TSA, BUDGET DEFICIT , BUDGET PADDING & THE FALLACIES
My friend Lai Mohammed is running the risk of losing some of his followers and becoming difficult to believe.Following his translation from the Spokesperson of a Fiery party( APC) to the Spokesman of all Parties( Nigerians) as Minister of Information and Culture, I had given advice to him in this column to try and shed his extreme partisan toga. He was a great party spokesperson but he needs to be a great spokesperson for Nigeria. The two require different skills and slant. I just hope he found time to read the piece. I knew that the transition was not going to be easy, but I just hope and pray that he will continue to try. I also know that some level of propaganda and spin are inescapable in the job of National information management, but it is critical that he knows where to draw the line. I wish that he will leave partisan matters to the party spokesperson. Or is he combining both jobs? If so, It will be nice for APC to appoint its partisan spokesperson, so that Lai can focus on serving Nigerians- partisan and not. Secondly, it will be helpful if he leaves clarifying or defending the President to the Presidential media team of Femi Adesina and Garba Shehu. I find him trying to do all and I am getting worried that he may wear himself out too soon. Lai should do his best to try and stand with the people of Nigeria at least most of the time, telling them the untainted truth so that he will remain believable over a long time. It will be tragic to have a minister of information whose pronouncements will often be discounted or discredited or seen as only speaking for his party. Our National Minister of Information though belonging to a Party should always be believable to all Nigerians.
When the story of the padding of the 2016 budget broke, with minister after minister, including Lai himself denying the figures that they were asked to defend at the National Assembly, Lai turned around to tell Nigerians that there was nothing like padding. That because the total sum of figures in the budget equalled 6.08 Trillion Naira, it was wrong for anybody to talk of padding the budget. But last week, President Muhammadu Buhari in his characteristic candour admitted to the entire world that the budget was really padded and promised to deal with the 'padders'. That is why the President will retain the respect of many for a long time. He speaks his mind and the truth as he sees it,even if the truth may not be convenient always. He comes clean with Nigerians and non Nigerians. He said that he would not treat those who gave him 95% votes as those who gave him only 5%. That was not convenient, but that's the truth as far as he was concerned. He goes abroad and informs the World of the level of corruption in Nigeria, that's not convenient, but thats the truth as he see's it. Infact some people are not happy with that, saying that the President is de-marketing Nigeria. May be, but as the Bible says only the Truth can set us free.
What I believe is that we need knowledgable, sincere and courageous advisers who will tell the President the truth and the correct position of things so that when he speaks, he will not only speak the truth which is natural with him but the truth will represent the correct state of things. One place, I suspect that the President is not being presented with all the facts is the matter of the Treasury Single Account( TSA). I have heard him say many times that the money now sterilized in the TSA was money Public and Civil servants hid somewhere waiting for the year to end and then they would sign them off in cheques for their private uses. I am neither a public nor a civil servant, but I do not think that is the full story. Again there is the popular view that most of the money in the TSA was hidden money. I ask hidden by who and where? The fact as I understand it, is that the Ministries,Departments and Agencies (MDAs) of Government which I understand number up to 900 had several accounts in different commercial banks. Most of those accounts were opened with the approval of the office of the Accountant-General.Those accounts were opened in the names of the various government agencies and both the Banks and the CBN knew those accounts existed, reported on them regularly and the MDAs transacted legitimate government businesses with these accounts. Now government asked them all to transfer all the money in the different accounts to one single account in the central Bank. And most if not all have complied. And this includes both money earned on behalf of government by those MDAs that earn revenue for government and the appropriated money for projects and programs,hitherto released to the MDAs. Therefore to give the impression to Nigerians or the whole World that the 2.5 Trillion Naira now domiciled in the TSA was money that was already lost or hidden to be stolen will not represent the true reality. Iam not saying that some fraction of it may not have been put away for some ignoble intention or objective but I believe that most of the money now locked up in the TSA can not be so categorized. As long as they remain sterilized, the money in the TSA will continue to increase because some of the MDAs earn daily or regular income which now flows directly into the TSA. So it is no mystery that the figure is growing!
Another area I believe that the President needs to be properly and truthfully advised, is in relation to the recent statement by the President that with the money in the TSA, our deficit is wiped out. I would have jumped up and shouted Alleluia, if this were exactly so. My thinking is that some of the money in the TSA is money already committed to ongoing projects. I can bet that some of the money in the TSA is money owed contractors and other vendors for jobs already done. I feel that before we can determine how much of our deficit in the 2016 budget that can be wiped out by the cash in the TSA, we need to discount current liabilities tied to the TSA. Otherwise we may only wipe out one deficit and create a new one simultaneously. For sure the TSA is good policy but it is not a perfect policy. I had drawn attention to its downsides in a previous despatch. Its ability to present a bird's eye view of Goverment's cash flow is unparalleled and will at least in the short run prevent government from borrowing from banks when it has apparently' idle'money lodged in another account in the bank. But it presents an administrative nightmare which must be astutely managed to prevent a situation where one has money in his account and yet his children are sent away from school because of default in school fees or his family has no food to eat or can not pay house rent. Many MDAs are in this kind of situation now!
