Hardly a public statement by President William Ruto or Treasury Cabinet Secretary John Mbadi ends without a boast that Kenya has, for the first time, implemented a Treasury Single Account (TSA).
Journalists treat politicians’ claims with a pinch of salt, so I visited the National Treasury to speak with the technocrat driving the reform: Director of Government Accounting Services, FCPA John Wala.
The government has started doing what should have been done years ago: finding out where its money is, bringing it under one roof, and using it before rushing to borrow. But Kenya does not yet have the full “press-a-button” financial system that citizens, suppliers and investors deserve.
What is a TSA? Think of government as a household with hundreds of wallets. Ministries, departments, agencies (MDA), counties, schools, projects and State corporations hold money in many commercial-bank accounts.
Some is needed tomorrow; some sits idle for months. Because the Treasury could not see all the balances, it sometimes borrowed from the market while public cash lay idle elsewhere.
Under Kenya’s model, public entities keep transaction accounts, but their balances are swept into a main TSA account at the Central Bank of Kenya at the end of each day. The Treasury can then plan payments better and reduce idle balances in commercial banks. A TSA is not just one bank account; it is one system for seeing and controlling public money.
Where are we? All ministries, departments and majority of agencies have been migrated into the TSA environment, The Treasury says the cost of overdraft financing from the Central Bank fell by 61 percent in FY 2025/26. Using idle cash instead of borrowing expensively saves taxpayers money.
The Treasury says it will clear pending bills in an orderly way by paying invoices according to age. The Treasury has also begun mapping accounts held by State corporations and semi-autonomous agencies, to see cash held in commercial banks even where those entities still run their own accounts.
Commercial banks are understandably unenthusiastic. Government deposits are large, cheap and relatively stable, and banks use them to fund loans.
If the TSA sweeps those balances to the Central Bank daily, banks may have to replace them with costlier deposits, borrow from one another, sell government securities or slow lending.
That is not a reason to abandon the TSA, but it is a reason to implement it carefully. MDA deposits in commercial banks were about Sh509.8 billion as at June 2023. Moving that much too quickly could tighten liquidity, raise interbank rates and squeeze credit to businesses and households.
The right approach is phased migration, daily or weekly sweeps, clear rules for operational accounts, and close coordination with the Central Bank.
Will the government stop borrowing weekly? No, but it should borrow less often and more cheaply. Salaries, debt repayments, county allocations, development projects and tax receipts never arrive in perfectly matching amounts, so Treasury bills and bonds will continue.
But a working TSA should cut borrowing caused by poor visibility. If the Treasury knows Sh50 billion lies idle in public accounts, it should not rush to the market for short-term cash. The biggest gain is not that Kenya stops borrowing, but that it stops borrowing blindly.
Nigeria offers both a warning and a lesson. More than 20,000 public-sector accounts were emptied of about N1.2 trillion within six months.
Government gained control of its cash, but studies found negative effects on deposit mobilisation, lending and bank liquidity, and interbank rates rose. If banks sell government securities to raise cash, Treasury-bill and bond yields can rise, partly cancelling the savings. The Treasury must therefore manage the TSA and debt issuance together.
A parallel reform is the shift from cash-based to accrual accounting. The TSA tells government where its cash is; accrual accounting tells it what it owns, what it owes and what it has promised to pay. Under the cash system, an unpaid supplier invoice stays largely invisible until it is paid. Under accrual, a bill is recorded when the service is delivered. That is central to solving the pending-bills crisis.
So, what was my final verdict after the chat with Wala? The Treasury deserves credit for moving. The TSA is no longer a policy paper: most MDAs are migrated, cash visibility is improving and overdraft costs have fallen sharply. But the country should not declare victory too early. A complete TSA must bring county, parastatal, school, project and donor-linked accounts under visibility and control.
The real test is simple: can the Treasury press a button and show citizens exactly how much public cash it holds, how much it owes each supplier, and which pending bills are oldest?
