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Project Topic:

THE IMPACT OF TREASURY SINGLE ACCOUNT ON FINANCIAL PERFORMANCE OF BANKS IN NIGERIA BEFORE AND AFTER APPRAISAL APPROACH

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 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 70 ::   Attributes: Secondary data, Data Analysis,abstract, table of content, references ::   429 people found this useful

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CHAPTER ONE

  1. INTRODUCTION

1.1   BACKGROUND OF STUDY

The banking sector is the engine of any nation's economy. The economic status of any nation depends on how stable their banking industry is. In other words, any issue that affects banks also has an impact on the economy of the nation (Kanu, 2016). In Nigeria, commercial banks have been the custodians of government funds. The banking system in Nigeria has experienced several reforms and policies, some favourable, others unfavourable. Many banks did not survive these reforms. Until the introduction of TSA, government Ministries, Departments and Agencies (MDA’s) operated a multiplicity of accounts in the commercial banks.

Treasury Single Account (TSA) is a financial policy used in several countries all over the world. It was introduced by the federal government of Nigeria in 2015 to consolidate all inflows from all agencies of government into a single account at the Central Bank of Nigeria. TSA was introduced so as help to monitor the government revenue, and also stifle the corruption in Nigeria. TSA is a relatively new public accounting system; it uses a single account or a set of linked accounts by the government. The primary purpose is to control the government revenue and make sure that all the payments have been made through a Consolidated Revenue Account (CRA). The introduction of treasury single account is as a result of numerous corrupt practices that exist in Nigeria, such as lack of transparency and accountability (Kano, 2016).

The policy was introduced to reduce the proliferation of bank accounts operated by ministries, Departments and Agencies (MDAs) and also to promote transparency and accountability among all organs of the governments to ascertain the amount that is accruing to its accounts on a daily basis. It is a financial tool that unifies all government accounts in a single pool for effective cash management (Odewole, 2016).

TSA is believed to be an efficient and effective means of managing government revenue generation and system that provide and enforce sufficient self–control mechanism on revenue generation and budget implementation using a daily return from account balances of various MDAs into a central account (Adebisi & Okike, 2016). However, since the implementation of Treasury Single Account, it is still unclear on how the new system has affected federal government revenue specifically, and the country’s economic growth at large. It is against this background that we are motivated to examine the impact treasury single account has on revenue generation and economic growth in Nigeria.

The TSA is a Unified structure of government bank accounts enabling consolidation and optimal utilization of government cash resources. Through this bank account or set of linked bank accounts, the government transacts all its receipts and payments and gets a consolidated view of its cash position at any given time (Yusuf, 2016).

Prior to the introduction to TSA, Nigeria had fragmented banking arrangement for revenue and payment transactions. These were more than 10,000 bank accounts in multiple banks which made it impossible to establish government consolidated cash position at any point in time. It led to pockets of idle cash balances held in MDA’s account when government was out borrowing money (Obinna, 2015). (Yusuf, 2016) added that “the maintenance of Treasury Single Account will help ensure proper cash management by eliminating idle funds usually left with different commercial banks and in a way enhance reconciliation of revenue collection and payment

1.2   STATEMENT OF THE PROBLEM

According to Adeolu, (2015)Treasury single account is a public accounting system in which all revenue, receipts and payment of the government are collected into a single account, which is usually maintained by the central bank of a country and payments are done through the same account.  The emergence of treasury single account in Nigeria economy has led to liquidity problem and has stifled growth in the banking sector, because banks that earlier made bulk of their revenue from the numerous MDAs accounts scattered in all deposit money banks in Nigeria, will no longer be able to do that. This has compelled banks to device new means of mobilizing funds from private sector and to focus on their core banking functions such as savings aggregation and financial intermediation. However, because of the huge dependence of most banks on this revenue from government it has been very difficult to survive mainly on the core banking functions and this has made most of them to suddenly retrench large number of their staffs and also affected the level of liquidity in the banks. Their argument was that bank that fails to do so will no longer be profitable, and eventually lead to more downsizing of staff and increase in unemployment in the country. It will also cause the exchange of naira to the world major currencies to appreciate as excess liquidity will be mopped up from the system, thereby leading to instability in various sectors of the economy.

Finally, several researches has been carried out on the impact of treasury single account but not even a single research has been carried out on the impact of treasury single account on financial performance of banks in Nigeria before and after appraisal approach.

1.3   AIMS AND OBJECTIVES OF STUDY

The main aim of the study is to determine the impact of treasury single account on financial performance of banks before and after appraisal approach. Other specific objectives of the study include:

  1. to determine the effect of treasury single account on financial performance of banks
  2. to determine the factors affecting treasury single account.
  3. to determine the extent to which treasury single account affects bank performance in Nigeria.
  4. to proffer solutions to the problems.

1.4   RESEARCH QUESTIONS       

  1. What is the effect of treasury single account on financial performance of banks?
  2. What is the factors affecting treasury single account?
  3. What is the extent to which treasury single account affects bank performance in Nigeria?
  4. What are the solutions to the problems?

