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Govt., Ghanaian banks on collusion course over planned takeoff of TSA

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Whereas the Ghanaian Vice-President, Dr Mahamudu Bawumia, has reaffirmed the stand of the government, saying “No turning back on Treasury Single Account (TSA) implementation,” Money Deposit Banks (MDBs) operating in the economy has raised issues of fears, saying the policy might cripple their operations; hence they have opted for phased implementation of the scheme.

Already, instructions had been issued for the transfer of bank account balances belonging to nine out of 24 Ministries, Departments and Agencies (MDAs).

The TSA, which is a unified structure of government bank accounts, enables consolidation and optimum utilisation of government cash resources.

It is a set of linked bank accounts through which the government recognises all its receipts and payments and obtains a consolidated view of its cash resources at the end of each day.

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 present administration was determined to do it.

Business Hilights recalls that similar situation occurred in the build up to the policy in Nigeria as former administration failed to kick start the scheme in February 2015, but was jump started by the current government on September few months after inauguration same year.

The Vice President, who is the head of federal economic policy development, was of the view that Ghanaian government alone could not do it and called for support from stakeholders, including the commercial banks to ensure the success of the policy.

In a statement issued by Ghana News Agency (GNA), Dr Bawumia said “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,”

According to Bawumia, “the goal of the TSA was not only meant to give government a consolidated view of its cash resources but to ensure efficient treasury management as required under the cash management reform initiatives”.

Earlier, the Minister of Finance, Mr Ken Ofori-Atta, said the launch of the TSA followed the commitment of government to enforce the Public Financial Management Act, 2016, which established the TSA.

He noted that the transfer of the bank accounts of all government institutions to the Central Bank was to ensure the ease of management and monitoring as an estimated GH¢5 billion were with the commercial banks as government deposit.

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.

In his further argument, 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 noted that “Out of 190 accounts of the nine MDAs (Ministries, Departments and Agencies), bank balances standing in 36 of these accounts have been transferred to Bank of Ghana”.

While revealing that at August 7, GH¢89.668 million has been transferred from the commercial banks to Bank of Ghana, the minister disclosed that “the TSA would eventually lower actual borrowing and reduced pressure on short-term yields and ensured that MDAs funding needs were met in a timely manner for efficiency and effectiveness”.

In confirmation of the Minister’s position, the Controller and Accountant General, Mr Eugene Ofosuhene, said the adoption of the TSA would not have any adverse effect on commercial banks.

He said “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 individual basis”.

Though the President of the Association of Bankers, Mr. Alhassan Andani, said his members were in full support of the TSA implementation, they stressed that implementing it in phases will caution the adverse effects and the attendant liquidity exposures to some banks that rely so much on government deposits.


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