Accounting Project Topics

Effect of Treasury Single Account on the Financial Performance of Nigeria Bank (a Case Study of Access Bank Ilorin)

Effect of Treasury Single Account on the Financial Performance of Nigeria Bank (a Case Study of Access Bank Ilorin)

Effect of Treasury Single Account on the Financial Performance of Nigeria Bank (a Case Study of Access Bank Ilorin)


Objectives of the Study

The study has the following objective:

To examine the effect of (TSA) Deposit Withdrawal on liquidity performance of deposit money Banks in Nigeria.



Conceptual Framework

Conceptual framework Revenue

Section 162 (10) defines „Revenue‟ as „any income or return accruing to or derived by the Government of the Federation from any source and includes:

any receipt, however described, arising from the operation of any law;

any return, however described arising from or in respect of any property held by the Government of the Federation;

any return by way of interest on loans and dividend in respect of shares or interest held by the Government of the Federation in any Company or Statutory body‟.

 Conceptualizing TSA

Mba (2015) described TSA as a system of Aggregative Financial Inclusion, being a nationally organized and particular way of connecting all and divergent federating units on 3-by-3 matrix, Federal – State – Local governments and their respective Ministries, Departments and Agencies (MDAs), to account for all their incomes and revenues via TSA Designated bank accounts with Deposit Money Banks (DMBs) and channeling and consolidating same to Consolidating Single Account with Central Bank of Nigeria.

Similrly, Pattanayak & Fainboim (2010) opined that TSA is a unified structure of government bank accounts that gives a consolidated view of government cash resources. Based on the principle of unity of cash and the unity of treasury, a TSA is a bank account or a set of linked accounts through which the government transacts all its receipts and payments. The principle of unity follows from the fungibility of all cash irrespective of its end use. While it is necessary to distinguish individual cash transactions for control and reporting purposes, this purpose is achieved through the accounting system and not by holding/depositing cash in transaction specific bank accounts. This enables the treasury to delink management of cash from control at a transaction level. They further highlighted three essential features of a full-fledged TSA thus:

  • First, the government banking arrangement should be unified, to enable ministry of finance (Mof) (or treasury) oversight of government cash flows in and out of these bank accounts. A unified structure of government bank accounts allows complete fungibility of all cash resources, including on a real- time basis if electronic banking is in place. The TSA structure can contain ledger sub-accounts in a single banking institution (not necessarily a central bank), and can accommodate external zero balance accounts (ZBAs) in a number of commercial
  • Second, no other government agency operates bank accounts outside the oversight of the treasury. Options for accessing and operating the TSA are mainly dependent upon institutional structures and payment settlement systems (see the section on Transaction Processing under a TSASystem).

Third, the consolidation of government cash resources should be comprehensive and encompass all government cash resources, both budgetary and extra-budgetary. This means that all public monies irrespective of whether the corresponding cash flows are subject to budgetary control or not (e.g., in the case of reserve funds, earmarked funds and other off-budget/extra budgetary funds) should be brought under the control of the TSA. The cash balance in the TSA main account is maintained at a level sufficient to meet the daily operational requirements of the government (sometimes together with an optional contingency, or buffer/reserve to meet unexpected fiscal volatility)




Research Design

The research design for this study was ex-post facto design. This is used for descriptive studies in which the researcher seeks to measure and discover causes even when he cannot control the variables and is not possible or acceptable to manipulate the characteristics of human participant. In other words the design can be seen as a way of describing attitudes, behaviours, situations, opinions or characteristics of people which is relevant to the study at hand. This design helped the researcher to collect the relevant data used to discuss issues extensively about the target population.

Population of the Study

The population for this study focuses on the banking sector, Access bank PLC precisely, amongst other banks for comparison.

CBN is also consulted for data and other vital information



 Data Presentation

The following data were obtained from the Central Bank of Nigeria (CBN). The Liquidity Ratios for the period 2012-2017 were gathered from the CBN-Financial Stability Report 2017 while the data on Federal Government of Nigeria (FGN) total Deposits consisting of Time, Savings and Demand Deposits in the twenty-two (22) Deposit Money Banks were collected through the CBN 2017 Statistical Bulletin- Financial Sector.




Relevant literatures have been reviewed while the results and discussion have also been carefully analyzed. The study then concluded that there is a positive relationship between F.G. Deposits and Access bank liquidity performance in the Pre-TSA era whereas there is a negative relationship between F.G. Deposits and Access bank liquidity performance in the Post-TSA period. Overall, the F.G. Deposit is negatively related to bank liquidity performance, which signifies that as Federal Government deposited funds are withdrawn into the TSA, the banks’ liquidity became chronically and persistently threatened, thereby affecting the banking firms’ financial health and soundness.


Therefore, in line with the findings and the conclusion reached in this study, the following recommendations are made:

The bank managers should aggressively transform unbanked members of the public into bankable individuals for higher liquidity performance of the deposit money banks.

Also, the country’s fund managers should consider a hybrid system of TSA so that minor cash balances that may be left with the commercial banking system could be invested to boost the banks’ liquidity and generate returns on invested funds for the government as well.

Suggestions for Further Research

It is believed that the study has been able to give room for further research due to the fact that the study only explored one explanatory variable, Treasury Single Account  (TSA)  proxied  by the Federal Government Deposit as it affects banks’ liquidity whereas other macro-economic factors such as Gross Domestic Products (GDP), Inflation, Money Supply, Growth in Interest  Rate and Growth in Exchange Rate were excluded in this study.  It is therefore recommended that future researchers who might be interested in this area of study should expand the scope to include other indices not included in this study.


  • Agbo P O, Jugu Y G, Okwoli A A. Effects of Treasury Single Account   on Performance and Survival of Deposit Money Banks in Nigeria. International Journal of Management Science Research (IJMSR). 2016.
  • Ajetunmobi O O, Adesina K, Faboyede S O, Adejana B P. The Impact of Treasury Single Account on the Liquidity of Banks in Nigeria. Journal of Accounting, Finance and Auditing Studies. 2017; 3(3): 132-143.
  • Allen L, Rai A. Operational Efficiency in Banking: An International Comparison. Journal of Banking & Finance. 1996; 20(4): 655-672. doi: 10.1016/0378-4266(95)00026-7
  • Andornimye L. (2017). Impact of Treasury Single Account (TSA) Implementation on Bank Liquidity in Nigeria. Journal of Economics, Business and Management. 4(4). 260-264.
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