Treasury Single Account (TSA) reform has been underway for fifteen years in Francophone Sub-Saharan Africa, aiming to improve government cash flow management amid recent economic shocks. Progress varies across countries, with institutional reforms and digital tools aiding implementation, yet challenges remain in system upgrades and full TSA coverage.
To discuss recent achievements, persistent challenges, and prospects regarding TSA reforms, the regional technical assistance centers of Sub-Saharan Africa (AFRITACs Central, West, and South), in collaboration with the IMF’s Fiscal Affairs Department, recently organized a workshop in Dakar, Senegal. The workshop was attended by 56 senior officials from 19 of the 21 Sub-Saharan African countries, including all member States of the Central African Economic and Monetary Community (CEMAC) and of the West African Economic and Monetary Union (WAEMU).
The key takeaways from the deliberations at the workshop are described below.
TSA implementation progress: TSA implementation has been boosted across CEMAC and WAEMU member states due to changes in the institutional and regulatory framework, including the regional PFM directives and agreements for TSA maintenance and Treasury reorganization in several countries. IMF CD supported this positive trend in most SSA countries.
Role of common central banks: Common central banks in CEMAC and WAEMU have facilitated TSA adoption, through harmonized regulatory frameworks and real-time gross settlement systems, promoting digital financial operations and centralized TSA accounts at the central banks.
Banking sector impact assessment: Several countries, including Benin, Burkina Faso, Cameroon, and Mali, assessed the impact of transferring government deposits from commercial banks to TSAs, identifying risks to some banks' solvency, while confirming the banking sector stability.
Comprehensive census of government accounts: Several countries have implemented measures to systematically identify and monitor all public bank accounts, including stricter controls for opening accounts, and oversight of irregular accounts.
TSA coverage: Over half of the surveyed countries have made progress in implementing the TSA, mainly for budget execution functions. The TSA coverage has been expanded beyond the budgetary central government in most AFRITAC West member countries. Six AFRITAC West countries have been able to extend their TSA to cover the operations of about 75 percent of the sub-national governments. However, this rate is below 25 percent in the two AFRITAC Central countries that are most advanced in their TSA reform. The coverage of projects and programs remains limited and is in the experimental phase.
Resource centralization: Most countries have established mechanisms for daily or weekly centralization of resources into the TSA and for allocating funds to bank accounts that manage expenditure payments. Some countries have introduced automatic cash-pooling mechanisms.
Despite this progress, the reform faces persistent challenges. The central bank's information system needs to handle TSA sub-account management and consolidation. Continued cash flow pressures in the face of an external financing squeeze are causing depositors to hesitate to join the TSA. Unjustified exemptions to certain accounts limit the TSA scope.
Who should do what in the future?
Countries should maintain and consolidate TSA implementation, enhance cash flow management, and ensure its alignment with debt management. They also need to reinforce internal controls for the Treasury's correspondent accounts and upgrade information systems.
WAEMU and CEMAC should define and/or improve TSA progress assessment tools and monitor TSA implementation. The Central Bank of Central African States (known as BEAC) and the Central Bank of West African States (known as BCEAO) are engaged in developing technological solutions for TSA payment management interoperability. FAD and the AFRITACs should continue to provide technical assistance. Monitoring TSA reform through IMF-supported programs is an important lever for ensuring its success.
