Implementing a Treasury Single Account in Niger

Posted by Matthieu Sarda[1]

The implementation of a treasury single account (TSA) is recognized as a core PFM reform. It allows countries to plan and manage their financial commitments by mobilizing resources more easily. Yet, as crucial as a TSA may be, its implementation has proved challenging in the eight West Africa Economic and Monetary Union (WAEMU) countries[2]. The reasons are political rather than technical. Public entities characteristically fear that by transferring funds to the TSA they will lose of control of the resources they manage.

There is some justification for these concerns. In many WAEMU countries, the management and use of public funds is less than optimal. Public entities such as établissements publics make extensive use of non-tax revenues and other own-resources to bolster their finances, and typically manage these resources through independent commercial bank accounts. This violates the basic principles of budget unity and universality. The present arrangements have two main consequences:

To address these issues, WAEMU governments, including in Niger, have introduced a legal obligation for public entities to deposit funds in the TSA held by the BCEAO[3], WAEMU’s central bank. Compliance with this obligation, which results from the transposition of WAEMU directives,[4] will require the closure of existing accounts in commercial banks and repatriation of their balances to the TSA.

The example of Niger casts light on four critical challenges.

A Treasury-centered model is thus likely to persist in WAEMU (and CEMAC) countries. It would be interesting to explore avenues for further coordination between member countries; and to develop a common diagnostic tool that could produce relevant technical, regulatory and financial recommendations.

[1] IMF Resident PFM Advisor in Niger.

[2] Namely, Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo.

[3] La Banque Centrale des États de l’Afrique de l’Ouest, based in Dakar, Senegal.

[4] Directive n°07/2009/CM/UEMOA on the general accounting rules within WAEMU, art 58.

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