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Tag: TSA

  • Why TSA gains should be preserved for Nigeria’s economic future

    Why TSA gains should be preserved for Nigeria’s economic future

    The Treasury Single Account (TSA) is one of the crucial policies instituted by the Federal Government to transform Nigeria’s public accounting system.

    In an era where public trust in governance is hard-won and easily lost, the TSA stands as one of Nigeria’s boldest steps toward redefining public finance. It is more than a system of accounts; it is a declaration that national resources must serve national interests transparently, efficiently, and with technological pride. The TSA proves that when policy aligns with purpose, transformation becomes inevitable, among several other benefits to the economy, which should be preserved.

    When historians document the turning points of Nigeria’s public financial management system, the full implementation of the Treasury Single Account (TSA) under the Buhari administration will occupy a deservedly prominent place. In an era often characterised by fragmented governance and entrenched leakages, the TSA offered a bold and disruptive correction: the consolidation of federal government finances into a single, transparent account maintained by the Central Bank of Nigeria (CBN). It was a reform that reimagined how public funds should be managed, establishing accountability where opacity once reigned.

    Before the introduction of TSA in 2012, the Nigerian government operated in a financial maze of over 17,000 disparate accounts, scattered across various commercial banks. This fragmentation not only weakened the government’s ability to monitor its revenues but also allowed funds to sit idly, uncoordinated, while the government borrowed heavily at high interest rates to finance critical projects. The system lacked oversight, incentivised mismanagement, and made the consolidation of public finances a near-impossible dream.

    The TSA was Nigeria’s answer to this dilemma. It was not a mere policy adjustment but a structural reform aimed at uprooting decades of bad financial habits. By compelling all Ministries, Departments, and Agencies (MDAs) to transfer their balances to the CBN, the government reasserted control over its cash resources. The TSA made it possible for Nigeria to know its true financial position at any given time, an elementary requirement for any serious nation seeking to manage its economy responsibly.

    The economic logic behind the TSA was impeccable. By centralising previously idle funds, the government decreased its need to borrow at high interest rates from commercial lenders. It also curtailed the longstanding practice where banks used public funds to fuel private-sector loans while government ministries struggled to meet budgetary obligations. Financial institutions could no longer feed fat on public resources without adding corresponding value to the economy.

    Read Also: Two years of Tinubu’s impactful economic policies

    At the heart of TSA’s success is one of the operators, Remita, a homegrown payment gateway developed by SystemSpecs, now Remita Payment Services Limited. Designed by Nigerians, Remita integrates the operations of MDAs with commercial banks, microfinance institutions, and the CBN. It handles both revenue collection and expenditure, providing the government with real-time visibility into its cash flows.

    Importantly, Remita is not the TSA itself. The TSA is the policy framework that governs how funds are managed, while Remita provides the technology that executes those directives with accuracy, security, and scalability. This distinction is vital, as it underscores the importance of aligning sound public policy with capable indigenous technology. It shows the power of local solutions in addressing national challenges.

    The impact of the TSA has been far-reaching. The government recovered over ₦3 trillion from more than 17,000 previously idle or hidden accounts. By 2019, over $28 billion had flowed through the system, involving 1,674 MDAs. This centralised view enabled more accurate budgeting and allocation of resources. Wasteful expenditures were curtailed, and fiscal priorities were better reflected in government spending.

    The cost savings were also substantial. Monthly bank charges of over ₦24 billion were eliminated. Additionally, the government significantly reduced its “ways and means” borrowing from the CBN, which had previously attracted high interest. This adjustment saved more than $125 million per month in interest payments. Agencies like JAMB, once criticised for low remittances, began posting record revenues. These improvements were not coincidental; they were outcomes of a well-structured system.

    The TSA’s implementation was so pivotal that former Minister of Information and Culture, Lai Mohammed, credited it with preventing Nigeria’s economic collapse. He praised the policy for enforcing fiscal discipline, fostering transparency, and empowering the government with critical resources to withstand severe economic challenges.

    Globally, the TSA has been recognised as a model reform. Both the World Bank and the IMF have praised Nigeria for its bold and effective approach to cash management. The TSA positioned Nigeria as a continental leader in public financial reform and inspired other African nations to replicate similar frameworks.

    Beyond improved financial controls, the TSA has become a symbol of a new governance philosophy. It shows that structural transformation is achievable when policy, technology, and leadership work in concert. Moreover, it affirms the capacity of local technology companies to deliver solutions at scale, countering the long-held belief that core infrastructure must be imported.

    It is problematic when a country fails to support its most impactful homegrown innovations. Remita’s contribution is not just technical; it is symbolic of what Nigeria can achieve when it invests in its own talent. To undermine such a system is to weaken national capacity and discourage future innovation.

    Backing indigenous technology is not only fair but essential for strategic development. Countries around the world are prioritising digital sovereignty by investing in local solutions. Nigeria must do the same. Recognising and fairly compensating technology partners like Remita is sound policy and a strong signal to the innovation ecosystem.

    As Nigeria reflects on ten years of the TSA, the focus should now shift to sustainability and improvement. The reform has delivered immense value, but there is room for refinement. The government should prioritise reconciling with technology stakeholders to properly document achievements, address operational bottlenecks, and co-develop strategies for optimisation.

