The Chartered Institute of Bankers of Nigeria (CIBN) has stressed the need for Nigerians to continue to support the Treasury Single Account (TSA) policy.
The President of CIBN, Prof. Segun Ajibola, who made the observations at a recent TSA retreat in Abuja, described the TSA as a tool for fighting the hydra headed corruption in public and private sectors.
He however, sought the extension of the initiative to other areas of the country where “parasites, pests and locusts still operate freely” and feeding fat on the commonwealth.
Ajibola said the institute was aligned to the spirit and letter of the initiative.
He recommended that government should intensify efforts in the on-going restructuring of the economic environment, particularly in staying away from business ownership.
“Privatisation of government ownership in critical sectors of the economy – oil drilling and exploration, oil refinery, transportation, iron and steel, shipping and admiralty would leave government with less cash to ponder about,” he added.
“It is often said that government has no business being in business. And that the business of government is to maintain law and order, create conducive atmosphere for business to thrive and evolve governance rules. Banking it should be noted, is both supply-led and demand-following business.
“Bankers would always struggle to operate a template that would pull cash from whoever the holders are, and that has been the problem over the years. If governments continue to account, directly and indirectly, for about 60 per cent of the country’s GDP, this will be too significant for banks to ignore.
“As it is, the public funds pulled out of the banks are in a way sterilised at the moment. The economy is presently in dire need of some element of reflation at to assure growth and by extension development. Elementary economic principle tells us that the impact of money stock on economic performance of any country is a function of the velocity of that money stock over a period of time.
“There are several ways TSA funds could be applied to achieve this – infrastructural financing, public private partnership, etc.. The challenge with the various intervention funds revolves around the question as to who bears the credit risk associated with such concessionary lending! Which perhaps is the main reason why banks shun such credit windows,” he added.
He noted that one of the key mandates of CIBN was to promote ethics and professionalism among banking and finance practitioners in Nigeria, corporate and individuals.