No turning back on Treasury Single Account implementation - Veep
Vice-President Dr. Mahamudu Bawumia on Thursday reiterated government’s commitment to fully implement the Treasury Single Account (TSA).
He said there would be no turning back on its execution.
In a speech read on his behalf Dr. Bawumia said after a number of attempts by successive governments over the years to implement the TSA, the government was determined to do it.
However, he said government alone could not do it and called for support from stakeholders, including the commercial banks to ensure the success of the policy.
“I wish to appeal to all the commercial banks to lend their support as they always do to help Government implement this policy successfully for the long term benefit of the nation,” Dr. Bawumia said.
The TSA, which is a unified structure of government bank accounts, enables consolidation and optimum utilization of government cash resources.
It is a set of linked bank accounts through which the government recognizes all its receipts and payments and obtains a consolidated view of its cash resources at the end of each day.
Dr. Bawumia said the goal of the TSA was not only meant to give the government a consolidated view of its cash resources but to ensure efficient treasury management as required under the cash management reform initiatives.
Mr. Ken Ofori-Atta, the Minister of Finance, said the launch of the TSA followed the commitment of the government to enforce the Public Financial Management Act, 2016, which established the TSA.
He said the transfer of the bank accounts of all government institutions to the Central Bank was to ensure the ease of management and monitoring.
An estimated GH¢5 billion was with the commercial banks as government deposit.
Mr. Ofori-Atta said pulling these resources into the central bank would reduce the risk of resorting to central bank overdraft for government expenditure and would reduce the cost of building buffers for cash management purposes.
Mr. Ofori-Atta said the implementation of the TSA in the first phase would not cover State-Owned Enterprises that borrow on their own balance sheet. He said those institutions would continue to do business with the commercial banks.
The Minister said so far instructions had been issued for the transfer of bank account balances belonging to nine out of 24 Ministries, Departments, and Agencies.
“Out of 190 accounts of the nine MDAs (Ministries, Departments, and Agencies), bank balances standing in 36 of these accounts have been transferred to the Bank of Ghana,” he said.
He said as at August 7 GH¢89.668 million has been transferred from the commercial banks to Bank of Ghana.
Mr. Ofori-Atta said the TSA would eventually lower actual borrowing and reduced pressure on short-term yields and ensured that MDA's funding needs were met in a timely manner for efficiency and effectiveness.
There are fears that the implementation of the TSA might cripple the operations of the commercial banks, which have called for a phased implementation of the policy.
However, Mr. Eugene Ofosuhene, the Controller and Accountant General, said the adoption of the TSA would not have any adverse effect on commercial banks.
“I can confidently say that pre-feasibility studies and impact assessment that have been conducted prove that the Commercial banks will not be significantly impacted both on the aggregate level and on the individual basis,” he said.
Mr. Alhassan Andani, the President of the Association of Bankers, said they were in full support of the TSA implementation.