    Next steps include onboarding all revenue-generating agencies, strengthening user training, improving system interfaces, and maintaining adaptability to changing economic conditions. Consistency in policy implementation is also crucial. Undue politicisation or frequent reviews could weaken confidence in the system. Equally important is a shift in institutional culture. Agencies and leadership must learn to value long-term partnerships, reward merit, and see innovation as a catalyst for national progress.

    The TSA is a landmark achievement in Nigeria’s governance history. It has enhanced fiscal discipline, increased transparency, boosted revenue, and restored a measure of integrity to public finance. More than that, it has proven that Nigerian-led solutions can succeed on a national scale. However, this legacy requires deliberate preservation.

    As the years pass, Nigeria must continue to nurture and improve upon the TSA. Technology must be leveraged to further enhance the system’s efficiency, responsiveness, and security. Legislative and institutional frameworks must be strengthened to ensure compliance, while public education campaigns should be launched to deepen citizens’ understanding of their value.

    In celebrating the TSA, we celebrate not just a technical achievement but a moral victory, the assertion that Nigeria can, and must, govern itself better. The TSA is a story of possibility, proof that even the most daunting reforms are achievable when there is political will, clear vision, and national commitment.

    The TSA has done more than consolidate funds; it has consolidated a vision of what Nigeria can become. By safeguarding and building on this success, we defend not just a policy, but a future of greater accountability and national self-reliance. As Nigeria continues its journey toward economic diversification, fiscal stability, and sustainable development, the TSA will remain a cornerstone of that journey, silent, steadfast, and indispensable.

  • AGF issues guidelines for exclusion of university research grants from TSA

    AGF issues guidelines for exclusion of university research grants from TSA

    The Accountant General of the Federation (AGF), Dr. Oluwatoyin Madein, has released guidelines for the exclusion of third-party research grant funds of Federal Universities and Research Institutions from the Treasury Single Account (TSA).

    The Office of the Accountant General of the Federation (OAGF) in a statement issued in Abuja on Thursday announced that these guidelines are contained in a federal treasury circular issued by Dr. Madein, are to be implemented immediately. 

    The guidelines follow President Bola Tinubu’s approval to exempt research grants and endowment funds of federal universities and research institutions from the TSA policy.

    A key aspect of the guidelines mandates that Federal Universities and Research Institutions must secure approval from the AGF before opening research grant or endowment fund accounts with commercial banks. 

    However, all other institutional accounts must remain with the Central Bank of Nigeria (CBN).

    Dr. Madein also emphasized that all research grants and endowment funds must be backed by well-executed Memoranda of Understanding (MOUs) between the institutions and the granting bodies. 

    Read Also: AGF Fagbemi, Osigwe ask courts to promote peace, development via judgments

    Furthermore, the OAGF will maintain a list of all research grant and endowment fund accounts opened by these institutions under the presidential approval.

    “The management of these accounts, including accounting and reporting of transactions, shall be restricted to the Bursary/Accounts Departments of the tertiary institutions,” Dr. Madein clarified. 

    She stressed that these accounts are strictly for receiving grants and must not be used for other public funds. Additionally, they will not be regarded as operational accounts for the institutions.

    Institutions are required to submit annual returns, including bank statements and reconciliation reports, to the OAGF for incorporation into the government’s General Purpose Financial Statement (GPFS). The institutions must also comply with the TSA/e-collection policy guidelines.

  • TSA: report shows Remita’s contributions to economic growth

    TSA: report shows Remita’s contributions to economic growth

    The implementation of the Treasury Single Account (TSA) through Remita, has promoted  transparency across ministries and agencies’ in public account management.

    At the forefront of TSA’s success is Remita, an e-payment platform developed by SystemSpecs to drive the accounting practice, has faced controversies over its contributions to economic growth.

    A report released at the weekend said the House of Representatives and the Senate had enquired over Remita’s operations and revenue collection processes.

    The report said the concept of TSA required all Ministries, Departments, and Agencies (MDAs) to deposit their funds into a single account held at the Central Bank of Nigeria (CBN), marking an end to the previous practice where funds were scattered across various Deposit Money Banks (DMBs).

     “The implementation aimed to curb the practice of banks lending government funds back to the government at exorbitant interest rates, which had been a significant drain on the nation’s resources. Before the advent of TSA, Nigeria’s financial landscape was fragmented, with over 17,000 government accounts dispersed across various banks. This disarray rendered the monitoring and management of public funds nearly impossible. The introduction of TSA signaled a significant shift towards fiscal responsibility,” it said.

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    Also, the consolidation of these accounts under the aegis of the Central Bank of Nigeria (CBN) has been instrumental in curbing corruption and enhancing the government’s capacity to manage its resources.

     “The pivotal moment was the selection of SystemSpecs’ Remita to facilitate this monumental task. Remita’s robust technology provided the necessary infrastructure to handle the intricate web of transactions, proving to be a cornerstone in the success of TSA. Remita’s selection to operate the TSA platform followed a thorough competitive process. The government’s quest for a robust e-payment and e-collection system for government receipts initially led them to consider the Nigerian Inter-Bank Settlement System (NIBSS), jointly owned by the CBN and commercial banks. However, after a series of rigorous evaluations and competitive presentations, it became clear that Remita was the superior choice,” it added.

