Effects Of Treasury Single Account On

Performance And Survival Of Deposit

Money Banks In Nigeria
Gbegi, D. O (Ph.D)
email: Gbegidan@gmail.com
Tel.08039670569

Ipevnor Jennifer Mnena

email: mnenaterver@gmail.com
Tel. 08137585228

Duenya Moses Imoter

email:Imoterduenya@gmail.com
Tel. 08162628010

pp 278-286 ABSTRACT

T reasury Single Account policy is a financial reform policy of the Federal

Government of Nigeria introduced in 2015 to curb corruption that has eaten
deep into the Nigerian Society, ensure accountability and transparency in all
government finances. It is a government banking arrangements aimed at managing
and controlling government's cash resources. As interesting as this may sound it has its
implications on the financial sectors mainly the banks which are the heartbeat and the
engine of growth in any developing economy. This research specifically examines the
effect of treasury single account policy on the performance of banks and their survival
in Nigeria. The objective of this research is to examine the effect of the policy on banks
performance and survival. Secondary data had been employed. The populations of this
study are deposit money banks in Nigeria using a sample of 6 banks financial
statement for one year through judgment sampling. The data were analyzed using the
paired sample t- test analysis techniques and percentages. The result of this research
shows that adoption of a Treasury Single Account (TSA) does not affect banks
performance and survival using the two widely used measure of banks performance,
the Return on Asset ROA and the Net Interest Margin NIM and measures of survival:
the total assets, total deposit, loans and advances profit and before tax. Thus, the
researchers recommend that for the banks to sustain this performance, it must redefine
the nature of competition, diversify economically and refocus on the original purposes
for which they were set up- to collect depositors' funds (not necessarily government
funds), keep them safe; engage in intermediation to create wealth and jobs for the
economy and in the process earn profit for themselves.
Keywords: Treasury Single Account, Banks Performance, Survival.
 Nigerian Journal of Management Sciences Vol. 7 No.1, 2019 279

INTRODUCTION Bank of Nigeria leaving these Deposit Money Banks

financially deflated. (Jat:2016). Deposit Money
Treasury single account (TSA) is a unified structure Banks are therefore observed to experience liquidity
of government bank accounts that gives a problems which significantly affect profitability and
consolidated view of government cash resources. their survival in the long run. Secondly, significant
Based on this principle and the unity of treasury, TSA reduction in these Deposit Money Banks affects their
is a bank account or a set besides plugging loopholes, lending capacity and subsequent interest rate which
it breeds accountability. All inflows are seen the exact strengthens these banks operation and their survival.
way they come in, can be tracked, and proper
documentation of linked accounts through which the It is perceived that the performance of many money
government transacts all its receipts and payments” deposit banks seem to have been on the decrease in
IMF (2010). Adeolum, (2015) added that “the Nigeria since the adoption of Treasury single account
maintenance of Treasury Single Account will help to by the Federal Government. This is believed to be as a
ensure proper cash management by eliminating idle result of over dependence on Public Sector Funds
funds usually left with different commercial banks which constitute a greater percentage of the bank
and in a way enhance reconciliation of revenue deposits therefore faced with strategic thinking of
collection and payment”. problem how to stay in business or faced total
liquidity.
The purpose is primarily to ensure accountability of
government revenue, enhanced transparency and Objectives of the Study
avoid undue delay in the remittance of government Generally, this study seeks to explore the effect of
revenue. The maintenance of a treasury single treasury single account on performance and survival
account will facilitate effective cash management by of deposit money banks in Nigeria as its main
eliminating idle funds usually left with different objective. However; the specific objectives are to:
deposit money banks and in a way minimizes the
borrowing costs. (IMF, 2010). i: examine the difference between the Return on
Assets of Deposit Money Banks in Nigeria before
The move would plug loopholes, where hitherto and after the adoption of Treasury Single Account
resources were filtered away. If a Ministry,
Department or Agency (MDA) has various accounts ii. Examine the difference between the Net Interest
and doesn't have a unique one for receiving inflows; it Margin of Deposit Money Banks in Nigeria
is very easy to tell its clients to pay money into any of before and after the adoption of Treasury Single
its accounts, which is supposed to be illegal Account
maintained.
Research Questions
The directives by President Mohammadu Buhari that To achieve the objectives of this research the
all government revenues should be remitted to a following research question will be raised:
treasury single Account is in consonance with this i: What is the difference between the Return on
programme and in compliance with the provisions of Assets of Deposit Money Banks in Nigeria before
the 1999 constitution (CBN, 2015) which control the and after the adoption of Treasury Single Account?
situation of accountability and proper documentation.
ii. What is the difference between the Net Interest
Treasury Single Account will cause cash crunch and Margin of Deposit Money Banks in Nigeria
liquidity challenges to the banking sector, who before before and after the adoption of Treasury Single
the introduction of the TSA feed fat on the “float” Account?
created by the duplicated and unaccounted MDA's
accounts in all the Commercial Banks in Nigeria. The Statement of Hypothesis
question is; what is the impact of this TSA on the In view of the above objective the researcher
banks' liquidity in Nigeria? formulated the following hypothesis:
H01: There is no significant difference between the
Statement of the Problem Return on Assets Deposit Money Banks in
Nigeria before and after the adoption of Treasury
Deposit Money Banks in Nigeria seem to lack the Single Account
ability to generate deposits outside the Public Sector H02: There is no significant difference between the Net
Funds which are under the control of the Government. Interest Margin of Deposit Money Banks in
When the Federal Government in Nigeria fully Nigeria before and after the adoption of Treasury
implemented Treasury Single account (TSA) in 2015, Single Account
over 2 trillion naira deposits was moved to the Central
280 Effects Of Treasury Single Account On Performance And Survival Of Deposit Money Banks In Nigeria

