By Henry Uche
In a bid to ensure financial discipline and prudence in the public sector, the House Of Representatives (HoR) has taken a taken a bold step to beam its searchlight on federal government cash flow on the Treasury Single Account (TSA) through Remita Platform, as part of its oversight function.
The green chamber passed the resolution during the plenary session yesterday after the adoption of a motion jointly sponsored by Jeremiah Umaru and Jafaru Gambo, lawmakers, from Nasarawa and Bauchi, respectively.
Remita is an online payment service provider owned by SystemSpecs, an indigenous financial services company. The platform is used by federal government agencies to remit revenue into TSA.
While moving the motion, Umaru, the lead sponsor, said though TSA has “created a cashless economy, transparency and effective tracking of cash assets with attendant accountability”, it has not “fully” blocked leakages and abuses.
The law maker maintained that one percent (1%) of the funds collected is being ‘charged as commission’ for making use of the platform and shared among SystemSpecs (owner), deposit money banks (processor) and Central Bank of Nigeria (CBN) (license issuer) in the ratio of 50:40:10, respectively’. “This is alarming and unacceptable,” he bemoaned.
The legislator claimed that despite the adoption and utilisation of the Remita platform, the ‘rate of revenue leakages is worrisome apart from non-compliance substantively with Standard Operating Procedures and other allied service level agreements signed by parties’.
“If this scenario continues unabated, the government will continue to experience a revenue shortfall and this will prevent the government from meeting the rising demand for good governance and infrastructural development from citizens.
“A larger percentage of deposit money banks has formed the habit of delay in on-ward remittance or sweeping of revenues collected to Central Bank of Nigeria” he maintained.
The motion was adopted when it was put to a voice vote by Tajudeen Abbas, speaker of the house. The committee on public accounts was asked to investigate the revenue leakages through Remita platform and non-compliance with ‘Standard Operating Procedures’ and other allied service level agreements signed among deposit money banks, office of the accountant-general, Systemspec, Nigeria Interbank Settlement System (NIBSS) and the CBN and report back in six weeks for further legislative action.
Speaking with a Lagos- based independent FinTech Analyst, Epa Stevens, he said the move seem to be consistent with the practice at the dawn of every new administration, where TSA and by extension the CBN, Office of the Accountant General of the Federation (OAGF), commercial banks and Remita-providers of the technology behind TSA become a perennial subject of inquiry.
Stevens posited that there seems to be assumptions by HoR, prior to implementation of TSA, that the Nigerian government managed 15,000 bank accounts for the MDAs, and now shifted the proliferation of accounts from deposit money banks to the CBN, allowing MDAs to create multiple sub-accounts, contradicting the TSA Policy.
“Contrary to the presentation of the motion of Remita being responsible for managing government revenue, the organisation has on several occasions including appearances at past legislative sessions, maintained that it is a CBN-licensed entity authorised to provide technology-enabled Payment Service Platforms and Services (PSSP). The organisation is not government-owned; instead, it is a fully indigenous technology company with a history spanning over 30 years, predating the implementation of the TSA.
“Launched in 2005 as an electronic platform facilitating payments for government, corporate organisations, Small and Medium Enterprises (SMEs), and individuals, it was subsequently selected as the TSA gateway in 2011 after competitive presentations, with the decision made by CBN and OAGF due to Remita’s effective fulfilment of requirements set by the Office of the Accountant-General”
The Fintech expert recalled that, in September 2015 the Federal Government of Nigeria (FG) fully implemented the TSA policy, requiring all its MDAs to deposit their funds in a single account held at the CBN, as opposed to continuing to maintain such accounts with Deposit Money Banks (DMBs), aimed to end the practice of banks lending government funds back to the government at excessive interest rates.
He said: “Since its full implementation, investigations reveal that contrary to regulatory efforts, certain government revenues, including those from the Nigeria Customs Service (NCS), Immigration, Nigerian Railway Corporation (NRC), and Federal Road Safety Corps and especially foreign currency based revenues, deliberately remain outside the TSA. With TSA funds consolidated through a singular channel, characterised by verifiable data imprints, any claims of fund leakages can likely be attributed to revenues not being collected within the TSA framework.
“Notably, even the National Assembly (NASS) does not seem to have been seamlessly integrated into the existing TSA framework since inception”
“The second allegation is somewhat similar to what happened in 2015 when Senator Dino Melaye, accused the CBN, Banks and Remita of exploiting the country by imposing a 1% fee on all transactions on the TSA and pocketing N25bn daily. However, the CBN roundly refuted his claims at the time until the matter was conclusively closed”
Based on publicly available information, and an official circular released by CBN in November 2018, five key entities are collaborating to facilitate TSA operations, playing integral roles throughout the process. These entities include the CBN, OAGF, NIBSS, Deposit Banks, SystemSpecs and other payment service providers.
“The publicised fee based on CBN circular and practical checks with revenue payer suggests that a flat fee of N150 per transaction was approved by CBN and applied on all TSA revenue collections.
“Regarding the third issue of deposit money banks potentially delaying the onward remittance or sweeping of revenues collected to CBN, the claim appears uncertain or assumed. As per TSA operational design, confirmed by banks and other industry layers, no bank in the TSA system can delay remitting revenue based on the configuration of the TSA system operated by Remita.
“The fourth allegation asserted that Remita defaulted in adhering to Standard Operating Procedures; however, it did not specify instances of such default. Remita has been instrumental in aiding various investigations conducted by preceding Assemblies while the Economic and Financial Crimes Commission (EFCC), Independent Corrupt Practises and Other Related Offences Commission (ICPC), and Nigerian Financial Intelligence Unit (NFIU) were able utilise the TSA infrastructure and Transaction monitoring system to meticulously track every transaction, facilitating monitoring and recovery processes”
He added that the impact of the TSA on public finance management over the past eight years was unmistakable, noting that the policy stands as a strategic move against corruption and the improper use of public funds.
“Powered by Remita, the TSA is regarded as one of the most significant initiatives ever undertaken by the Nigerian government to enhance accountability, transparency in the management of public funds. It has granted FG greater control over its finances, enabling unprecedented tracking of inflows and outflows. The present government appears opportune for consolidating the gains and extending the initiative to other nations”
The analysts highlighted that, beyond reducing corruption, the TSA also showcases the growing potential of Nigeria’s financial technology industry. As global competition intensifies and technology progresses, the imperative to leverage technology for the collaborative creation of value becomes crucial for national development.
“The government should commend Remita as a successful indigenous technology solution, with its achievements deserving consolidation and potential exportation to other countries seeking a more transparent financial system for their governments”
While it is essential to scrutinise all government processes for the improvement of our institutions, he said the persistent calls to investigate a platform that has consistently been found above board after numerous inquiries by the same organ of government is considered worrisome by many stakeholders.
“Instead of the repeat of the same issue, maybe it is time to look into other national technology issues like the failure of NIGOMSAT-1, current status of NIGCOMSAT-2, Digital Bridge Institute, GIFMIS, IPPIS, Abuja CCTV project, etc.
“Remita stands as a pace-setter in Africa’s technology space, and the innovative solutions it offers for public fund management and the private sector, it should be across Africa and the world as evidence of Nigeria’s competence to play in the global technology space” he affirmed.