INTRODUCTION

1.0 BACKGROUND TO STUDY

The activities of treasury single account are mostly seen among the commercial banks in banking sector in Sierra Leone. The banking sector is the engine of any nation's economy. The economic status of any nation depends on how stable their banking industry is. In other words, any issue that affects banks also has an impact on the economy of the nation (Kanu, 2016). In Sierra Leone, commercial banks have been the custodians of government funds. The banking system in Sierra Leone has experienced several reforms and policies, some favourable, others unfavourable. Many banks did not survive these reforms. Until the introduction of TSA, government Ministries, Departments and Agencies (MDA’s) operated a multiplicity of accounts in the commercial banks. The MDA’s use part of the funds they generated to fund their operation and remitted the residual to the federation account. This resulted in leakages, embezzlement of funds and inadequate budgetary and financial planning. However the highest beneficiaries of this situation where the banks who relied on deposits from government agencies and lent back to the government at high interest rates.

1.1 BACKGROUND OF THE CASE STUDY

The Guaranty Trust Bank Sierra Leone Limited is a Subsidiary of Guaranty Trust Bank of Nigeria. The headquarter of the Guaranty Trust Bank is in Nigeria and it is wholly owned and managed by the Nigeria Banking Institution with a branch network that covers two hundred locations in Nigeria. The Guaranty Trust Bank growing reputation as an international brand was real bank years ago by a successful US$750Million Global Depositing Receipts (GDR) offering. The listing of the Global Depositing Receipts on the London stock exchange. The Bank had entered history books in 1990s and is the first Nigeria Financial Institution to venture into the international capital markets and raises funds via US$350 Million regulation Eurobond issue. The Bank was recently recognized as the best Bank during the Euro Money awards. The Guaranty Trust Bank commended operations in Sierra Leone in January 2002 through the successful acquisition of 90% shareholding of the former First Merchant Bank of Sierra Leone. Today, Guaranty Trust Bank Sierra Leone Limited is the third largest Bank in Sierra Leone after thirteen years of its operations. The Bank continues to be the fastest growing Bank on accounts of its outstanding growth as indicated by all performance indices. Over the years, the Bank has involved into an industry heading Bank for the exceptional financial performance, excellent service standard, value adding product innovation, professionalism and excellent ethics, which have led to high customer loyalty. The Bank support Private and Government initiatives. The Guaranty Trust Bank is a major Banker to all the telecommunication banks, Government Parastatals, major importers and mining banks and other institutions including Small Medium Enterprises (SME). The Guaranty Trust Bank strives to the best at all dedication to its customer’s service. In 2015, Guaranty Trust Bank was awarded for its excellence Leadership in recognition of its commitment to the quality and excellence of its services. 4 Base on the above challenges faced by Guaranty Trust Bank, The Bank set up a mission to efficiently manage the modern Banking system that is safe and give affordable credit facilities to customers and stand competitive advantage over competitors in the Global Financial Institution (gtb.sl). As of 2022, the bank is now know to be Guaranty Trust Corporation (GTCO).

1.2   STATEMENT OF PROBLEM

A great challenge facing most parts of the world and, particularly, the developing countries like Sierra Leone is how to achieve efficient allocation of resources as well as stabilization of the business cycles. An important factor for efficient management and control of government’s cash resources is a unified structure of government banking. Such unified banking arrangements should be designed to minimize the cost of government borrowing and maximize the opportunity cost of cash resources. This requires that cash received is available for carrying out government’s expenditure programmes and making payments in a timely manner. Many emerging markets and low-income countries have fragmented systems for handling government receipts and payments. In these countries, the ministry of finance/treasury lacks a unified view and centralised control over government’s cash resources. As a result, this cash lies idle for extended periods in numerous bank accounts held by spending agencies while the government continues to borrow to execute its budget. It is based on these reasons that the current global revolution in government accounting became paramount following which Sierra Leone has initiated and implemented the Treasury Single Account (TSA) and other series of economic policies to assist in the better management of her economy.

