- REMITA should be reviewed
Allegations of fraudulent practices concerning the Treasury Single Account (TSA) have highlighted the need to undertake a comprehensive review of REMITA, the e-collection platform on which it is based.
The most serious of the charges appears to be the claim that N25 billion had been fraudulently received by SystemSpecs, REMITA’s owners, ostensibly in transaction fees via the TSA scheme, allegedly in violation of Section 162 (1) of the 1999 Constitution. The Trade Union Congress (TUC) further complicated matters by alleging that REMITA was bringing in N25 billion a day for the company. The Senate has directed its Joint Committee on Finance, Banking and other Financial Institutions and Public Accounts to investigate the matter.
As a unified structure of government bank accounts, which provides a consolidated view of its cash resources, the TSA’s advantages cannot be over-emphasised. This is even more so of Nigeria, where the massive misappropriation of public funds has convinced the Buhari administration to fully implement the TSA programme which began under his predecessor, former President Goodluck Jonathan.
Since its full operation commenced in August, it has seen government revenues flow from the nation’s banks to the Central Bank of Nigeria (CBN). Banks which attempted to conceal accounts have been penalised, while revenue-generating parastatals whose operations might be hampered by TSA have been granted waivers.
The huge quantum of cash in government revenues remitted to the CBN has attracted questions regarding the size of SystemSpecs’ transaction fee. In contrast to the allegations that it took N25 billion, whether daily or as a total sum, the company has said N7.62 billion was collected in transaction fees since the scheme commenced in May 2012, and was shared by SystemSpecs (50 per cent), the 20 participating banks (40 per cent) and the CBN (10 per cent). The company also claims that transaction volumes reached N1.36 trillion, as opposed to the N2.5 trillion being alleged by its traducers.
These controversies point to other issues. Since REMITA is essentially software, why is it that there does not appear to be the option of making a one-time or periodically-renewable payment for licensing it, as is the case for other banking software? There is the similarly fundamental question of exactly how the deal was struck, especially how the sharing formula of the transaction fee was arrived at. It does seem to be obvious that SystemSpecs is picking up a princely amount for what amounts to merely the installation of software.
It has been argued that the one per cent transaction fee is relatively low, and is apparently better than the higher percentages negotiated by various collection agencies that existed before the TSA. However, the sheer size of the transaction volumes makes a compelling case for a reduction, possibly to 0.5 per cent; there is no reason why a government cost-reduction measure should become a major profit centre for a private firm.
A comprehensive review of the TSA would have several benefits. It would reassure those who have misgivings about it; it would be in keeping with the transparency and accountability mantra of the Buhari administration; it would be part of a process of continual refinement which can only make the platform’s operations more efficient.
As the country adjusts to the necessarily rigorous demands of the TSA era, Nigerians would do well to avoid criticising the e-collection platform for partisan political purposes. A number of political figures from the Peoples’ Democratic Party (PDP) have excoriated the TSA system and have latched on the N25 billion controversy as proof of their allegations. Given the party’s inability to fully implement the system when it was in power, such accusations are unhelpful and do not lessen the advantages of the system. If the TSA is reviewed in good faith, it will be to the benefit of all.
