A Critical Analysis of Treasury Single Account Policy in Nigeria

One of the major objectives of establishing Treasury Single Account (TSA) scheme is anchored on the fact; it will wipe out corruption that is prevalent at the MDAs and instill accountability and internal control which is necessary for effective conduct of the monetary and fiscal policy surfeit. However, this objective has not been fully realized as corruption has become cancerous worm that has eaten deep into the fabric of the Nigeria society, and cannot be wiping out by a single policy. However, we cannot deny the fact that TSA has to some extent ameliorates corruption in the public establishments. Despite the above observed rigidities, some key economic metrics have shown that the policy has created positive impacts on the fiscal and monetary policies: TSA makes it easier for tax collections through technology which confers seamless generation and expenditure of the public revenue. While it has aid the CBN in the management of the monetary policy such as reducing liquidity in the inter-bank market, through seamless management of market liquidity, ensuring monetary and price stability and more importantly reduces the use of Open Market Operation(OMO) and the consequent cost. This paper will take a critical look on the TSA by analyzing the different theories posited by many financial thinkers, the positive impacts on the economy and the challenges that may prevent in realizing such economic advantages will be analyzed, and, positive recommendations will be proffered.