1.3   AIMS AND OBJECTIVES OF STUDY

The main aim of the research work is to determine the impact of treasury single account on the performance of commercial banks in Sierra Leone; other specific aims of the research work are stated below as follows:

1.  To determine the extent to which treasury single account (TSA) has improved the financial records in commercial banks

2.  To examine the effect of treasury single account on bank liquidity

3.  To examine the effect of government treasury account on the performance of commercial banks in Sierra Leone

4.  To investigate on the factors affecting the implementation of the treasury single account in Sierra Leone

5.  To proffer solution to the above stated problems

1.4   RESEARCH QUESTION

The study came up the following research question so as to ascertain the above objectives. The research questions were stated as follows:

1.  To what extent does treasury single account (TSA) improve the financial records in commercial banks?

2.  What is the effect of treasury single account on bank liquidity?

3.  What is the effect of government treasury account on the performance of commercial banks in Sierra Leone?

4.  What are the factors affecting the implementation of the government treasury single account in Sierra Leone?

1.5 STATEMENT OF RESEARCH HYPOTHESIS

HYPOTHESIS 1

H0: treasury single account does not enhance the performance of commercial banks in Sierra Leone

H1: treasury single account enhances the performance of commercial banks in Sierra Leone

HYPOTHESIS 2

H0: the implementation of treasury single account has no significant effect on fraud detection and prevention in commercial banks in Sierra Leone

H1: the implementation of treasury single account has no significant effect on fraud detection and prevention in commercial banks in Sierra Leone

1.6   SIGNIFICANCE OF STUDY

The study the impact of treasury single account on the performance of commercial banks in Sierra Leone will be of immense benefit to the federal government of Sierra Leone, the Guaranty Trust Bank Sierra Leone Limited (GTCO) of Sierra Leone, the commercial banks in the Sierra Leone, the ministries and other government agencies in Sierra Leone, the study will also be of great benefit to the citizens of Sierra Leone as proper budget and fund allocation to both the state and local government of Sierra Leone will be done appropriately. Finally the study will also benefit students and other research that wishes to carry out similar research on the above topic.

1.7  SCOPE OF STUDY

The study the impact of treasury single account on the performance of commercial banks in Sierra Leone will be limited to Guaranty Trust Bank Sierra Leone Limited (GTCO) in Sierra Leone, from the time of implementation to date

1.8  LIMITATION OF STUDY

FINANCIAL CONSTRAINTS: financial constraints tends to impede the speed of the research student to buy materials and visit other areas of the federal government sector to get information and other materials concerning the research topic but the researcher was able to get meaningful information concerning the research topic.

TIME CONSTRAINTS: this researcher still being a student must be involved in one or two departmental activities like seminar presentation, submission of assignment, attendance to lectures etc but the researcher was able to meet up with the time allocated for the completion of the research work.

1.9 DEFINITION OF TERMS

FINANCIAL LEAKAGES: refers to outflow from a circular flow of income model.

TSA: Treasury single account is a financial policy introduced by the federal government of Sierra Leone in 2018 to consolidate all inflows from the country's ministries, departments and agencies (MDAs) by way of deposit into commercial banks, traceable into a single account at the Central Bank of Sierra Leone.

TRANSPARENCY: a positive and clear financial statement of Sierra Leone

REFERENCES

Adeolu I. A. (2016). Understanding The Treasury Single Account (TSA) SystemThings You Should Know. [(2010), Treasury]

Isaac .A. (2015), How Treasury Single Account (TSA) may affect economy. (Unpublished Paper)

Kanu&Oyims. (2015). Financial Exclusion of Small and Medium

Enterprise and Poverty Alleviation:

Sierra Leone Experience. Archives' of'Business'Research,'3(4), pg. 63-77.

SailendraPattanayak and Israel Fainboim (2010), Treasury Single Account: Concept, Design and Implementation Issues. Fiscal Affairs Department (IMF Working Paper

Taiwo .O ..(2015), Does The New Treasury Single Account (TSA) Hold For Tax? PWC Sierra Leone.

UdomaUdoUdoma (2015), Implementation of TSA and Sierra Leone Economy.Chairman National Planning Commission. Sierra Leone. (Unpublished Paper).