- TSA as Transparency Enabler, Not Anti-growth
Difficult times have been well assessed by experts as a period of more want, with less satisfaction. It is also a period of rather than more alternative solutions, but blames, as well as regrets. The Treasury Single Account (TSA), which is gradually assuming a household recognition in the country, is not totally a unique phenomenon, it is global issue, with varied nomenclature.
The second is that the money gathered by TSA was returned to the owner- government, which hitherto was borrowed “ignorantly” for a fee. Besides, while the tenor or period of the “free ride” lasted in the hands of those holding the money, they never reported how much they earned without paying the owner any fee to owner.
Of course, the inflation rate hit an 11 year high at 17.9 per cent in September 2016, and expected to breach the 18 per cent mark by October data. It is worth noting that had the pool of fund sterilised by TSA been in the banking system, it would have fueled more inflation than at present.
While the assessed “idle” funds created by TSA are not encouraged in a system that needs free flow of funds, the decision to still keep them idle is a policy matter and power of negotiation by those who really need them. The TSA has done its work of gathering the “scattered” public fund together, it is left for policy makers and businesses to re-engage the pool.
We call it TSA and in other jurisdictions, they call it something else, but the objective and process are one- making the financial position of government transparent and effective. Almost, if not all the governments of the world, operate it.
Complaints against economic policies, with the TSA receiving some major knocks, have made informed commentary a necessity, especially as the reforms to restructure and institute openness in governance gather momentum.
The Vice President, Prof. Yemi Osinbajo, in August 2016, said that 40,000 ghost workers had been discovered with the help of the TSA scheme, thus promoting transparency in governance. This figure, when multiplied by the current Minimum Wage of N18,000 amounts to N720 million monthly and N8.64 billion yearly.
The Accountant General of the Federation, Ahmed Idris, in March this year’ said that the programme has assisted the government in recovering funds exceeding ₦3.3 trillion in less than a year of enforcement. While this amount may not be physical clawback of Naira, it signals amount that would have been lost to the “old ways” of doing things.
Prior to the enforcement of the TSA scheme, Ministries Departments and Agencies (MDA’s) of the republic ran over 17,000 lax bank accounts. With the implementation, over 900 MDA’s operate the TSA, hence cutting costs of governance.
Some state governments such as Lagos and Kaduna have bought into the programme in a bid to promote accountability in governance. They realised that the long term gains of the policy is enormous.
The multiplicity of bank accounts operated by MDA’s enabled banks to run an eccentric financial system whereby funds from the loose government accounts were loaned back to the government at a high interest rate. These excesses have been cut with the implementation of the TSA thereby exposing their shortcomings in performing their financial intermediaries. They have now diversified.
Unfortunately, some organisations, as well as industry leaders have joined in blaming the TSA scheme for the economic downturn, which could falsely lead one into believing that the TSA is a nefarious plot to impair the populace’s standard of living. If government has the penchant of delaying the release of project funds, it is not because TSA is in operation, because it takes a signature or order where applicable for the fund to be released”
TSA might be seen in bad light in the country however, globally, it is a standard for public accountability.
Here are some of the things everyone needs to know about TSA or be reminded of:
TSA is a financial policy established by the Federal Government to consolidate all revenues and payments from its various Ministries Departments and Agencies (MDA’s) into a single account or a group of linked accounts domiciled in the Central Bank of Nigeria (CBN).
TSA was initiated by the previous administrations, but executed by the current government. Even President Muhammadu Buhari has attested to the fact that it is a laudable idea during his session with the Nigerians living in the United Kingdom in February.
Sections 80 and 162 of the 1999 Constitution of the Federal Republic of Nigeria states that there should be a Consolidated Revenue Fund for all revenue and other moneys raised and received by the Federation. TSA, according experts, is in compliance with this section of the constitution. This, so far, has put all conversations centering on its legality to silence.
Ecobank Partners NiDCOM to Mobilise Nigerians Abroad for National Development
In a bid to fulfill it’s objectives and mandate, the Pan African Bank has promised to support Nigerians living and working abroad through it’s partnership with NiDCOM.
The Managing Director, Ecobank Nigeria, Patrick Akinwuntan has stated that the bank is privileged to work closely with the Nigerians in Diaspora Commission, (NiDCOM) and will continue to pursue one of its key mandates of helping to enhance the economic development and integration of Africa through its support to Nigerians living and working abroad.
Speaking at the maiden edition of the Diaspora Quarterly Lecture Series with Ecobank as the sole banking partner which took place on Saturday, 8th May 2021, he noted that Ecobank remains a critical bridge for Nigerians abroad, as it has made huge investments in the necessary platforms to enable them connect with home seamlessly. The event held online and had over 2000 participants from across all the continents in attendance.