    Continuing, it said the platform effectively addressed all the requirements laid out by the Office of the Accountant General of the Federation (OAGF), CBN, and their external consultants. Remita’s ability to support TSA’s e-payment and e-collection of government receipts was unmatched, showcasing its technological edge and readiness to handle the nation’s fiscal operations.

    Remita’s success demonstrates Nigerian technological prowess, offering a superior solution when other foreign RTGS systems proved inadequate for the federal government’s payment needs. The SystemSpecs’ indigenous solution not only met the requirements but also exceeded expectations, earning the platform international recognition and accolades.

    The financial milestones achieved through TSA are remarkable. By December 2015, over N3 trillion had been remitted into federal coffers, marking a stark contrast to previous years where such inflows were susceptible to diversion. The TSA’s role became even more pivotal as Nigeria navigated the economic turbulence caused by plummeting oil prices. The savings accrued via TSA provided a much-needed buffer, underscoring the initiative’s strategic importance in national economic recovery efforts.

    Despite Remita’s significant contributions to Nigeria’s economy, the company often finds itself under scrutiny with each change in government. This treatment sends a dangerous message to upcoming generations of patriotic Nigerians and the outside world that the time-honoured virtues of business integrity, accountability, diligence, professionalism, and patriotism might not matter in this clime.

    While investigations are essential for ensuring transparency and accountability, Remita’s consistent performance and commitment to transparency warrant a shift in perspective. Instead of being subjected to repeated investigations, perhaps the focus should be on leveraging Remita’s efficiency and expertise to further bolster the government’s revenue collection efforts. It’s crucial to remember that Remita’s success translates to the government’s success

    The TSA initiative, powered by Remita’s technology, has given Nigeria control over its finances and unparalleled tracking capabilities. his success presents a prime opportunity not only to solidify these advancements but also to consider their application beyond national borders.

    Despite persistent scrutiny, which some have termed a relentless pursuit, Remita’s story serves as a compelling case study for economic diversification and fintech innovation, demonstrating the power of local ingenuity to drive systemic change. Its novel solutions for public fund management and private sector contributions make it a beacon of indigenous innovation, worthy of international emulation.

  • Matters Arising as House of Reps Moves to Investigate TSA

    Matters Arising as House of Reps Moves to Investigate TSA

    In the perennial cycle of governmental transitions, the 10th House of Reps has embarked on its own round of oversight functions that seeks to review the 10-year-old FGN TSA policy and its operations.

    This seems to be consistent with the practise at the dawn of every new administration, where TSA and by extension the CBN, OAGF, commercial banks and Remita-providers of the technology behind TSA become a perennial subject of inquiry.

    Consequently, some honourable members of the house namely Hon. Jeremiah Umaru and

    Hon. Jafru Gambo have initiated a motion to instruct the Committee on Public Accounts to investigate “revenue leakages via the Remita-TSA Platform and substantial non-compliance with Standard Operating Procedures and other related Service Level Agreements.” These agreements were assumed to have been reportedly signed by the CBN, Deposit Money Banks (DMB), the Office of the Accountant General, SystemSpecs-owners of Remita, and the Nigeria Interbank Settlement System (NIBSS), and the committee is expected to report back within six weeks for further legislative action.

    Specifically, these honourable members are seeking to obtain clarification on the following issues.

    1. Establish if the TSA has substanitally fulfilled its intended purpose of fully blocking fund leakages and abuses resulting from the proliferation of CBN Sub-Accounts.
    2. Verify if a 1% commission fee applies to all the service providers in respect of all funds collected through the TSA platform, with a distribution ratio of 50:40:10 among SystemSpecs, Banks, and the CBN.
    3. Ascertain if a significant number of deposit money banks tend to delay the onward remittance or sweeping of revenues collected on the TSA platform to the CBN.
    4. Establish if the TSA technology platform has defaulted on Standard Operating Procedures and Service Level Agreements as contained in its contractual terms

    Amidst these concerns, certain assumptions seem to have been made by the HoR that before the implementation of TSA , the Nigerian government managed 15,000 bank accounts for the MDAs and that the proliferation of accounts has now shifted from deposit money banks to the CBN, allowing MDAs to create multiple sub-accounts, contradicting the TSA Policy. Before delving into the complexities of these current matters, which, to some extent, echo perennial issues, it is deemed essential to comprehend the underlying backdrop.

    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.

    Remita was launched in 2005 as an electronic platform facilitating payments for government, corporate organisations, Small and Medium Enterprises (SMEs), and individuals without stress. It was subsequently selected as the TSA gateway in 2011 after competitive presentations, with the decision made by the Central Bank of Nigeria and the Office of the Accountant General of the Federation due to Remita’s effective fulfilment of requirements set by the Office of the Accountant-General.

    To address the first allegation by the aforementioned honourable members, it is pertinent to note that, in September 2015the 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). This move aimed to end the practice of banks lending government funds back to the government at excessive interest rates.

