A Review of the Nigerian Energy Industry

Nigeria: Govt exempts NNPC, PHCN, 12 others from TSA

Central Bank of Nigeria, CBN.
*Central Bank of Nigeria, CBN.

Oscarline Onwuemenyi

22 September 2015, Sweetcrude, Abuja – The Federal Government yesterday exempted the Nigerian National Petroleum Corporation (NNPC) and twelve other Ministries, Departments and Agencies (MDAs) from the Treasury Single initiated at the beginning of President Muhammadu Buhari’s government to curb incidence of agencies owning multiple accounts for the purpose of keeping, and thus curbing corruption.

The announcement which came from the Office of the Accountant-General of the Federation described these agencies as profit-oriented government business entities that pay dividends to the Federal Government.

The exempted MDAs include the Nigeria National Petroleum Corporation, Power Holding Company of Nigeria, Bank of Industry, Nigeria Railway Corporation, Federal Mortgage Bank of Nigeria, Bank of Agriculture, Niger Delta Power Holding Company /National Integrated Power Project, National Communication Satellite Limited, Galaxy Backbone Ltd, Ajaokuta Steel Company Ltd, Urban Development Bank, Nigerian Export-Import Bank and Transcorp Hilton Hotel.

The validation for this information comes vide a circular from the AGF’s office to The Director, Central Bank of Nigeria, Banking and Payments System Department, referenced FD/LP2015/C/ADC/20/1/ /DF dated September 14, 2015 and authored by M. K, Dikwa, for the Accountant- General of the Federation, Federal Ministry of Finance, Funds Department, Abuja.

The circular titled “Approval to Exempt Some MDAs In line With the E-Collection Mop-Up Exercise” reads in part “Approval is hereby granted to your bank to exempt the Accounts of thirteen (13) MDAs (Category 6) as listed below the mop-up in line with the e-Collection Circular No. HCFSF/428/S.1/120 dated 7th August 2015 as these are Profit Oriented Government Business entities that are to pay their dividends into the Treasury Single Accounts whenever they are declared.

“Please note that in line with the Presidential approval, the following as it relates to Nigeria National Petroleum Corporation NNPC as listed above (S/No.9) under Category 4 should also apply:

“That NAPIMS remains classified as an MDA that is funded from the Federation Account under Category 4 of the Circular, being the NNPC Business Unit responsible for the management of the Federation’s investment in the upstream activities and funded from direct proceeds of oil and gas revenue.

“That NNPC will continue to preserve the status with respect to NAPIMS Operations Account as well as Escrow Account for Third Party Financing in view of the Joint Venture (JV) Cash funding currently being experienced.

“That all other NNPC’s commercial/Business Entities as re-classified as ‘Profit-Oriented Public Corporations /Business Enterprises’ under Category 6 of the Circular which requires that only dividends from these entities be paid into the TSA.”

It would be recalled that President Muhammadu Buhari ordered MDAs to pay all government revenues, incomes and other receipts into a TSA with the Central Bank of Nigeria (CBN) on or before September 15 in compliance with Sections 80 and 162 of the 1999 Nigerian Constitution.

“Henceforth, all receipts due to the Federal Government or any of its agencies must be paid into TSA or designated accounts maintained and operated in the Central Bank of Nigeria, except otherwise expressly approved,” the presidential directive stated.

It explained that the directive would end the previous public accounting situation of several fragmented accounts for government revenues, incomes and receipts.

According to government officials, the existing system had led to loss of legitimate income meant for the Federation Account, and that the directive applied to fully-funded organs of government like ministries, departments, agencies and foreign missions, as well as the partially-funded ones, including teaching hospitals, medical centres and federal tertiary institutions.

“For any agency that is fully or partially self-funding, sub-accounts linked to TSA are to be maintained at CBN and the accounting system will be configured to allow them access to funds based on their approved budgetary provisions,” the statement explained.

The TSA is a unified structure of government bank accounts enabling consolidation and optimal utilisation of government cash resources. It is a bank account or a set of linked bank accounts through which the government transacts all its receipts and payments and gets a consolidated view of its cash position at any given time.

In this article

Join the Conversation