Zero Balance Drawing Account for Budget Users - Technical Note

In many countries, there is the proliferation of government bank accounts, which are used by line ministries and agencies to conduct their transactions. A common arrangement in some anglophone African countries is the practice of making regular (often monthly) transfers from the main exchequer account to accounts operated by spending ministries. The size of these transfers is often based on expected outflows (expenditures) during the month or on the basis of commitments . An approach that East AFRITAC has been advocating to countries in the region is to adopt the Zero-Balance Accounts (ZBAs) as described in this technical note, which is consistent with the adoption of a Treasure Single Account (TSA).

The ZBA arrangement can yield immediate improvements to the management of budgetary resources including more efficient use of cash. Under the arrangement, funds will be disbursed from the main Exchequer account at the time that outgoing payments are debited to the ministries’ bank accounts. This obviates the need for positioning resources in different accounts and for various projects by different ministries/departments. This arrangement has the effect of concentrating cash resources only on the main Exchequer Account. With the resources now concentrated in the Exchequer Account, the approach also opens the avenue for the more judicious usage of resources and possible reduction of government overdraft.

Technical_Note-ZeroBalanceDrawingAccount.pdf


Source: East AFRITAC

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