This paper therefore seeks to provide an insight on the leading to the directives to banks to implement the
influence of TSA adoption on liquidity and technology platform that will help accommodate all
performance of banking system in Nigeria. We MDA's in the Treasury Single Account scheme.
structured the paper into four parts. Following this
introduction Part 2 which reviews the related IMF (2010), averred that full-fledged TSA shares
literature, part 3 discusses the methodology; part 4 three essential features: First, the government
presents the analysis and implication of findings banking arrangement should be unified, to enable the
while part 5 is the conclusion and recommendation. ministry of Finance (MoF) (or treasury) to have an
oversight responsibility for, over government cash
CONCEPTUAL FRAMEWORK flows in and out of these bank accounts. Second, no
Treasury Single Account (TSA) other government agency operates bank accounts
The TSA is a process and device that combines all outside the TSA arrangement. Third, the
government accounts in a single unit for the effective consolidation of resources should be comprehensive,
management of its finances, bank and cash position. and encompass all funds both budgetary and extra-
With this, all MDAs are to comply and must close all budgetary. Therefore, the TSA is a payment system in
revenue accounts maintained in different Banks or which all revenues due to the government are paid 88
branches and transfer the proceeds to the TSA into a unified account domiciled with the CBN. Its
maintained by the CBN (Oyedokun, G. E. 2016). objective is to ensure fiscal discipline and transparent
management of the nation's finances (CBN, 2015).
The adoption of TSA will involve retail banking
which deposit money banks can perform. It includes: TSA and Banking Sector
collection of taxes/levies and disbursements of funds The banking sector is the engine of any nation's
as well as payment of salaries to civil servants. As a economy. In Nigeria, commercial banks have been the
public accounting system, the primary aim of TSA is custodians of government funds. Therefore, with the
to ensure accountability of government revenue, maintenance of a single account, banks will be
enhance transparency and avoid misapplication of deprived of the free flow of funds from ministries.
public funds. It is to ensure that transparency of Indeed, it is estimated that commercial banks hold
unspent budgetary allocations is carried forward about N2.2 trillion public sector funds at the
automatically to another year. beginning of the first quarter of 2015. When such
amount of money leaves the system is obvious. When
It was argued that TSA concept is not new in Nigeria one considers the fact that each time the monthly
as it dates back to the regime of the former President federal allocation is released, the banking system is
Goodluck Ebele Johnathan but the directive by usually awash with liquidity, and as soon as this public
President Muhammadu Buhari in August 2015 sector fund dries up, the result is liquidity problem
marked the beginning of the full implementation of with an increase in interbank rates. The banks must be
Treasury Single Account (TSA) system in Nigeria. affected, when such high revenue generating
Notwithstanding, TSA was not implemented before parastatals like the NNPC moves out of commercial
the directive in contrary to the provision of Section 80 banks. As a matter of fact, commercial banks stand to
(1) of the 1999 Constitution as amended that states lose immensely from the implementation of Treasury
“all revenues, or other moneys raised or received by Single Account. This cause insufficiency of available
the Federation (not being revenues or other moneys cash in the banking system, resulting in a surge in
payable under this Constitution or any Act of the money market rates during the period as banks source
National Assembly into any other public fund of the for funds to cover their poor liquidity positions.
Federation established for a specific purpose) shall be Indeed, the Nigerian banking industry, on an
paid into and form one Consolidated Revenue Fund of aggregate basis, would be affected regarding deposits
the Federation”; successive governments have and funding cost structure. As a matter of fact, TSA
continued to operate multiple accounts for the generated much fear in the banking industry even
collection and spending of government revenue in before its implementation. The fear is that with the
flagrant disregard to the provision of the constitution high Monetary Policy Rate at 13%, Cash Reserve
which requires that all government revenues be Ratio (CRR) at 20% and 75% available for private and
remitted into a single account (SystemSpecs, 2015). p u b l i c s e c t o r d e p o s i t s r e s p e c t i v e l y, i t s
implementation would not be favourable to banks.
SystemSpecs (2015), government ran a pilot scheme Irrespective of how tough his policy will be on banks,
for a single account using 217 Ministries, Department it will perhaps compel the banks to focus on the funds
and Agencies as a test case in year 2012. The pilot of the real sector of the economy, rather than spending
scheme saved the country about N500 billion in much on Federal Government projects, Oil & Gas
frivolous spending. The success of the pilot scheme Transactions, Forex dealings. Any commercial bank
motivated the government to fully implement TSA, that fails to operate based on the core banking
 Nigerian Journal of Management Sciences Vol. 7 No.1, 2019 281