    However, 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, the 2023 Kogi State Governorship aspirant and then lawmaker representing Kogi West Senatorial District, accused the CBN, Banks and Remita of exploiting the country by imposing a 1% fee on all transactions on the TSA and pocketing N25 billion daily. However, the CBN roundly refuted his claims at the time until the matter was conclusively closed.

    Read Also: Nigeria loses $500 yearly to cybercrimes, says Senate

    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 is 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 the Central Bank of Nigeria (CBN), the claim appears uncertain or assumed. As per the design TSA operational design as 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) are able utilise the TSA infrastructure and Transaction monitoring system to meticulously track every transaction, facilitating monitoring and recovery processes.

    The impact of the TSA on public finance management over the past eight years is unmistakable. The policy stands as a strategic move against corruption and the improper use of public funds. Powered by Remita, a widely celebrated indigenously developed financial technology platform, the TSA is regarded as one of the most significant initiatives ever undertaken by the Nigerian government to enhance accountability, transparency, and combat corruption in public fund management. It has granted the government greater control over its finances, enabling unprecedented tracking of inflows and outflows. The present moment appears opportune for consolidating these gains and extending the initiative to other nations.

    Analysts highlight 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 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, 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 merit government-promoted replication across Africa and the world as evidence of Nigeria’s competence to play in the global technology space.

    Epa Stevens

    Lagos Based FinTech Analyst

  • Punish 40% IGR deduction initiator. Grants and TSA

    Punish 40% IGR deduction initiator. Grants and TSA

    President Tinubu has suspended as inappropriate timing, the massively condemned ‘40% federal deductions from tertiary institutions’ so-called Internally Generated Revenue’. President Tinubu, please also remove university grants from having to be deposited in the TSA.

    Is the 40% deduction suspended or cancelled? Perhaps it will be cancelled or remain a sword of Damocles against other government organs but especially tertiary institutions at the whim of National Assembly, NASS, the ministries of education and finance, the accountant general’s or auditor general’s offices, which could abuse office and ‘disappear’ the 40%, once seized.

    Yes, this law is an ass, a general law but it was maliciously applied, demonstrating malicious or vengeful intent against the educated class or total ignorance of the funding and financial struggles of tertiary institutions and their primary constituency, students, parents and guardians. The law reduces developmental manpower for the country. It is terrorism, and deserves to be treated as terrorism, because such laws are destructive of academic initiative, paralyse performance and destroy the desire to aim for an excellent impact and stunt national growth.   

    The officer who implemented the law against the education institutions is not to be overly blamed because if he did not try to implement an existing law, he may have been found guilty of negligence of duty or ignorance of the law. However, it is a very fiscally and politically sensitive matter, the implementation of which would certainly cripple the universities struggling to compensate for deliberately poor federal government subventions. It could cripple any compensatory creative approaches the struggling universities initiate to supplement failed federal funding. The officer involved should have suggested to his minister or the decision chain that the matter be decided by the president for ‘political fallout risk assessment’.

    Presidents do not like to reverse policy, even stupid policy, especially when a good ‘Policy Risk Assessment Meeting’ would have killed the problem before announcement.

    So, on the counts of naivety, arrogance and pure insensitivity, that person should be reprimanded, demoted and punished to teach administrators the bitter lesson that decisions do destroy citizens lives.

    Time and time again Nigeria is put at risk, loses billions on bad contracts or is made to look stupid in the public and international eye by the action and inaction of its often high-up officials charged with policy making or implementation. And when they screw it up, the country and its citizens go through agony and suffering. But please note that there is never any apology to the citizens or reparations offered. Unfortunately, they are not even investigated but let off free, without even a query, an inquiry, a judgement, a reprimand or more severe punishment. Nigeria can trace who made that 40% law by going through the minutes of meetings and other records.

    Read Also: NASS legislative aides lament 15 months unpaid salaries

    We must not let this slide or we will continue to have bureaucrats with more immunity than the NASS politicians from the extremely dangerous consequences of their actions. Too often, initiators of poorly thought-through government policies escape in a blaze of retirement glory leaving the citizens to suffer from their incompetence. The person who initiated or suggested the ‘40% deduction should be summoned if retired, stripped of national honours, denied national honours in future and forced to apologise in public for such a stupid law. It is only such an action which will make other civil servants, political appointees and special assistants step back from being overzealous in their actions and destabilising the country. Nigeria deserves and expects and demands much better from its employees, be they civilian and political.

    It was hoped that President Tinubu would also respond to the call reinvigorated just two weeks ago when the issue of the need to extract university grants from being compulsorily included in TSA, Treasury Single Account, was discussed in this column. This step has severely reduced grant inflows because of the difficulty of accessing the funds by recipient researchers as and when required leading to financial and administrative bottlenecks and inefficient execution of research projects resulting in delays in timelines and failure to meet research deadlines thus disgracing the researcher, the department and the institution given the grant. Nigeria’s academic landscape is already being painted for the international research grant donors as one with a high risk of grant outcome failure to deliver research due to the TSA trapped funds stifling research.

    Our youth manage somehow to shine through the quagmire governments offer them as education in sometimes disgraceful settings. Every school and tertiary institutions would be much worse off without such grants, alumni, parents, guardians, scholarships and bursaries. 