“Nigerians in the diaspora play a major role in nation building, their contribution goes a long way to catalyse economic development. For us at Ecobank, we are a pan-African institution positioned to foster the economic growth and integration of our continent, so we are particularly pleased to work closely with the Nigerians in Diaspora Commission (NiDCOM), ably led by the Chairman/CEO, Hon Abike Dabiri-Erewa”.
“We are committed to ensuring that every Nigerian living abroad is able to remit home seamlessly and affordably, access viable investment opportunities and as the financial institution of choice for Nigerians abroad, we have deployed the necessary resources to actualise this.” He stated.
The Minister of Interior, Ogbeni Rauf Aregbesola, who was also present, reiterated the readiness of the government to collaborate with Nigerians in the diaspora, highlighting the new processes put in place to facilitate passport issuance, noting that all backlog of passport applications would be cleared by the end of May 2021.
Also speaking, the Hon. Minister of State, Foreign Affairs Amb. Zubairu Dada said harnessing the human capital and material resources of Nigerians in the diaspora towards the socio-economic, cultural, and political development of Nigeria can no longer be ignored. He pointed out that the Nigerian diaspora community is well educated, resourceful, skilled, and exposed to global best practices.
The NiDCOM Chairman/CEO, Hon. Abike Dabiri- Erewa explained that the Diaspora Quarterly Lecture Series is projected to be a major aspect of national discourse, where Nigerians abroad can be kept abreast of the government’s policies, programmes and projects.
Increase in Price Boosts Revenue of Dangote Sugar by 41.5 Percent in Q1 2021
Revenue of Dangote Sugar Refinery Plc rose by 41.5 percent to N67.394 billion in the first quarter (Q1) of 2021 from N47.643 billion recorded in the same quarter of 2020.
According to the leading sugar manufacturer, the increase in revenue was a result of the increase in the price of sugar in the first quarter. The company claimed price adjustment was necessary to mitigate the negative effect of inflation and depreciation on the company.
Volumes only rose by 5.7 percent during the quarter despite a 41.5 percent increase in revenue, meaning the increase in price was the main sales catalyst.
In the company’s unaudited financial statements, gross profit grew from N12.721 billion in Q1 2020 to N18.044 billion in Q1 2021.
Similarly, operating profit stood at N15.884 billion, up from N10.747 billion posted in Q1 2020.
Finance cost more than double from N1.353 billion in Q1 2020 to N3.412 billion in Q1 2021.
Dangote Sugar’s profit before tax rose from N9.509 billion recorded in the corresponding quarter to N11.949 billion in the quarter under review.
The company paid N3.646 billion in income tax, slightly higher than N3.137 paid in the same quarter of 2020.
Profit for the period grew from N6.372 billion in Q1 2020 to N8.302 billion in Q1 2021.
Commenting on the company’s performance, Dangote Sugar said “EBITDA increased by 34.7% to N17.02 billion (2020: N12.64 billion) on account of increased earnings. Group profit after taxation for the period increased by 30.3% to N8.30 billion (2020: N6.37 billion) reflecting management’s unrelenting drive to deliver consistent shareholder value.”
On price increase, the company hinged it on series of devaluation carried out in 2020 by the Central Bank of Nigeria (CBN), escalating inflation, port congestion and rising in price of global sugar. Dangote Sugar said its imported raw sugar from Brazil under Federal Government’s backward integration plan.
“We have continued to witness high cost of raw materials, energy costs and other input costs due to rising inflation and FX rate fluctuation. Further cost escalation is anticipated in the year as inflationary pressure mounts,” the company said.
FBN Holdings Suffers 39 Percent Drop in Profit to N15.6 Billion in Q1 2021
FBN Holdings Plc profit after tax declined by 39 percent from N23.140 billion recorded in the first quarter (Q1) of 2020 to N15.6 billion in the first quarter of 2021.
In the leading financial institution’s unaudited financial statements released through the Nigerian Exchange Limited, gross earnings declined by 14.5 percent to N137 billion in the period under review, down from N160 billion filed in the previous quarter.
Similarly, net interest income declined from N60.253 billion achieved in Q1 2020 to N52.793 billion.
Net interest income after impairment charge for losses also dipped from N50.547 billion in Q1 2020 to N39.619 billion in Q1 20201. While net fee and commission income rose from N20.773 billion in Q1 2020 to N28.427 billion in Q1 2021.
Profit before tax declined by 34 percent to N18.906 billion in the quarter under review, down from N28.680 billion posted in the corresponding quarter of 2020.
FBN Holdings paid N3.285 billion in income tax in the first quarter of 2020.
Therefore, profit for the period stood at N15.621 billion. While Net Assets contracted from N765.2 billion to N764.8 billion.
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