functions for which they were licensed must oversight of the ministry of finance. The
definitely close shop. This will cause heavy implementation of the TSA will have a positive effect
downsizing of staff, thereby increasing the on the national economic planning, swift & full
unemployment rate in the country. Managements of budgetary implementation; reduce leakages and
banks should understand the aim of establishing other irregularities in the MDAs, aid appropriate
banks. The Government is not only customer banks planning, data collection, analysis and timely
have. The issue of banks chasing government money aggregation of Federal Government Revenue.
at the expense of other clients especially in the sector
of the economy is a questionable commentary on the Realization of the government revenue on time
performance of the banks. A good number of people causes its effective allocation. The primary benefit of
in Nigeria is unserved by the bank, many lack access a Treasury Single Account is to provide for proper
to financial services, and some have no opportunity monitoring of government receipts and expenditure.
to save or invest their resources. In the Nigerian case, it will help to block most, if not
all, the leakages that have been the bane of the
To affirm this, Kanu & Oyims (2015) observe that “in economy. We have a situation where some
most developing countries, the formal financial Ministries, Departments, and Agencies manage their
system reaches only to top 25 per cent of the finances like independent empires and remit limited
economically active population” According to the revenue to government treasury. Under a properly
authors, 75 percent of the people were left without run Treasury Single Account, it cannot be possible, an
access to financial services apart from those provided agencies of government are meant to spend in line
by money lenders and families. The issue of the non- with duly approved budget provisions. Tayo A.
accessibility to financial service cause poor (2015), said that “Government should make banking
economic sustainability and rural development in arrangements for efficient management and control
Nigeria. The adoption of the TSA is in the greater of government's cash resources”. It should be
interest of the states, as it will pave the way for the designed to minimize the cost of government
timely payment and capturing of all government borrowing and maximize the opportunity cost of
revenue in a single government treasury account, fund. TSA ensures that all money received is
without the intermediation of multiple banking available for carrying out government's expenditure
arrangements as had been the case. Moreover, program and making payments on time.
embracing the scheme can help reduce the
mismanagement of public funds by revenue- Many low-income countries have fragmented
generating agencies, as well as check excess systems for handling government receipts and
liquidity, inflation, high interest rates and round- payments. In these countries, the ministry of
tripping of the government deposits. The use of finance/treasury lacks a unified view and centralized
multiple bank accounts left room for the control over government's cash resources. As a result,
misappropriation of huge sums of money belonging this fund lies idle for extended periods in numerous
to all levels of government in the country. It bank accounts held by spending agencies while the
encouraged unbridled corruption in the management government continues to borrow to execute its
of public finances, with the result that all tiers of budget. Hence, Udoma U. U. (2016) opines that
governments became heavily cash-strapped. maintenance of TSA will enhance funding
government budget rather than depend on Federal
Treasury Single Account and Economy allocation. In any economy where the budget is fully
Government sees Treasury Single Account as a useful funded, the aim certainly will be accomplished. The
tool to establish centralized control over its revenue consequence should be; improved economic system,
through effective cash management. It enhances political and social development. IMF (2010), made
accountability and enables government to know how it clear in her working paper that a government that
much is accruing to its accounts on a daily basis. In lacks effective control over its cash resources can pay
Nigeria, it is expected that the implementation of for its institutional deficiencies in multiple ways.
TSA will help tame the tide of corruption of financial First, idle cash balances in bank accounts often fail to
expected to block revenue leakages within the earn market-related remuneration. Second, the
government parastatals as the Ministry of Finance government, being unaware of these resources,
will be able to monitor the inflows and outflows, incurs unnecessary borrowing costs on raising funds
hence, augment the reduction in oil revenue due to to cover a perceived cash shortage. Third, idle
falling oil prices. CBN, (2015) reasoned in the same government cash balances in the commercial banks
direction and said that the implementation of TSA are not idle for the banks themselves, and can be used
will enable the Ministry of Finance to monitor fund to extend credit. Therefore, the implementation of
flow as no agency of government is allowed to TSA will promote a healthy economic system.
maintain any operational bank account outside the Hence, a member of the Monetary Policy Committee
282 Effects Of Treasury Single Account On Performance And Survival Of Deposit Money Banks In Nigeria

