Thereare indications that the Single Treasury Account, TSA, may be grounded, following the Central Bank of Nigeria, CBN, order suspending payment of fees and charges to parties operating the system. Vanguard learned that as a result of CBN’s, recent directive, banks and other stakeholders operating the system may abandon the project in protest over the suspension of their one per cent agreed fees and charges. Stakeholders have been directed to refund fees and charges they collected as a result of the operation of the TSA. The CBN had caused a letter dated October 27, 2015 to be written to Systemspecs asking for refund of all debits/charges into MDAs account.
The letter signed by Dipo Fatokun read in part: “I have been directed to inform you that you should refund all charges, 1% cost of collection made into MDAs account as a result of the implementation of the TSA. The total amount should be credited into the account – FGN Revenue e-Collection Pool Account at the Central Bank of Nigeria Account No 0020054161043. Since the cost of collection must have been shared by all the stakeholders, you are hereby required to also provide a schedule of the total amount collected and the portion that was shared to each of the three participants. The schedule should be prepared on month by month basis, from the commencement of the TSA implementation in March, 2015, to date. We will recover the share to CBN and DMBs. Please note that you are required to comply with the above directive, latest by Wednesday October 28, 2015”.
Documents sighted by Vanguard indicate that a total of N836.721 billion has been the inflow into the federal government coffer through the Single Treasury Account for which a fee of N7.628 billion was charged by both the banks and the facilitator of the TSA project, SystemSpecs. From documents sighted by Vanguard, the CBN is asking the banks to refund N3.053 billion into government treasury while the Central Bank of Nigeria is to refund the sum of N760 million. Systemspecs is also requested to refund N3.812 billion they collected as fees and charges. According to the official figures sighted by Vanguard, as at September 15, 2015, N152. 225 billion stood as the cumulative amount that was collected into the TSA account while N797. 717million was the fees due to Systemspecs. The figures also showed that as at October 27, the sum of N836.721 billion was the cumulative collection into the TSA and a total fee of N3.812 billion was due to Systemspecs.
Systemspecs in reaction to the CBN letter wrote to the CBN Governor on October 28 saying: “Let me, however, thank you sir, for your call of Friday, October 23, 2015 in which you ordered that Systemspecs should return all charges earned on the use of our Remita Collection platform. This was followed by your letter of October 27 delivered today. We have opted to obey your instructions for the following reasons: We defer to the high office of the Governor of the Central Bank. We have invested the last four years to prepare for the takeoff of the TSA project and would do all within our power to bring the project to full term despite this demoralising setback for us. We understand very well the strategic importance of the TSA project in the life of this Administration and would not want any avoidable distractions to becloud the bigger potentials of this project for our country.
“Having returned the money sir, please permit me to explain why you should return this money to us. You may want to recall Sir, that before Remita was engaged to implement the TSA project in 2011, CBN had written to Office of the Accountant General of the Federation, OAGF, that the project was not feasible for at least another two years. The initial thinking then was to use the RTGS to support TSA transactions before it was observed that the system is not built for retail and high volume transactions. When we signified our intention to provide a solution for TSA, we were told that Nigeria Inter-bank Settlement System, NIBSS, had also shown interest and the decision of which platform to use was left to a joint evaluation committee comprising of CBN, OAGF and external Consultants. Three times, we and N1BSS made competitive presentations to the joint evaluation committee. It was clear to the panel that the wholly Nigerian developed Remita effectively addressed all the requirements expected by OAGF and its external consultants to support TSA e-payment and e-collection of government receipts.
“Upon engagement, our team worked tirelessly with CBN officials to make the solution ready within a very strict timeline in order to meet the planned January 2012 launch date of TSA. It may further interest you to know sir, that in January 2012 when the foreign developed Government Integrated Financial Management Information System, GIFMIS, platform was not ready as scheduled, we were called upon by CBN management to deploy Remita directly to 108 Pilot MDAs in order to ensure commencement of TSA as planned. Accordingly Remita was the platform that provided end- to-end solution between January and April 2012 when GIFMIS became ready for roll out to take care of the accounting end. On the specific issue of the Collection Fees of 1 % which has become a topical issue and has assumed a life of its own please permit me to recall the context and some background milestones."