    We are hoping for larger education budgets, millions of scholarships and bursaries at state and LGA level, child and teacher friendly classrooms, libraries and clean toilets in schools. But the political class abandoned its primary responsibility to the citizenry and instead selfishly spent N160m/jeep/NASS member (shamefully the minimum wage of 5,333.3 workers x360 NASS members =1,920,000 minimum wage workers salaries) amounting to many billions for NASS and then Presidency, first lady vehicles. Politicians and corruption are mainly responsible for our destructive rubbish naira value. Politicians must ‘calm down’ and temper  greed with political sagacity and should have had the political wisdom to postpone by  6-12 months the multibillion purchase of vehicles, spread the payment over four years, and transfer that budget to education, health, roads and transportation. That decision would have allowed the country slightly recover financially before heavier irresponsible political financial burdens.

  • FCT directors hail Tinubu, Wike over Civil Service Commission, exit from TSA

    FCT directors hail Tinubu, Wike over Civil Service Commission, exit from TSA

    President Bola Tinubu and Federal Capital Territory (FCT), Minister, Nyesom Wike have been commended for the establishment of FCT Civil Service Commission, Women Affairs Secretariat and exit of the FCT Administration from the Treasury Single Account (TSA). 

    This commendation was made by serving and retired directors of the Federal Capital Territory Administration who added their voice to the gale of commendations that have followed the President’s decision and Wike’s use of magic wand as FCT Minister since resumption. 

    Speaking to a section of the media over the weekend under the aegies of League of Serving and Retired FCTA Directors, through its Chairman, Mr. Lukeman Eramosele, the staff lauded Mr. President and FCT Minister: “for recording the landmark administrative reforms to reposition the FCTA bureaucracy for unprecedented physical and human development”.

    They expressed delight and gratitude to the duo for his courage, foresight and political will to effect this far-reaching financial and structural reforms in barely two months, saying it would definitely take the FCT to an enviable level of development. 

    Eramosele was reacting to recent cheering news the Minister broke during Friday press conference in his office that President Bola Tinubu has approved creation of the much awaited FCT Civil Service Commission, exit of the FCTA from the Federal Government’s Treasury Single Account (TSA), and establishment of  and Women Affairs Secretariat dedicated to handling women issues in the FCT. 

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    Eramosele who particularly lauded establishment of the Commission said that unlike some of the retirees who left the service without the opportunity of progressing beyond a director in the service, his serving colleagues, and those to come after them, were blessed with the opportunity of becoming even head of civil service of the federation. 

    He said: “The President and the FCT Minister have done very well by seeing the imperative and taking the bull by the horn in making the FCT Civil Service Commission operational within a record period of barely two months. 

    “Even though, some of us missed out because certain people in power could not muster the boldness and courage to establish this Commission for us, I am indeed very delighted for those my colleagues who are still in the service, including those who will enter the service later.

    “With Wike, the things we prayed and fasted for for years without results are happening with ease in record tims of his exemplary leadership. 

    “Staff no more have reasons to complain but give their utmost best because their career progression limit has been extended and their future is now assured, no more stagnation and delayed promotions.”

    Appealing to the Minister to look further into issues surrounding staff welfare, including the staff Cooperatives, he revealed that more than 87 percent of the staff live outside the FCT and should be properly accommodated, as well as given access to land, which is their only resource.

    “There is no doubt that this will, in no small measures, boost staff confidence, ensure satisfaction, improve staff welfare, thus resulting into high productivity, all for the benefit of FCT residents and all Nigerians.  

    “I am sure some of you do not understand the import of what Mr. President and the honourable Minister have done, but as things unfold, impact of this highly commendable decision will be felt far and wide”, he said. 

    Commenting on the pullout from TSA, Eramosele said it would make available funds from its huge Internally Generated Revenue which would be ploughed back into infrastructural development and service provision, making the era of abandoned projects in Abuja a thing of the past. 

    He therefore called on residents and staff of the Federal Capital Territory Administration to give the President, the Minister and his team the maximum support to implement their laudable policies and programmes to better the lives of residents and Nigerians.

  • TSA and Next Level

    For the next few weeks, I am going to take this space to the next level by speaking above whispers on issues that I feel will help make this dispensation better and in the interest of Nigerians. I will x-ray policies and decisions from the last dispensation and give my take on what should be done about them in this dispensation.

    The springboard for me would have been the presidential inauguration speech.  Two days ago, President Muhammadu Buhari took the oath of office at the Eagle Square in Abuja. The ceremony began necessary having defeated Peoples Democratic Party (PDP) candidate and ex-Vice President Atiku Abubakar. Not a few attribute his success at the poll to his cult following in key areas of the country.

    At the inauguration, Nigerians looked forward to an inauguration speech in which the president would spell out how he would arrest the insecurity in the land, how the biting poverty will be addressed and how his strict monetary policies will make things better for the people. But for reasons best known to the president, he refused to give an inauguration speech and thus dashed the hope of those expecting him to give a direction of what to expect in the next four years.

