The government is closer to achieving its aim of having a single account as it has managed to close down 1,985 of its accounts out of the 4,000 it holds with some banks .
Following the closures, the monies have been successfully transferred into a single account at the Bank of Ghana.
This is to enable the government manage its funds better to ensure fiscal prudence and also meet a requirement by the International Monetary Fund (IMF).
It is also expected to prevent the situation where the government’s funds lie idle with the commercial banks, while it sometimes borrows the same funds from the banks with an interest to finance the budget.
This was disclosed when officials of the Ministry of Finance appeared before the Parliamentary Select Committee to justify its budget estimates for the 2018 fiscal year.
The committee was also informed that the whole TSA process is expected to be completed by the end of 2018.
Established under the Public Financial Management Act, 2016, (Act 921), TSA is a unified structure of government bank accounts which enables the consolidation and optimum utilisation of government cash resources.
It is meant to provide government with a consolidated view of its cash resources and to ensure efficient treasury management as required under the cash management reform initiative.
Under the law, the Controller and Accountant-General is mandated by the Minister of Finance to implement the TSA which requires the transfer of the bank accounts of all government institutions to the Central Bank for ease of management and monitoring.
Liquidity in banking sector
Some economists have, however, raised issues over the closure of government’s accounts at the commercial banks, arguing that it would drain liquidity in the banking sector.
The Chairman of the Finance Committee, Dr Mark Assibey Yeboah, in an interview with the GRAPHIC BUSINESS said the successful roll out of the TSA would affect the bank’s negatively but added that it was the right thing to do for the government.
“This will be a shock to the banks as they will now have to borrow at higher rates. They will definitely take a hit as this is not the best for them,” he stated.
Public private partnerships
The committee also pointed out that the Ministry of Finance had facilitated the incremental supply of Public Private Partnership (PPP) projects in the market to attract private interest and investment in line with the PPP policy.
As a result, the cumulative number of PPP transactions has increased to 11.
These include the Office Complex Project of the Securities and Exchange Commission, and the Takoradi Port Dry Dock and integrated terminals project, with the PPP procurement stage completed.
The committee was informed that a total of 16 expressions of interest had been received in respect of the integrated terminal at the Takoradi port.