1.5   STATEMENT OF RESEARCH HYPOTHESIS

H0:    there are no variations in the performance of Nigeria banks before and after appraisal approach of treasury single account

H1: there are variations in the performance of Nigeria banks before and after appraisal approach of treasury single account

1.6   SIGNIFICANCE OF STUDY

The result from this study would go a long way to enlighten the policy makers and the government on the impact of TSA on the banking system and would also serve as an input and guide to policy formulation. Because this topic is reasonably new, it would help the public understand fully the impact of TSA, it pros and cons and its effect on the economy. Finally, the study will contribute to the body of existing literature and knowledge to this field of studies and basis for further research.

1.7   SCOPE OF STUDY

        The study on the impact of treasury single account on financial banks is limited to Nigeria.

1.8   LIMITATION OF STUDY

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.9   DEFINITION OF TERMS

Impact:   A marked effect or influence.

Treasury Single Account: It is an essential tool for consolidating and managing governments’ cash resources, thus minimizing borrowing costs.

Bank: Is a financial institution that accepts deposits from the public and creates credit.

 

 

 

 

 

 

REFERENCES

Akande, L. (2015), “Buhari orders Federal Ministries, Agencies to open Treasury Single Account”, Press Release, August 9

Agbakoba, O. (2016). Federal Government to return all monies from the TSA to Banks. Premium newspaper, Sep. 28, P21

Ali Hashim and Allister J. Moon, “Treasury Diagnostic Toolkit, Worldbank working paper #19,2004 Biago Bossone and MassimoCirasino, The oversight of the payments systems; A framework for the Development and Governance of payment systems in Emerging Economies, worldbank Report, july 2001 Central Bank of Nigeria (2014), “Communique No. 94 of the Monetary Policy Committee Meeting”, March 24- 25, pp 1 – 37

Collins, J. and Hussey, R. (2003) Business Research a practical guide for undergraduate and Post-graduate students, 2 nd Ed. New York, Palgrave Macmillan Eme, O. I., Emmanuel, N. I. and Chukwurah, D. C. (2015). Analysis of pros and cons Treasury Single Account policy in Nigeria. Arabian Journal of Business and Management Review (OMAN Chapter), Vol. 5, No. 4, Nov, 2015, Pp 20-39 Garbade, K. D. et.al, 2004). Fundamentals of Financial Management (11th edition), Delhi: Pearson Education, Inc. James A. and Moses A. (2012). Impact of Tax Administration on Government Revenue in a Developing Economy – A Case Study of Nigeria. International Journal of Business and Social Science. Vol. 3 No 8, Pp 105 Larson, M. C. (2007). Local Government Cash Management, Chapter 2 in Local Public Financial Management, ed. by Anwar Shah, The World Bank. Ocheni, K. D. (2016). Treasury Single Account: A catalyst for public financial management in Nigeria. A paper presented at a workshop organised by Association of National Accountants of Nigeria (ANAN), International Federation of Accountants (IFAC), Office of the Accountant-General of the Federation (OAGF) and The World Bank in Abuja Publication of Public Expenditure and Financial Accountability (PEFA) Framework, May 2006. Open knowledge.worldbank.org: Implementation of Treasury Single Account and Strengthening of Cash Management in Vietnam- Open Knowledge Repository Sailendra P. & Israel F. (2010). Treasury Single Account: concept, design, and implementation Issues. IMF working paper, WP/10/143. Schmitz, Stefan W. and Geoffrey E. Wood, (2006), “Institutional Change in the Payments Systems and Monetary Policy – An Introduction, “in Institutional Change in the Payment System and Monetary Policy, ed. By Stefan W. Schmitz and Geoffrey E. Wood (Routledge) Sekaran, U. and Bougie, R. (2010) Research Methods for Business: A Skill building Approach, 5 th ed. West Sussex, UK. John Wiley & Sons Lt Stephen, O. (2016). Treasury Single Account: a catalyst for public financial management in Nigeria. A paper presented at a workshop organized by Association of National Accountants of Nigeria (ANAN), International Federation if Accountants (IFAC), Office of the Accountant General of the Federation (OAGF) and the World Bank in Abuja. Extracted from www.thenationonlineng.net/treasury-singleaccount-a-catalyst-for-public-financial-management-in-nigeria/ Sun Editorial (2015), The new Treasury Single Account August 25, P 17 The Stalwart Report. Extracted from web on: http://thestelwartreport.com/understanding-the-treasury-singleaccount-tsa-system-things-you-should-know/ Vanguard Editorial (2015), Treasury Single Account: Bank deposits loss may hit N2tr, August 17, p. 18 White, L. H. (2006). Payments System Innovations in the United States since 1945 and their Implications for Monetary Policy,” Chapter 1 in Institutional Change in the Payment System and Monetary Policy, ed. by Stefan W. Schmitz and Geoffrey E. Wood (Routledge). Yusuf, I. A and Chiejina, N. (2015), “Anti-Graft War: One Economy, One Account”, Sunday Nation, August 16, Pp. 9 – 10 & 71.

 


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Paper Information

Format:ms word
Chapter:1-5
Pages:70
Attribute:Secondary data, Data Analysis,abstract, table of content, references
Price:₦3,000
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