FG Activates Bottom-up Cash Management Policy to Engender Fiscal Discipline

•To take effect February 10

James Emejo in Abuja

The acting Accountant-General of the Federation (AGF), Mr. Sylva Okolieaboh, yesterday said the federal government has commenced implementation of the Bottom-up Cash Planning policy that would among other things increase certainty around budget execution and engender fiscal discipline.

Speaking during the opening of the sensitisation training on the Bottom-up Cash Management Policy in Abuja, he said though the implementation process had witnessed many unforeseen delays over 10 years of hiatus, the policy has now come to actualisation.

He said the cash management approach entails the collection and aggregation of government cash needs through individual spending units.

Okolieaboh said as part of the overall government cash management arrangement, the concept facilitates the optimal allocation and utilisation of government cash resources.

He said the objectives include to minimise the costs of holding cash balances; reduce risk (operational, credit and market risk); add flexibility to the ways in which the timing of government cash inflows and outflows can be matched; and support other financial policies.

According to him, the overriding objective of cash management was to ensure that the government was able to fund its expenditures in a timely manner and meet its obligations as they fall due.

The AGF, however, pointed out that the bottom-up cash management policy guidelines were approved by the Minister of Finance, Budget and National Planning on June 1, 2020, while President Muhammadu Buhari gave formal approval of its implementation on August 24, 2022, setting the stage for its rollout.

He said as a follow-up to the approval, a Treasury Circular was issued on February 2, 2023, notifying MDAs of the Go Live date of February 10, 2023.

According to him, the sensitisation event was meant to rally all directors and heads of finance and accounts towards ensuring the success of the policy because of their critical roles in the implementation of this important project.

The AGF said, “We can only succeed if every one of us does his own part. Indeed, the success of the bottom-up cash planning policy will rely heavily on your ability and willingness to play your own part. Being bottom-up, the process starts effectively with you.”

He also explained that bottom-up cash planning had been in the making since 2009 when the federal government initiated a feasibility study to determine the best strategies to address its cash management challenges as part of its Public Financial Management (PFM) reforms.

He said shortly after the pilot roll-out of the Government Integrated Financial Management Information System (GIFMIS) alongside the Treasury Single Account in April 2012, the process of implementing an efficient cash management system also commenced.