(MPC), in his contribution said: "it has indeed become NIM = Interest income – Interest Expense
very clear that total economic restructuring is an Total Assets
urgent imperative.
Corporate Profitability
Although the falling oil price is making the fiscal Profitability indicates how efficiently management
space more complicated, I believe that there is still utilizes its total asset in order to generate earnings
room for improvement. One area that can be easily (Chen & Hammes 2004). Shareholders are concerned
improved upon is the reduction of wastages in with the profitability of the firm because this can
government finances, which is as a result of poor predict the future earnings of that firm and its survival.
financial management
Firm's liquidity
Banks Performance This indicates if a company is strong enough to
A major objective of bank management is to increase survive in tough times Sibilkov (2009) defines
shareholders' return epitomizing bank performance. liquidity as the ability of the firm to fulfill its short
Banks performance refers to how well or badly banks term obligations, hence the ease with which a firm's
are functioning in order to achieve its aim and asset can be converted into cash.
objectives. It generally implies the ability of a bank to
realize its predetermined objectives within a given Theoretical Frame Work
period of time (Abanewe, Ogbulu & Ndugbu: 2013). Public Finance Management Theory
According to Rose (2001) a fair valuation of any bank This theory assumes that all aspects of financial
performance should start by evaluating whether it has resources – mobilization and expenditure should be
been able to achieve the objective set by the well managed in government for the benefits of the
management and shareholders. The greater credit citizenry. It includes resources mobilization,
availability leads to the opportunity to increase the prioritization of programmes, the budgetary process,
productive assets and bank's profit. efficient management of resources and exercising
control to guide against threats. The purpose of
Return on Assets treasury single account primarily is to avoid
A basic measure of bank profitability that corrects for misapplication of public fund (Grubber,2005). This
the size of the bank is the return on assets (ROA); it theory conforms to the study as TSA is concerned with
divides the net income of the bank by the amount of its the consolidation and prudent management of public
assets. ROA is a useful measure of how well a bank funds for the benefit of the citizenry.
manager is doing on the job because it indicates how
well a bank's assets are being used to generate profits Modern Monetary Theory (Mmt) also (Known as
(Olubayo, Taiwo & Ayodele 2004). Neo-Chartalism) was proposed by Georg Friedrick
ROA= Net income Knapp (1905). It is a macro economic theory which
Total Asset describes and analyses modern economies in which
the national currency is flat money, established and
Net Interest Margin created by the government. The key insight of MMT is
Another commonly watched measure of bank that “monetarily sovereign government is the
performance is called the net interest margin (NIM), monopoly of it currency and can issue currency of any
the difference between interest income and interest denomination in physical or non-physical forms. As
expenses as a percentage of total assets. One of a such the government has an unlimited capacity to pay
bank's primary intermediation functions is to issue for the things it wishes to purchase and to fulfil
liabilities and use the proceeds to purchase income- promised future payments, and has an unlimited
earning assets. If a bank manager has done a good job ability to provide funds to other sectors, thus
of asset and liabilities management such that the bank insolvency and bankruptcy of government is not
earns substantial income on its assets and costs on its possible. MMT stipulated that, a sovereign
liabilities, profits will be high. How well a bank government typically has an operating account with
manages its assets and liabilities is affected by the the country's central bank. From this account, the
spread between costs on its liabilities. This spread is government can spend and also receive taxes and
exactly what the net interest margin measures. If the other inflows (Scott Fullwilter, 1914).
bank is able to raise funds with liabilities that have low
interest costs and is able to acquire assets with high MMT is based on a detailed empirical account of the
interest income, the net interest margin will be high “operational realities” of interactions between the
profitable. If the interest liabilities rise relative to the government and it central bank and the deposit money
interest earned on its assets, the net interest margin banking sector. MMT shows that it is relevant to
will fall, bank profitability will suffer. (Olubayo, aggregate the central bank and the treasury into a
Taiwo & Ayodele, 2011) government sector that finances itself through
 Nigerian Journal of Management Sciences Vol. 7 No.1, 2019 283

