Nigerian banks would be losing about N2 trillion deposits to the Central Bank of Nigeria (CBN) following the implementation of the Treasury Single Account (TSA) in compliance with last week’s order by President Muhammadu Buhari.
According to the directive from the Presidency, the implementation of the TSA by all ministries, departments and agencies (MDAs) is to enable compliance of MDAs with the provisions of the constitution. This is also in line with the Presidency’s directives to the National Economic Council (NEC) to ensure full compliance of MDAs to relevant laws on accounting, allocation and disbursement of public funds.
In a statement, weekend, Afrinvest Group, a Lagos-based financial investment house, “Whilst the directive issued came as the first official statement by the Presidency on the TSA, the Nigerian National Petroleum Corporation, NNPC, had earlier began withdrawing its funds from banks for retirement into CBN.
“This had an impact on liquidity level in the banking system, resulting in a surge in money market rates during the period as banks scrambled for funds to cover their liquidity positions.
“With the TSA implementation now extended to all federal MDAs, the Nigerian banking industry, on an aggregate basis, would be affected in terms of deposits and funding cost structure.”