The Treasury Single Albatross (TSA)

I was at the bank on Wednesday. I’m one of the few who have deliberately refused to do banking transactions online, preferring instead to pay infrequent visits to the bank. It’s the way I’ve always known banking to be; not an interaction with machines. While I lived in the UK in 2005/2006, one of the […]

I was at the bank on Wednesday. I’m one of the few who have deliberately refused to do banking transactions online, preferring instead to pay infrequent visits to the bank. It’s the way I’ve always known banking to be; not an interaction with machines. While I lived in the UK in 2005/2006, one of the biggest complaints from bank customers was that they were always directed to speak to some machine or the other, instead of with human beings, whenever they wanted something done.
But times have changed. Even in Nigeria. I believe though, that we sometimes adopt innovation from abroad without looking at the full impact; without considering where we are coming from as a people. For example, e-Banking came and it was the modern way to go. Many were laid off in the banks, in a country with anything like 35% unemployment rate among graduates.  I decided to register my protest to some of the policies; I don’t have a single debit card in Nigeria, have never used an ATM here, and I’ve never done any online transfer in the country. I do those things abroad though.
Well, so I entered a banking hall just yesterday and it was more like a ghost house. The gloomy atmosphere was something else. The staff I spoke with told me they are expecting a ‘sack list’ to come out on the 1st of October, perhaps symbolic that a number of staff will be given ‘independence’ – to go and fend for themselves from that day on. She said it was a regular thing these days. Margins are thinning, regulatory policies are reducing bank profits, oversight is ensuring that banks do not cheat their customers like before. Yet the bank business models in the past, had seen to behemoths being built, unnecessary branches which are mere conduit pipes for siphoning the bank – for they were owned by some director or the other and charged to the bank’s account at exorbitant costs – and of course there was the issue of remuneration for the top dogs. More on that later.
This time, the clear and present danger is the TSA – Treasury Single Account. Or is it the latest millstone around the necks of our overfed banks with the wrongest of business models? 
Many bankers feel the president is being mean to them. And I agree that the true impact of policy reversals need to be assessed just as the effects of policy implementation. In other words, the president must be careful lest his policies are viewed only in negative light. Job losses are never funny. I have usually advocated that injections can be made into the system to counter all the withering.  Apparently, what usually happens is that the big guns in the banks preserve themselves and their positions first, and leave the junior workers in the cold.  On all occasions, it is the junior staff that suffer, while the ‘ogas’ who pay themselves ‘armed robber salaries’, crazy bonuses and equity options, complete with all the huge official cars and mansions, are the last to hit the streets in search of another job.
But is this really the fault of the government?  I can only blame government for not being more circumspect. In the guise of ‘market-driven’ economics, African governments have been known to stand back when they should have stepped up. They allow the big guys run roughshod on the small guys and feign ignorance. It is not enough to cause policy changes without minding what happens to the most vulnerable in society. Of course a nation, a society, is judged by how the most vulnerable within it, is treated, not by how the jet-set fares. That is why global media will continue to beam images of our poorest areas rather than our plush mansions to the world.
In the matter of this Treasury Single Account, I understand that the policy had been in operation for a few years now, only that many agencies chose not to adhere and could get away with it under the GEJ government. Some also say that GEJ did not have the heart to carry it through because of the devastating effect the full implementation could have on the people and economy. Whatever the case, the banks had made too much money off the previous policy where a lot of funds were allowed to hang in different accounts in banks.  All a ministry, department or agencies needed to do, is to leave the funds in the current account and abandon projects.  On the basis of monthly average balances, the bank will pay the big civil servants or political appointee who facilitated the deposit, a huge sum. The bankers will also help themselves. In the past, there were instances where bank MDs called from Lagos and demanded that they be included in the largesse. Current account deposits, which should attract no interest payment by the banks, ended up becoming fixed deposit by the time all these payments are made.
So, it is the fault of the banks. They built huge skyscrapers on nothing. We deluded ourselves in this country – as we usually do – that we had arrived. The banks competed on the basis of whose profit was the largest. Unfortunately, as this went on, we also saw that the banks brutalized their staff, often employing graduates to do ‘marketing’ for them for a monthly salary of between N30,000 and N40,000. ‘Outsourcing’ became the order of the day, meaning that a huge percentage of lower-cadre staff had no career, got no promotions at all, and were simply thrown out with no benefits whenever the banks were tired of them. All this went on as the executives got fatter and advertised their good fortunes to the global community.
But a new sheriff is in town. We pray this sheriff is not too harsh. We also pray this sheriff steps out and actually protects the meek and low. That is the only way we can rebuild this economy – from the ground up. For as things stand, the transfer of funds back to the CBN under the TSA, will lead to branch closures, if not outright financial crises, run in banks and institutional collapse. It will no longer be only about staff layoffs.  This will have further negative impact on the real estate market, where well-established real estate companies will also have to lay off as the market slumps further. Whole housing estates will remain unoccupied; abandoned. Most shopping malls are less than 50% occupied already.  Many of these real estate deals are already subjects of litigation between banks and developers. Some may just rot where they stand.  We may have set off a real economic depression. 
So my singular appeal is for government to create some buffers for the vulnerable. I have no pity for the big bankers who have made enough money already. They all knew this was coming. It’s the small guys that bear the brunt. And since the poor guys voted for Buhari, silence will not work, neither will calls for ‘patience’. Many are dying.  The sky is falling.