+ Impact of the Treasury Single Account

on Economic Activity

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+ Glossary of Terms

• The Federal Accounts Allocation Committee is responsible for the distribution of revenue accruing to the Federation Account between the Federal and State Governments and Local Government.

FAAC:

• A Treasury Single Account is a public accounting system under which all government revenue, receipts and income and collected into one single account, usually maintained by the country’s Central Bank. The aim of this is to ensure that governments cashflows are properly managed

TSA:

• Assets that can easily be converted to cash e.g bonds Quasi Money:

#FDCexplains

+ Total Money Supply (M2): N18.42trn

Cash: N1.18trn

Current Accounts: N5.28trn

Quasi Money: N11.95trn

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+ Treasury Single Account (TSA)

Total Banking system liquidity: N12trn

Government Money = N1.2trn

10% of liquidity

Approximately 2 months FAAC

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+ Implications (1/2)

IMPACT

POSITIVE NEGATIVE

Exchange Rate

Unemployment

Bank Profitability

Manufacturing

Inflation

Stock Market

Real Estate

#FDCexplains

+ Implications (2/2)

Short term interest rates 10.95% will increase

The naira (N224/$) will appreciate

The stock market YTD (-12.37%) will decline

Borrowing costs, approx. 23% p.a will jump

Total unemployment 26.5% - will spike

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