    In the absence of an inaugural speech, I am turning to what perhaps is the ‘biggest’ achievement of the last dispensation: the full implementation of the Treasury Single Account (TSA) policy. The full implementation began in September 2015. This policy is an International Monetary Fund (IMF)-recommended cash management policy, which mandates all governmental funds to be managed in a single bank account or at the most a set of linked accounts.

    The Dr Goodluck Jonathan administration had carried out a pilot scheme. The administration directed Ministries, Departments and Agencies (MDAs) to close all their accounts in commercial banks. The money was thereafter moved into a single account at the Central Bank of Nigeria (CBN). For the full implementation, on August 7, 2015, the President compelled MDAs to close their accounts with commercial banks and transfer their balances to the CBN on or before September 15 of that year. By this action, he gave life to this policy launched in 2012 but left unimplemented. This resulted in the consolidation of over 20,000 bank accounts. An average of N4.7 billion is saved monthly in banking charges.

    The era of some MDAs having idle cash in banks and still borrowed exorbitantly from banks is gone for good.

    To drive this process, the Federal Government chose Remita, a payment channel run by SystemSpecs. But, as typical of anti-change elements, some banks refused to cooperate with the payment channel. However, with a Federal Government hell-bent on implementing the policy, the disgruntled banks were cut to size.

    So far, the national treasury has been saved over N8.9 trillion that would have gone as bank charges. Despite this, not a few still see the TSA as one of the ruses of the Buhari administration. If only they can ask the banks to give details of what they are losing to the TSA!

    Good as the TSA is, a number of huge revenue generating MDAs are not fully complying with the policy. They have kept seeking total exemption from the policy, which I believe should never be granted.

    The success of the TSA has attracted international and continental attention. A team from the Republic of the Gambia, which came to Nigeria for two weeks to understudy the process, just departed. Soon, The Gambia will replicate the scheme. The country’s Accountant-General and head of the delegation, Momodou Lamin Bah, said they came to Nigeria after the IMF cited Nigeria as a good example worth emulating.

    During the visit, the team held discussion with major stakeholders, including SystemSpecs, the 27-year-old Nigerian firm, which in 2011 got the nod to drive the process. The bidding process involved the Nigeria Interbank Settlement System (NIBSS) and a Swedish technology company, known as CMA. I must point out that the Jonathan administration was sceptical of SystemSpecs and was bent on awarding the contract to CMA. It soon dawned on the administration that the CMA was not ready.  NIBSS, which is owned by the CBN, was its next choice. It did not take long before it became clear to the administration that SystemSpecs should be saddled with the responsibility.

    As with all new things, there have been a number of controversies around the TSA and SystemSpecs. A senator accused SystemSpecs of making billions of naira daily from its operation of the policy. Last year, the Federal Government announced its decision to renounce payment to SystemSpecs for driving the TSA. SystemSpecs was the subject of attacks. For me, if the Federal Government sees the needs to renegotiate with Systems Specs, all well and good. That is in line with due process. An indigenous company that has driven a process applauded home and abroad deserves fairness. It should not be given undue advantage, but it should not be treated unfairly for pecuniary reasons, such as refusal to grease the palms of corrupt government officials or lawbreakers masquerading as lawmakers.

    Clearly, the TSA deserves to be transformed into a national project. It should be institutionalised and taken beyond the office of the Accountant General of the Federation and the TSA Director. I think the nation will benefit from this given the fact that this is almost like the only policy of this administration with global applause, which has attracted The Gambia, with the Kenyans and Ethiopians said to be on the way to understudy it.

    My final take: The Federal Government should ensure that all MDAs and government ventures comply with the TSA for the growth and development of the country. Anything short of this is a disservice to this amazing policy, which has helped check graft in inestimable ways.

    What will I turn to next week? Our love for all things foreign and how through this we are all killing our economy will receive due attention. Until then, I pray that this dispensation will not be anything like the last one. We deserve better security, better electricity, better education sector, better labour relations, and better health sector and better everything! We must truly have a real Next Level, not just as a slogan.

  • TSA: Fed Govt records N30tr turnover in seven years

    SEVEN years after it was created, the Treasury Single Account (TSA) has yielded more than 30 trillion turnover for the Federal Government, the Accountant-General of the Federation (AGF), Idris Ahmed, said yesterday.

    He told reporters on the sideline of a study visit by Gambian delegates to Abuja, that the turnover was in terms of transactions.

    Ahmed, who was represented by the Director of Funds in the Office of the AGF, Mohammed K. Usman,  said: “From 2012 when we started the full implementation of the TSA, and if you are looking at the volume of transactions, I think you will be looking at something in the region of N30 trillion; that is in terms of transaction volume, not in terms of balances or anything. So, if we are looking at turnover, it should be over N30 trillion.”

    The TSA, he said, “is a fluid account and so, it will be difficult to state specifically how much is in the account at any point in time”.

    He said The Gambians have a lot to learn from Nigeria’s public finance management initiatives.

    Read also: TSA: Fed Govt considering options for foreign missions, says minister

    Speaking earlier on controversy over bringing foreign missions into the TSA, Finance Minister Mrs. Zainab Ahmed, said the government was considering another option of capturing all accruals by foreign missions to into a single account.

    Speaking at the event, Mrs. Ahmed admitted that bringing in revenue generated in different currencies by foreign missions has been one of the major challenges facing the full implementation of the TSA.