There is a lot of work for our information managers to ensure that the people of Nigeria and indeed the whole World are told the truth about our Country in the most positive and beneficial manner. Elections are over and so partisanship and propaganda must be minimized. Much more work is required to keep the President properly briefed with the true, correct and current situations and reality,so that when he speaks, we will not go through the painful process of trying to explain what he actually said or meant. Or at the worst, trying to contradict the President or the President contradicting his minister of Information.
When the story of the padding of the 2016 budget broke, with minister after minister, including Lai himself denying the figures that they were asked to defend at the National Assembly, Lai turned around to tell Nigerians that there was nothing like padding. That because the total sum of figures in the budget equalled 6.08 Trillion Naira, it was wrong for anybody to talk of padding the budget. But last week, President Muhammadu Buhari in his characteristic candour admitted to the entire world that the budget was really padded and promised to deal with the 'padders'. That is why the President will retain the respect of many for a long time. He speaks his mind and the truth as he sees it,even if the truth may not be convenient always. He comes clean with Nigerians and non Nigerians. He said that he would not treat those who gave him 95% votes as those who gave him only 5%. That was not convenient, but that's the truth as far as he was concerned. He goes abroad and informs the World of the level of corruption in Nigeria, that's not convenient, but thats the truth as he see's it. Infact some people are not happy with that, saying that the President is de-marketing Nigeria. May be, but as the Bible says only the Truth can set us free.
What I believe is that we need knowledgable, sincere and courageous advisers who will tell the President the truth and the correct position of things so that when he speaks, he will not only speak the truth which is natural with him but the truth will represent the correct state of things. One place, I suspect that the President is not being presented with all the facts is the matter of the Treasury Single Account( TSA). I have heard him say many times that the money now sterilized in the TSA was money Public and Civil servants hid somewhere waiting for the year to end and then they would sign them off in cheques for their private uses. I am neither a public nor a civil servant, but I do not think that is the full story. Again there is the popular view that most of the money in the TSA was hidden money. I ask hidden by who and where? The fact as I understand it, is that the Ministries,Departments and Agencies (MDAs) of Government which I understand number up to 900 had several accounts in different commercial banks. Most of those accounts were opened with the approval of the office of the Accountant-General.Those accounts were opened in the names of the various government agencies and both the Banks and the CBN knew those accounts existed, reported on them regularly and the MDAs transacted legitimate government businesses with these accounts. Now government asked them all to transfer all the money in the different accounts to one single account in the central Bank. And most if not all have complied. And this includes both money earned on behalf of government by those MDAs that earn revenue for government and the appropriated money for projects and programs,hitherto released to the MDAs. Therefore to give the impression to Nigerians or the whole World that the 2.5 Trillion Naira now domiciled in the TSA was money that was already lost or hidden to be stolen will not represent the true reality. Iam not saying that some fraction of it may not have been put away for some ignoble intention or objective but I believe that most of the money now locked up in the TSA can not be so categorized. As long as they remain sterilized, the money in the TSA will continue to increase because some of the MDAs earn daily or regular income which now flows directly into the TSA. So it is no mystery that the figure is growing!
Another area I believe that the President needs to be properly and truthfully advised, is in relation to the recent statement by the President that with the money in the TSA, our deficit is wiped out. I would have jumped up and shouted Alleluia, if this were exactly so. My thinking is that some of the money in the TSA is money already committed to ongoing projects. I can bet that some of the money in the TSA is money owed contractors and other vendors for jobs already done. I feel that before we can determine how much of our deficit in the 2016 budget that can be wiped out by the cash in the TSA, we need to discount current liabilities tied to the TSA. Otherwise we may only wipe out one deficit and create a new one simultaneously. For sure the TSA is good policy but it is not a perfect policy. I had drawn attention to its downsides in a previous despatch. Its ability to present a bird's eye view of Goverment's cash flow is unparalleled and will at least in the short run prevent government from borrowing from banks when it has apparently' idle'money lodged in another account in the bank. But it presents an administrative nightmare which must be astutely managed to prevent a situation where one has money in his account and yet his children are sent away from school because of default in school fees or his family has no food to eat or can not pay house rent. Many MDAs are in this kind of situation now!
There is a lot of work for our information managers to ensure that the people of Nigeria and indeed the whole World are told the truth about our Country in the most positive and beneficial manner. Elections are over and so partisanship and propaganda must be minimized. Much more work is required to keep the President properly briefed with the true, correct and current situations and reality,so that when he speaks, we will not go through the painful process of trying to explain what he actually said or meant. Or at the worst, trying to contradict the President or the President contradicting his minister of Information.
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