monetary creation such that financial position of the to 2016would be used to measure the effect of TSA on
treasury and the central bank are so intertwined that bank performance. The period has been chosen for the
both of them are constantly in contact in order to make purpose of comparing the performance of Nigeria
fiscal and monetary policies run smoothly. This banks before the introduction of TSA (2013 to 2014)
theory also falls in line with the study subject, as the and after the adoption or implementation of TSA
rationale behind TSA also make the responsibilities of (2015 to 2016)
the national treasury and the central bank intertwined.
Research Methodology
Empirical Review The study adopted the ex-post facto design known as
Patricia, Yohanna& Okwoli (2015) examine the effect casual comparative research design. This has led to
of treasury single account policy on the performance the review of literatures in the area of TSA and
of banks and their survival in Nigeria. The result of performance of banks before and after the adoption of
this research shows that adoption of a Treasury Single TSA policy. Secondary data was used that is the
Account (TSA) does not affect banks performance annual reports of the banks for the periods 2014 to
and survival. 2016, journal articles, government reports,
Ndubuaku, Ohaegbu & Nina (2015) examined the newsletters and opinion of experts from newspapers
impact of TSA on the performance of the banking were also the other sources of information.
system in Nigeria. The data were analysed using
regression and correlation analysis. The results from Population of the study comprises of 19 Deposit
the research analysis confirmed that the TSA had a Money Banks listed on the Nigeria Stock Exchange
significant impact on Credit to the Private Sector, for the periods 2014 to 2016.
Deposit Mobilization and Loans and Advances.
Sample size covers 10 banks as at 31 December, 2016
Kanu (2016), examined the Impact of Treasury Single on the Nigerian stock exchange between these two
Account on the Liquidity in Nigeria. Questionnaires years (2014to 2016). These data are coalesced
were administered to the Management staff of the ten together to generate a pooled data series. Hence the
banks selected for the study. Chi-square was study is both time series and cross sectional. A total of
employed as a statistical tool for analysis of the data. six annual reports from 2014 to 2016 pre and post TSA
The results obtained confirmed that the era consist of the study. The secondary method of data
implementation of Treasury Single Account in the collection was used. The data from the annual reports
public accounting system impacted negatively on the of the bank were retrieved from the various banks'
liquidity base and the performance of banking sector statement of financial position and the statement of
in Nigeria respect to total assets, deposits, loans and
comprehensive income.
Gap Identified in the Literature review.
From the few empirical studies, it is evident that there For this purpose, two categories of performance
is little literature specifically that dealt with the effect measures are explored. These are the net interest
of TSA on banks performance and survival in Nigeria, margin (NIM) and the return on assets (ROA). The
some of the researches conducted in this area are just paired sample t-test is used to analyze these data; NIM
recent and others were observations with no findings and ROA have been used in most banks' performance
as to the achievement so far, especially in Nigeria with studies. ROA measures the profit earned per naira of
its introduction two years ago. The effects on the bank assets and reflects how well bank management uses
performance in these studies has been measured using the bank's real investments resources to generate
the annual financial statements of 2014 &2015. To profits while NIM is focused on the profit earned on
have a robust result, the financial statements of 2013 interest generating activities.
Descriptive Statistics
ROAbeforeTSA ROAafterTSA NIIbeforeTSA NIIafterTSA
Valid 14 14 14 14
N
Missing 0 0 0 0
Miean .0518 .1021 56836119.1429 57635089.0000
Std. Deviation .05824 .14700 65257268.11889 81347627.14403
Skewness 3.200 2.517 .606 1.291
Std. Error of Skewness .597 .597 .597 .597
Minimum .01 .01 30812.00 60864.00
Maximum .25 .53 184581251.00 246551364.00
284 Effects Of Treasury Single Account On Performance And Survival Of Deposit Money Banks In Nigeria

