The Federal Government is planning to reduce the amount of borrowing needed to fund the 2016 budget from funds mopped up from government agencies through the implementation of the Treasury Single Account.
The 2016 budget, which has been submitted by President Muhammadu Bubari to the National Assembly, has a deficit of N2.2tn.
The deficit, according to the fiscal document, is to be financed through the borrowing of N1.84tn made up of domestic borrowing of N984bn and foreign borrowing of N900bn.
There are anxiety in government circles that the deficit may rise to about N3tn as a result of the global drop in oil price, which is currently selling below the $38 per barrel budget benchmark price.
But speaking on Monday at a workshop on TSA for the accountants-general of the states in Abuja, the Minister of Finance, Mrs. Kemi Adeosun, said the over N2.2tn, which has so far been recovered from government agencies through the TSA, would assist in reducing the volume of borrowing.
She said the current issues and challenges surrounding cash flow management had re-enforced the need to ensure that scarce resources at the disposal of the federal, state and local governments were prudently and efficiently managed.
Adeosun described the workshop as apt and timely, as it came at a time when the global economic downturn was creating challenges that demanded efficient and effective management of cash resources.
She explained that the TSA was an essential reform for any government wishing to pursue fiscal sustainability and prudent management of its resources.
Outlining some of the benefits of the TSA, the minister said it would increase accountability and transparency, improve the processing of payments and collections, and reduce borrowing costs.
Adeosun said, “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.”