In its quest to boost liquidity and deepen its fiscal consolidation measures, government of Ghana launched its Treasury Single Account (TSA) here on Thursday.
The measure will also enable government to manage all deposits of Ministries, Departments and Agencies (MDAs) of the state.
Minister for Finance Kenneth Ofori-Atta said the TSA was necessary to boost government’s fiscal management and prevent payment of interests on government’s own money in deposits which the banks use to purchase Treasury Bills and Bonds.
“Even more damaging to the public purse is the fact that government is borrowing at a high cost while it has positive balances in commercial banks. At the same time, these positive balances are being used to purchase government T-Bills. In effect government is borrowing its own money and paying interest on it,” the minister said.
The new Public Financial Management (PFM) Act enjoins government to create the TSA into which all state institutions should lodge their deposits.
Instructions have been issued for the transfer of 190 accounts belonging to nine MDAs to the central bank, with 36 complying so far.
Acting Controller and Accountant General Eugene Asante Ofosuhene allayed fears of the public that the closure of these government accounts would have adverse effects on the banking sector.
“I can confidently say that pre-feasibility studies and impact assessment that have been conducted prove that the commercial banks will not be significantly impacted both on the aggregate level and on individual basis. The full implementation of the Treasury Single Account is expected to contribute to the improvement in treasury operations and consequently facilitate better service delivery,” he said.
The full implementation of the TSA includes rationalization of government bank accounts with commercial banks and Bank of Ghana; implementation of bank accounts tracking system (B-Tracking); and The investment of government cash balances with both the BoG and commercial banks.
Minister for Economic Planning Prof. George Gyan Baffuor, who performed the launching, pledged a full implementation of the TSA.
“There have been several attempts by successive governments to implement the TSA. But the government of Nana Addo Dankwa Akufo-Addo would implement it and there is no turning back.” Enditem