3.200. Return on asset after the adoption of TSA has a

Results and Discussion Mean of 0.1021 with a standard deviation from the
This study examines the performance of selected right side of the mean of 0.14700 and a positive
banking industries by examining the mean of their skewness of 2.517 from the right hand side of the
profitability measures of Return on Asset and Net Mean. Net Interest Income before the adoption of
Interest income from the period of four years with a TSA has a Mean of 56836119.1429with a standard
break of two years in between. The comparison is deviation of 65257268.1188and a positive skewness
based on if there is a difference in the mean the of 0.606. Net Interest Income after the adoption of
selected banks between 2013/2014 and 2015/2016, TSA has a Mean of 57635089.0000with a standard
then it will be taken to mean that introduction of deviation of 81347627.14403and a skewness of
Treasury Single Account was responsible for the 1.291.
increase/decrease in performance. These distributions speak about the characteristics of
the data under investigation and their behaviour as
As shown from the result of the descriptive statistics they interact with one another as they move from one
above, return on asset (ROA) before the adoption of year to the other in a trend. To model an empirically
TSA has a mean of 0.0518, with a standard deviation meaningful relationship, this behaviour ought to be
from the mean of 0.05824 and a positive skewness of investigated.

Testing of the hypotheses

H01: There is no significant difference between the Return on Assets Deposit Money of
Banks in Nigeria before and after the adoption of Treasury Single Account
Paired Samples Statistics
Mean N Std. Deviation Std. Error Mean

ROAbeforeTSA .0518 14 .05824 .01556

Pair 1
ROAafterTSA .1021 14 .14700 .03929

Paired Samples Test

Paired Differences t df Sig. (2-

Mean Std. Std. Error 95% Confidence tailed)

Deviation Mean Interval of the

Difference

Lower Upper

Pair ROAbeforeTSA - -
.15241 .04073 -.13829 .03770 -1.235 13 .024
1 ROAafterTSA .05029

