TSA: Banks to Lose $10Bn as Transfers Stall Money Market

Banks in the country made no bids on the interbank money market on Tuesday as they awaited instructions on how to comply with a directive to transfer government revenues into a s Treasury Single Account (TSA) as ordered by the federal government.

The account will be managed by the Central Bank of Nigeria (CBN) and it is estimated that commercial banks will lose $10billion when the money is transferred.

President Muhammadu Buhari has ordered that all revenues be paid into the "Treasury Single Account" from Tuesday, part of a drive to fight graft.

"No trading is currently going on because no bank was willing to put out quotes until there is a clearer direction with the implementation of the Treasury Single Account (TSA)," one dealer said.

"The market is right now frozen, as no trading going on," another trader said.

The federal government deadline for all departments to ensure all financial transactions pass through a single bank account expired at the end of Tuesday.

The move is intended to make it easier to monitor government spending and stamp out corruption.

President Buhari, who gave the order to close the multiple bank accounts, has said that he believes government officials have stolen about $150 billion over the past decade.

Obadiah Mailafia, the former deputy governor of Nigeria's Central Bank, told the BBC's Focus on Africa radio programme that it has been easy for fraud to take place because the government did not know how many bank accounts each ministry held.

"They provided avenues for corrupt ransacking behaviour in the past. So the thinking of government was to centralise these accounts so they are easier to monitor," Mr Mailafia said.