Systemspecs in another letter to President Muhammadu Buhari on the November 6 seeking a resolution of the matter said: “Our letter of June 26, 2015 and your kind response of August 31, 2015 on “Effective monitoring of Government Funds – The Treasury Single Account (TSA) Initiative” refers. We sincerely appreciate the confidence reposed in our wholly Nigerian software innovation to provide the technology that supports implementation of the TSA Initiative. Our e-Payment and e-Col/ection platform – REMITA, serves as the Payment Gateway for TSA. The system connects with the GIFMIS at the Office of the Accountant General of the Federation, Temenos T24 banking application at Central Bank of Nigeria (CBN) in addition to several systems provided by other Payment Service Providers to ensure seamless payment and collection of Government receipts across Ministries, Departments and Agencies (MDAs).
“Your Excellency, please find below some of the areas we have used technology to support the TSA scheme: We have created a platform that empowers Government to see at a glance the cash position of all participating MDAs on the TSA. Provision of the payment and collection platform for 705 MDAs currently enrolled on GIFMIS. Direct deployment of REMITA. to 754 MDAs that are either partially or self -funded to facilitate electronic payment and collection.
*Connection to all Commercial Banks and over 400 Micro Finance Banks in Nigeria. Empowerment of the citizenry to pay Government from any Commercial Bank branch, a growing number of micro Finance Banks and Agents, use of internet banking, mobile phones, debit and credit cards.
*Direct Credit of Government accounts at CBN typically within two (2) hours.
*Collection of over about N 1 trillion on behalf of the Federal Government between August to date, either as transfers from Banks or direct receipts from payers.
“Your Excellency, we are aware that you must have heard series of reports around the 1 % processing fees chargeable on e-Collections of Government receipts. We will like to provide some background on these issues sir.
SystemSpecs was engaged to provide the Payment Gateway for TSA in 2011. While the payment leg of TSA commenced in January 2012, the collection component did not start as scheduled due to the resistance from a number of quarters and the absence of the political will to push this through “In 2013, CBN and OAGF setup a multi-stakeholder implementation committee and organised a Joint seminar with key stakeholders including Banks to agree on the formalities for commencement of e-Collection. The Banks proposed a fee of 5% to compensate for the fact that they would no longer keep float. The implementation committee however recommended 2.5% after negotiation with the Banks. The then AGF later approved 1 % as processing fee which was in turn communicated to all the stakeholders through CBN in December 2013. Subsequently, we executed a contract with CBN and other stakeholders involved on the provision of services to support TSA.
“Based on the increased scope of the TSA project following your directive in August 2015 for all MDAs to join the scheme, we had highlighted the need for a stakeholder meeting to discuss the TSA e-Collection fees. This was communicated to both CBN and OAGF. Instead of an invitation for a stakeholders meeting as requested, we received a directive from the CBN Governor to refund ALL TSA e-Collection fees earned to date and to suspend all charges on the platform. SystemSpecs has since complied fully with this directive and refunded all monies earned to date to CBN. This we did in good faith and without prejudice, to avoid distractions that could becloud the bigger potentials of the TSA project for our country.
“While we await clarification from OAGF/CBN on the way forward, we have since suspended all TSA e-Collection fees on the platform. This means that none of the TSA collection parties/channels are earning any fees for providing services to Government. This position is however not sustainable as the collection partner Banks are threatening to suspend FGN TSA collections. This would clearly be playing into the hands of those who do not wish this initiative to succeed. We understand the strategic importance of the TSA project to this Administration and the country at large. We have demonstrated good faith and continued commitment to the project in the last four years to deliver on our mandate. We will continue to do all within our power to bring the project to full term. Your Excellency, we would appreciate your kind and urgent intervention to ensure a speedy resolution of this matter before the Banks stop collections.
“In line with the subsisting contract and your assured commitment to the rule of law, we humbly request sir, that the fees earned by ourselves and the Banks to date be returned to us and our partner Banks. In view of the enlarged scope and the need to review the process, we humbly request sir, that you direct a meeting of relevant stakeholders be conveyed to agree a sustainable pricing model going forward. We solicit the continued political support of the TSA initiative by your Administration for this initiative that offers far more to our nation beyond the immediate take-off issues”.