    To address the challenge, the finance minister said: “The government is looking at a different option to interface with TSA for foreign missions.”

    She told the visitors that with the introduction of TSA, balances in the account are regularly reconciled.

    She also urged The Gambians to take advantage of their two-week study stay to visit some states in the country that have implemented a different variant of the TSA from the Federal Government.

    The Permanent Secretary in The Gambian Ministry of Finance & National Planning, Madam Ada Gaye, said they were in the country to learn from how Nigeria has managed its TSA as part of the public finance reforms taking place in her country, especially the monitoring of funds.

    Also speaking, the Accountant General of The Gambia Mr. Momodou Lamin Bah, said they were in Nigeria to understudy TSA management, having being told by the International Monetary Fund (IMF) that Nigeria’s TSA was a reference point for other African countries to rely on to develop their own TSA.

    The Gambian delegation, he said, was funded to attend the study by the European Union (EU) which also acknowledges Nigeria’s impressive handling of the revenue collection model.

  • TSA: Fed Govt considering options for foreign missions, says minister

    As controversy dogs the inclusion of foreign missions into the Treasury Single Account (TSA),

    The Federal Government is considering another option of capturing all accruals by foreign missions to into a single account, Finance Minister Mrs Zainab Ahmed has said.

    This is douse the controversy trailing the inclusion of foreign missions into the Treasury Single Account (TSA).

    Mrs Ahmed spoke yesterday in Abuja, the nation’s capital, when she hosted a delegation from The Gambia to understudy the success of Nigeria’s TSA.

    The minister regretted that one of the challenges facing the full implementation of the TSA was how to bring in the revenue generated by foreign missions, usually in different currencies. STo address the challenge, she said the government “is looking at a different option to interface with TSA for foreign missions”.

    Read also: FG records N30tr turnover on TSA in 7 years

    Mrs Ahmed told the Gambian delegation that with the introduction of TSA, balances in the account were regularly reconciled. The minister urged The Gambians to take advantage of their two-week study in Nigeria to visit some states that have implemented different variations of the TSA.

    Also, the Accountant General of the Federation (AGF), who was represented by the Director of Funds, Mr. Mohammed K. Usman, said The Gambians had a lot to learn from Nigeria’s public finance management initiatives.

    The Permanent Secretary in the Ministry of Finance and National Planning of The Gambia, Madam Ada Gaye, said the delegation was in Nigeria to learn how the country managed its TSA. She said the study was part of the public finance reforms taking place in The Gambia, especially to monitor public funds.

  • Govt counts TSA gains despite boycott by MDAs

    Under the Treasury Single Account (TSA), Ministries, Departments and Agencies (MDAs) are to deposit their accruable funds in a single bank account with the Central Bank of Nigeria (CBN). Four years after its implementation began, it has changed the face of public finance management, writes COLLINS NWEZE.

    The handling of the government’s receipts and payments is complex in many developing countries.

    In such countries, the ministries of finance/treasury lack a unified view and centralised control over the government’s cash and resources.

    This meant that the cash that could have been re-injected into system lie idle for months in numerous accounts kept with Deposit Money Banks (DMBs).

    Worst still, the revenue-generating Ministries, Departments and Agencies (MDAs) of government constantly borrow from banks (same funds they saved in the lenders) at exorbitant interest rates to fund government budgets.

    That was the case with Nigeria until September 2015 when the Federal Government began the full implementation of the Treasury Single Account (TSA) policy driven by the Remita, payment software developed and deployed by SystemSpecs to drive the scheme.

    Launched in 2006, Remita is an electronic platform that helps the government, corporate organisations, Small and Medium Enterprises (SMEs) and individuals to make and receive payments without stress. It aggregates multiple bank accounts, giving customers the ability to perform complete e-Transactions.

    The impact of the TSA in public finance management in the last four years depends on who is telling the story.

    For the Federal Government of Nigeria which records about N24.7 billion monthly from the TSA proceeds, the policy is a masterstroke against corruption and misapplication of public funds.

    But for commercial banks, which hitherto relied on funds from MDAs to post huge profits, and turning round to loan same funds to the government at high-interest rates, the policy has been a drainpipe on their revenue.

    In all, the TSA is seen as one of the most significant initiatives undertaken by any government in Nigeria to promote accountability, transparency and fight corruption in the management of public funds.

    It has given government greater control over its finances, tracking its inflow and outflow in an unprecedented manner.

    Analysts explained that apart from lowering the level of corruption, TSA exposes the emerging potential of Nigeria’s financial technology industry. As global competition rises and technology advances, the need to leverage IT for co-creation of value is a major factor for development.

    But the turnaround for TSA implementation was only achieved after SystemSpecs deployed Remita, a local technology software, to drive the project.

    Despite the huge progress made since TSA, grey areas still exist in its implementation. The partial compliance or outright boycott of the policy by certain MDAs such as the Nigerian National Petroleum Company (NNPC) and the Nigerian Immigration Service (NIS) and some Government Owned Enterprises (GOEs) cast aspersions on the commitment of the government to abating corruption in Nigeria.

