Kenya’s Treasury Targets Idle Billions in Banks with New Tracking System
This is the first phase of implementing the Treasury Single Account (TSA), a financial reform by the National Treasury in collaboration with the Central Bank of Kenya (CBK). The platform allows the CBK to monitor all government linked accounts for transparency and efficiency.
According to Jonah Wala, a director at the Treasury, this follows a failed audit last year when commercial banks gave the government unreliable information about government deposits. “We now have a system that allows the CBK to see all accounts in real time. It’s currently being tested,” he said.
The system is a monitoring tool that maps every account to its respective ministry or agency. Wala explained that when money sits idle for several months the Treasury will be able to recall it and reallocate it to priority projects instead of borrowing at high interest rates.
No More Interest Earnings for State Bodies
Ministries and state agencies used to earn interest—currently 8.07%—on idle deposits. That’s gone. Instead the government will cut borrowing costs by redirecting these idle balances.
State bodies will be notified when funds are withdrawn for reallocation. “If we see your account hasn’t moved for three or four months we’ll retrieve the funds and use them for urgent needs. Once the government has surplus funds they’ll be returned to your account,” Wala said.
The timelines for recalling funds have not been finalised but the Treasury confirmed there are “quite a number” of dormant balances across ministries and agencies. The TSA will require all ministries to operate their accounts directly with the central bank while state corporations can use commercial banks but only if they actively use their funds.
This is a big shift in Kenya’s public finance management and the government is banking on efficiency, accountability and reduced borrowing costs.
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Kenya’s Treasury Targets Idle Billions in Banks with New Tracking System