The result of the paired sample test showed that there examined the impact of TSA on the performance of
is a significant difference in the probability value of the banking system in Nigeria using regression and
the mean difference of Return on asset before the correlation analysis. The results from the research
adoption of TSA and Return on asset after the analysis confirmed that the TSA had a significant
adoption of TSA and the result is statistically impact on Credit to the Private Sector, Deposit
significant (p<0.05). Hence, we reject the null Mobilization and Loans and Advances. The
hypothesis; in other words, we accept that the significant difference (increase in the mean of pre and
estimate is statistically significant at 5% level of post TSA adoption) in the performance of the bank
significance. Hence, there is a significant difference before and after the adoption of TSA in our result
between the Return on Assets of Deposit Money could be as a result of management decisions in the
Banks in Nigeria before and after the adoption of studied banks to go for non-government accounts
Treasury Single Account. This is in line with the thereby boosting the bank's revenue and therefore the
findings of Ndubuaku, Ohaegbu & Nina (2015) who performance
 Nigerian Journal of Management Sciences Vol. 7 No.1, 2019 285

H02: There is no significant difference between the Net Interest Margin of

Deposit Money Banks in Nigeria before and after the adoption of Treasury
Single Account
Paired Samples Statistics
Mean N Std. Deviation Std. Error Mean

NIIbeforeTSA 56836119.1429 14 65257268.11889 17440738.52127

Pair 1
NIIafterTSA 57635089.0000 14 81347627.14403 21741067.85714

Paired Samples Test

Paired Differences t df Sig. (2-

Mean Std. Std. Error 95% Confidence tailed)

Deviation Mean Interval of the

Difference

Lower Upper

- -
Pair NIIbeforeTSA - 71710442 19165421 40605407
798969.8 42203346 -.042 13 .967
1 NIIafterTSA .78388 .99651 .11200
5714 .82628

The result of the paired sample test showed that there which is to seek private deposits through investment
is a difference in the mean of Net Interest Income in the real sector of the economy. The era of economic
before the adoption of TSA and Net Interest Income diversification has since begun in the banks with
after the adoption of TSA but the result is not previous reforms thus most Deposit Money Banks
statistically significant (p>0.05). Hence, we accept had refocused on the original purpose for which they
the null hypothesis; in other words, we accept that the were set up to collect depositors' funds (not
estimate is not statistically significant at 5% level of necessarily government funds), keep them safe;
significance. Hence, there is a significant difference engage in intermediation to create wealth and jobs for
between the Net Interest Margin of Deposit Money the economy and in the process earn profit for
Banks in Nigeria before and after the adoption of themselves. As such all that needs to be done is to
Treasury Single Account but the difference is not consolidate on the previous strategies. Findings
statistically significant (p>0.05). This is in line with indicate that TSA systems should be improved since it
the findings of Patricia; Yohanna &Okwoli (2015) has a significant effect on banks performance and
who examined the effect of treasury single account survival. The study of Adeolu (2015) observed that
policy on the performance of banks and their survival TSA will have significant effect on the banking sector
in Nigeria and found that the adoption of a Treasury which is in conformity with the findings of this study.
Single Account (TSA) does not affect banks
performance and survival. The studied banks may Recommendation
have their own internal growth mechanism not to be Based on the findings of this study, the following
affected by the introduction of TSA and the recommendations are made;
withdrawal of government found in the banking Deposit Money Banks should position themselves
sector. and initiate policies that will counter the negative
effect of the TSA on their operations in the long run as
5.0 Conclusion and Recommendations given in the short period after its implementation may
This study empirically examined the effect of not depict a true picture.
government financial reform (TSA) on banks The banks should avoid over-reliance of government
performance in Nigeria. The analysis and discussion funds and source for funds from other sectors of the
made in section 4 can therefore be concluded that the economy. Rural banking should be aggressively
financial reform (TSA) has no effect on banks undertaken to mobilize funds from the un-banked
performance as banks have been forced to leave their among rural dwellers. The government should find
comfort zone caused by dependence on government other avenues to encourage the private sector. The
money to now become as creative and inventive as it policy however should not be killed by policy
is the case in modern economies around the world, intricacies.
286 Effects Of Treasury Single Account On Performance And Survival Of Deposit Money Banks In Nigeria

System spec (2015). The Theory and Practice of

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