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The Lacuna Left By TSA And Measures To Remedy It -By Lamidi Sherifdeen Toluwase

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Lamidi Sherifdeen Toluwase

Lamidi Sherifdeen Toluwase

 

The implementation of Treasury single account in Nigeria by President Muhamadu Buhari led administration is a very laudable achievement, especially in a bastardized and hyper corrupt nation as Nigeria, the policy aim at improving fiscal responsibility and fund control by adopting a unified account in the vault of the CBN where the consolidated revenue fund is been remitted, this is a very good cash control policy which will in a long way also reduce corruption..

Although with the numerous benefit obtainable from Treasury Single Account, there are still some Lacuna in it which can be linked to the cause of the present economic predicament.

The total implementation of TSA at a time when Nigeria’s foreign earnings has decline tremendously and a period when there are a lot of uncertainties has generated a lot of argument by various analyst .

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The transfer of over 3.5trillion naira government fund from commercial banks which constitute their major deposit base, to an account domiciled at the CBN have an adverse effect on the economy precisely the banking sector basically on the aspect of liquidity ..

Knowing the importance and vital role of the banking sector as the back bone of any economy, when the banking sector shakes,expect the whole economy to crumble. Its so glaring with the current economic crises, we can now see it in the practical sense what an unstable banking sector can do to an economy with the current happenings in Nigeria today.

However the solution to our is not far-fetched, I will suggest two measures which will be helpful in curbing the negative effects of TSA which will thereafter improve our overall economic performance.

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1. I think the federal government should maintain a TSA in various commercial banks ,where balances on this accounts will be reconciled on a daily basis to avoid misappropriation. By this approach the federal government will earn interest on this funds which will serve as another source of income to the Government and will in turn increase liquidity in the banking sector by making deposit available, This will enable the bank create money /deposit by lending credit facilities to their customers which will also stimulate the economy by providing finance for customers willing to borrow to run their business…

2. Alternatively the federal government through the CBN can, instead of keeping the funds idle in one account with no return,can instead design a scheme where a portion of this fund can be set aside to provide loan facilities that will be accessible to small scale enterprise where the cost of capital will be reasonably affordable..This will in turn stimulate the economy by providing employment for enterprising youth and graduates who finance have always been their problem..

In conclusion I will urge the federal government to consider this advice to remedy our deteriorating economy. And also to urge my fellow Nigerians to keep the hope alive,be strong and enterprising..your hard work will surely payoff..

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Written by:
Comrade Lamidi Sherifdeen Toluwase.

Kogi state University Ayingba.
Department of Banking and finance
08163421402

 

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