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FG withdraws accounts in banks

Posted by Oluyinka Akintunde and Tobi Soniyi, Abuja on 2005/08/08 | Views: 361 |

FG withdraws accounts in banks


The Federal Government, on Monday, ordered that all government monies held in various bank accounts in the country should be returned and kept with the Central Bank of Nigeria.

The Federal Government, on Monday, ordered that all government monies held in various bank accounts in the country should be returned and kept with the Central Bank of Nigeria.

The Accountant-General of the Federation, Mr. Ibrahim Dankwambo, who disclosed this in Abuja during a workshop on Public Sector Financing organised by the Chartered Institute of Bankers of Nigeria, however, stated that the directive exempted all recurrent accounts.

The action, he emphasised, was prompted by the state of the government’s Consolidated Revenue Fund, which, he said, had been in debit.

According to him, “It has been discovered by government that while government monies are held in various bank accounts, the Consolidated Revenue Fund account of government with the CBN was always in perpetual debit necessitating high rate of domestic debt.

“Government has directed that all other accounts except the recurrent accounts should be with the CBN.”

Senior officials of various banks attended the workshop.

He said that the government had approved an arrangement with the CBN whereby all its resources would be in a single account called the Treasury Single Account or Central Capital Account.

“This will ensure a situation whereby all monies in the accounts of ministries and agencies are deemed to belong to the government until such funds are disbursed,” he stated.

Analysts said on Monday that the move may put pressure on the banks which rely to a large extent on government deposits.

Dankwambo said that the Treasury Single Account or Central Capital Account would minimise idle cash balances in ministries/agencies capital account, and reduce to the barest minimum the burden of ways and means interest charges.

Other merits of TSA, he stated, would include serving as a measure of control over the capital accounts of ministries/ agencies, and minimising the diversion of capital funds as only the payments that have met the due process certification would be backed.

He emphasised that budgeting and accounting process formulation and implementation must be operated at a higher level of sophistication in order to meet development commitment more effectively and timely.

The accountant-general identified the major challenges involved in public sector financing as inadequate revenue generation to execute projects and meeting recurrent obligations, budget preparation and implementation.

He said, “Central to the issue of revenue is the acceptable revenue allocation among the three tiers of government. Every government at all levels is trying very hard to have access to a larger share of the available resources.

“This has, however, assumed a serious dimension such that little or no attention is devoted to internally-generated revenue.”

He stated that the present administration had put a lot of reforms in place to strengthen the federal government’s budget system by ensuring that transparency and accountability were embedded in the budget process.

The PUNCH, Tuesday, August 09, 2005

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Fay(Katy, Texas, US)says...

Actually translates to bravehearted.