the implementation of the TSA.
“The TSA has taken us out of the era of indiscriminate borrowings by the MDAs and saved government the charges associated with those borrowings, which hitherto amounted to N4.7bn monthly.”
Idris also said that the workshop was part of the efforts to increase the level of consciousness on why the Federal Government deemed it necessary to carry out the public finance management reforms, noting that a major objective of the reforms was to support the fight against corruption in the country.
On the payment of a backlog of promotion arrears to civil servants, the AGF said the Federal Government had commenced the process of making payments to those affected.
He said unlike in the past where funds were released to the various MDAs for onward disbursement to beneficiaries, a new approach had been adopted to check the rate of abuse of the process.
He said the accounts of those that were promoted and owed arrears would be credited directly after the necessary verification.
He said about N13.2bn had been provided for the payment of the backlog of promotion arrears to the civil servants.