TSA 101

TSA 101

What is TSA? As the name implies…it’s an account, every account has inflow (Credit) and outflow(Debit).

So TSA, has credits i.e. the inflow of government revenues eg Stamp duty and TSA also has debits i.e. the outflow of cash to meet government expenses eg salaries.

How does TSA work? Let’s take three institutions, say NPA, NTA and NCC. Lets assume all three earn revenues of N1000 . With TSA that N1,000 will go from their collecting banks to the CBN account.

However, NPA, NTA and NCC have expenses, eg salaries. So TSA will be debited to pay salaries, so lets assume salaries for all three are N1,100, this means that N1,100 will be debited from the TSA account as well

Ok?

Now when the budget proposal for the year is done, the Executive will state revenues and expenses, so it will state revenues expected from say NPA, NTA and NCC will be N1,000, this is the same N1,000 revenues that will be swept into the TSA.

Also the Budget will set out expenses, say salaries for NPA, NTA and NCC at N1,100, this is the same N1,100 that is debited from the TSA.

So lets understand this, we can’t count the inflow of N1,000 from the NPA, NTA and NCC and count the N1,000 in the TSA, they are the same. That N1,000 revenues in the TSA is already projected to be captured in the budget as Independent revenue, just as the N1,100 is already projected to be captured as recurrent expenditure .

So its factually wrong to say there is N2t in TSA available to be used to fund the deficit, or available as “savings” …NO You can’t earn that N1,000 twice! Nor can you spend that N1,100 twice!

The N2t in TSA is revenue not savings, it will be subject to debits such as salaries…its ALREADY projected in the budget.

TSA does not create anything; it simply collects…