Finance Minister Says TSA to cut N2.22tr budget deficit

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Finance Minister Says TSA to cut N2.22tr budget deficit

By Correspondent

The Minister of Finance, Kemi Adeosun, has said that the N2.22 trillion deficit, projected for this year’s N6.08 trillion budget may be reduced. This is coming courtesy of the N2.2 trillion realised already by the Federal Government (FG), from the Treasury Single Account (TSA) scheme. Speaking at a one-day TSA workshop organised for state accountants-general in Abuja, the minister noted that, “Work is now ongoing within the treasury, to determine how much of these funds can potentially be utilised to part-fund the 2016 budget and how much relates to pending commitments. This, of course, will reduce the amount to be borrowed. “The TSA, at the federal level, has allowed, for the first time, visibility of the total quantity of government funds at any point in time, besides providing us with financial information on the revenues of agencies funded by the government and has reduced revenue suppression. “This information is being used to drive our programme to enforce compliance with the Fiscal Responsibility Act and ensure that revenue generating agencies generate expected surpluses and remit to the federal purse. “The global economic challenges which are affecting our nation demand optimum efficiency in the management of public funds. These objectives require an overhaul of the financial management approaches adopted to meet financial obligations on time and ensure that cost-effective financial support is provided to public institutions. “TSA is an essential reform for any government wishing to pursue fiscal sustainability and prudent management of its resources. It increases accountability and transparency, improves the processing of payments and collections and reduces borrowing costs. “The TSA has provided us with financial information on the revenues of agencies funded by the government and has reduced revenue suppression. “TSA has eliminated opportunities for brokerage and other corrupt practices that previously encouraged agencies to accumulate funds with commercial banks, rather than apply them to their intended uses. We believe that this will reduce payment delays to contractors, minimize late payment penalties, and will consequently improve project completion times and service delivery.” “TSA has corrected the practice of government borrowing short-term funds at high rates of interest, whilst simultaneously having idle funds in various bank accounts. By reducing the number of accounts in operation, monitoring and control have significantly improved. The nation’s revenue base is still low and its administration still leaves room for improvement. This is bedevilled with a range of problems such as poor computerisation, lack of skilled and dedicated employees, corruption, lack of awareness and of course, unpatriotic conduct of some of the operators. “This clearly indicates that the underlying assumptions underpinning the 2016 budget may only be realised with serious efforts put in place towards revenue efficiencies and expenditure discipline, such as implementation of the TSA and cash management concepts by all tiers of government. “At the federal level, l can assure you that our experience has been worthwhile. TSA has provided complete and timely information on government cash resources, improved operational control on budget execution, enabled efficient cash management, reduced bank fees and transaction costs, facilitated efficient payment mechanisms and it has also reduced the FGN ways and means required to bridge the budget funding gap.”

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