Minister of Finance and the TSA

Minister of Finance and the TSA

February 22, 2016

Mrs Kemi Adeosun
"It is far more honourable to admit one's mistake than to let matters proceed to the irrevocable." – Leo Tolstoy, 1828-1910. VANGUARD BOOK OF QUOTATIONS, VBQ, p 161.
Only God never makes mistakes; but, He also regretted creating man.
President Buhari committed a blunder which is costing his government and Nigeria dearly early in his tenure. And, it cannot now be changed. Was it not Agathon, 447-401? BC, who had truthfully but irreverently told us that "Even God cannot change the past"? When Buhari delayed the appointment of his Ministers, dismissing them as "noisemakers", he not only demonstrated his contempt for those he was about to select but his own ignorance about how government works in a democracy. Today, the charade over the 2016 budget playing out in various committees of the National Assembly, NASS, represent the inevitable consequences of Buhari expecting his own Ministers to perform a task which had defeated other cabinets, given five months, in one month. Mr President, asked for this mess. Even a team made of geniuses could not have succeeded.
At the time, his spokespersons, appointed and intruders, told the critics of his "go-slow" approach to go to hell. The President we were told was trying to avoid the mistakes of his predecessors by appointing only credible people into those positions. Know-nothings all of them, they forgot there was a 2016 budget to be laid before the NASS by November and it requires a lot of time to prepare a national budget and it must be done with the participation of the people who would implement it. Buhari has never had any competence in budgeting; his Vice President, although a bit better, was also severely handicapped. Instead of admitting his limitations and forming a cabinet, the old General stubbornly kept to his deadline. He must admit he made a blunder given the circus shows at the NASS involving his officials. One Minister disclaimed his budget; another asked to be allowed back to provide more details and one agency simply copied verbatim the 2015 budget. Buhari asked for it.
Of all the Ministers in any government, one is expected to get the facts right when it comes to figures in the budget. The official encyclopedia of any government when it comes to money is the Minister of Finance, the Treasury Secretary of Chancellor of Exchequer. To reach that height in modern days, one needs a lot more than just character; one needs a mountain-load of competence as well. For a nation's Chief Financial Officer, integrity is only a fraction of the attributes required. Intelligence, towering intelligence, counts far more. And some exposure to international financial institutions is now becoming almost indispensable as well.

To be candid, compared to some her predecessors, Olu Falae, Kalu Idika Kalu, Chuks Okongwu and, yes, Okonjo-Iweala, the current holder of the nation's purse seems lightweight and slightly insufficiently experienced. That is not an insult. Few people who had served only as state commissioners of finance can handle the job. Their functions at the state level are closer to that of the Cashier of a large company than the Group Financial Director. Mostly they collect funds, bank them and dispense as the Governor dictates. That is not adequate preparation for the top job at the Federal Ministry of Finance. But, Buhari wanted a "Saint"; he probably has one. Her competence and grasp of the issues that the Finance Minister, FinMin, are becoming suspect.

Mrs Kemi Adeosun raised alarms in every corner of the globe, among financial experts on Monday, February 8, 2016, when at a workshop on the Treasury Single Account, TSA, she claimed that the Federal Government is to cut borrowing by N1.84 trillion through TSA recovery. It was a fallacy, which, had it been uttered by Alhaji Lai Mohammed, would have been dismissed as another one of the Information Minister's penchant for not being able to distinguish between truth and "rumour". Although Adeosun also padded, to use the latest addition to Abuja vocabulary, the fallacy with nice sounding words, they were designed to lure the unwary. Read what she said.
"The global economic challenges, which are affecting our nation, demand optimum efficiency in the management of public funds. These objectives require an overhaul of the financial management approaches adopted to meet financial obligations on time and ensure that cost effective financial support is provided to public institutions." Good grammar, but, what does it mean? If her comments on the "savings" from TSA serves as a guide to her understanding of what public finance is all about, then she is not only totally mistaken, she will lead the government and Nigeria astray. A little knowledge is always a dangerous thing.

Several facts contradict her position on TSA; but, two will be sufficient for now to illustrate how fallible she is. First, TSA is not new. At least two governments have tried it in the past, usually when the country finds itself in the predicament we face now. Then, governments (IBB's for example) introduce TSA to bring all the Federal government funds residing in various accounts to the Central Bank. Very few savings are involved – except by reducing the slush funds available for top officials to place on fixed deposits to generate income for themselves. Invariably, the introduction of TSA soon creates many problems of its own. That explains why it is soon discarded once the economic emergency calling for it has passed. The reason is simple, TSA slows the usually slow pace of government almost to a standstill!
For the second reason why the Minister should not be taken seriously, permit me to draw attention to what Mr Adebayo Onabolu, wrote as a rejoinder in PUNCH, February 12, 2016, page 21.
"However, the claim that N2.2tn has been saved because of TSA is the most ludicrous statement ever made in recent years. The fact is that most of the monies which were transferred from commercial banks to the Central Bank of Nigeria were mostly monies for ongoing contracts, legitmate treasury investments of various government-owned funds and a little bit of independent revenues of agencies like the Federal Airport Authority of Nigeria. Definitely, not savings.
That is why the Ministries, Departments and Agencies are unable to pay thousands of contractors….If the government has N2.2tn in savings, then why is it trying to borrow N2tn to fund the 2016 budget."
The case could not have been better made. And, it points to the possibility of another mistake Buhari might have made. He can have his "saints" as Ministers; but, they better be competent as well. So far, no Minister has even demonstrated a spark of aptitude. Is this the change?
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