During the 2024/2025 Financial Year Budget reading in the National Assembly yesterday, Cabinet Secretary for Finance and Planning Njuguna Ndung’u mentioned that plans were underway to migrate all public entity accounts into a single pool.
- CS Ndung’u said that all government funds will be centralized in a single account at the Central Bank of Kenya (CBK), with sub-accounts at major commercial banks starting July 1st this year.
- According to the CS, the centralization of funds will be a crucial move to enable the government to easily track revenue inflows from its numerous departments as well as supervising expenditure.
- The Treasury carried out an inventory of bank accounts held by public entities until 30th June 2023 and established that balances worth KSh 431.7 billion was inaccessible even as many government functions remained cash-strapped.
“The PFM Act, 2012 and its attendant Regulations provides for the establishment of the Treasury Single Account (TSA) system at both the National and County Governments.
“Based on the experience over the last 10 years since the enactment of the PFM Act, 2012, the need to review the scope of TSA implementation has become apparent,” CS Ndung’u said during the budget presentation.
The CS was optimistic that the migration would be successful because government payments are now automated under the IFMIS system and the CBK’s Internet Banking (IB). The Treasury Single Account will streamline transparency within government departments on all levels.
The plans to implement the TSA system were unveiled in January this year. It was decided that many cases of corruption were fogged by the existence of untraceable accounts which eluded examination from the National Treasury.
With the government burdened with multiple pending bills, a centralized account would help to weed out intermediaries who cause delays in the payment of suppliers and contractors. By hastening the decision-making process, members of the public can willingly undertake business with the government without any mishaps.
However, the system is not without its projected risks. All forms of resource centralization are in danger of being holistically affected in case of a system downtime or interruption. Akin to putting all eggs into one basket.
Nevertheless, the government plans to roll out the transition gradually and carefully to prevent any undue disruptions.
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