    Surprisingly, these MDAs renowned for being cesspits of corrupt practices are the institutions actively subverting the policy, which raises the question as to why they are not fully compliant to the policy.

    Furthermore, the House of Representatives Ad-Hoc Committee chaired by Hon. Danburam Nuhu concluded its investigations into the running of the TSA but has failed to make public its findings from the enquiries. This act is in contravention of the 2011 Nigeria Freedom of Information Act which mandates free access to public information and records by the government.

     

    CBN steps in on transaction charge

     

    Of equal importance is the issue of transaction charge since the commencement of the current pricing regime, which has transferred the transaction cost of TSA from the government to the payer, in November 2018. According to a circular released by the Central Bank of Nigeria (CBN) to operators of the policy, non-card payers are required to pay a service fee of N150 plus Value Added Tax (VAT) per transaction with the government.

    This rate of N157.50 applies to every transaction irrespective of the amount being paid. On the other hand, card payers are required to pay a flat fee of N150 plus 0.75 per cent of the amount being paid, subject to a maximum of N1,200 per transaction.

    Financial pundits insist that SystemSpecs, the company powering the policy through Remita, deserves more recognition by the government and payment for service rendered over the years.

    “Without a doubt, the government must acknowledge the nationalism of the company in ensuring successful operation of the policy regardless of the initial issues it encountered at the National Assembly, and most importantly, when foreign companies and software failed,” they said.

    The TSA has been able to consolidate all inflows from government agencies using a single account-Consolidated Revenue Account (CRA) at the CBN. The effectiveness of the TSA since its introduction four years ago has proven that a level of sanity can be achieved in the use of public funds.

    Analysts believe that the TSA has helped the Buhari administration’s anti-corruption fight by flushing out ghost workers and saving the economy from imminent collapse.

    “Remita processes over $30 billion worth of transactions every year, and that’s just within Nigeria,” SystemSpecs’ Executive Director Deremi Atanda said at the yearly Gulf International Technology Exhibition (GITEX) in Dubai, United Arab Emirate (UAE).

    He continued: “There’s also a roadmap to take Remita to Africa. So, if you have the vision to be part of revolutionising payments in Africa at whatever level, driving financial inclusion at the national level, savings, micro-savings and micro-transactions, Remita is best placed to help you achieve that.”

    The Economist says: “TSA may be the biggest coup of all. It replaced a labyrinth of government piggy banks, giving Nigeria more control of its earnings.”

     

    The TSA in brief

     

    The TSA is a bank account or a set of linked bank accounts through which the government transacts all its receipts and payments and gets a consolidated view of its financial status at any given time.

    The TSA policy – initiated by former President Goodluck Jonathan administration but implemented by his successor, the Buhari’s administration – stipulates that all government taxes, levies and tariffs should be deposited with the CBN.

    The funds would subsequently be disbursed to MDAs based on approved rules to ensure accountability in the management of government resources. Several attempts to adopt the TSA in the past were unsuccessful.

    Reason: the CBN lacked the technological know-how to manage the retail aspect of the policy. An e-technology platform, Real-time gross settlement systems (RTGS), initially expected to drive the payment leg of TSA policy was unsuitable for retail payments.

    Prior to this development, every organisation that collects money for the Federal Government stacked cash in Deposit Money Banks (DMBs) where it is left to yield interest over the years for faceless individuals and groups while the government was starved of the funds meant for developmental projects.

    However, one major development that has contributed immensely to the robustness and efficiency of TSA is its integration with financial technology (FinTech). FinTech is an economic industry composed of companies that are trying to provide new financial solutions, which was previously the prerogative of banks. These companies are active in various domains, but they have one common attribute, which is: building and implementing technology, which is used to make financial markets and systems more efficient.

    Besides, payers are able to easily generate invoices for transactions online and make payment to the government through various channels including branches of all commercial banks, select Microfinance banks, Internet banking portals, Point of Sale terminal, cards on Web, Mobile Wallets, and collection agents.

    A payer can easily go to the website of any MDA to identify the item to be paid for and generate an electronic invoice or visit the concerned MDA to obtain an invoice which clearly indicates the amount to be paid for the relevant item/ service.

    TSA payment is evidenced by an automatically generated electronic receipt provided to the payer at the point of the transaction by the bank or sent to the payer’s registered email address.

     

    TSA boosts FinTech sector

     

    According to technology reports, financial technology is one of the fastest-growing industries in the world. It has grown into a N22.3 billion industry with a 75 per cent growth rate recorded in 2015. Global investment in FinTech ventures in the first quarter of last year reached $5.3 billion, a 67 per cent increase over the same period in 2015, and the percentage of investments going to FinTech firms in Europe and Asia-Pacific nearly doubled to 62 per cent, as reported by Accenture.

    In a more recent development, The Bank of England has opened up the UK’s payments systems – the “plumbing”, which facilitates same day money transfers between banks – to organisations that are not banks, giving FinTech startups another step up in their challenge to traditional banks. It’s the latest move by the UK’s financial authorities to foster technology innovation and “level the playing field” between the established institutions and newer ones. Nigeria can hopefully take a cue from this.

    The TSA journey has been a remarkable one. However, huge bottlenecks created by self-serving interests still militate against the full implementation of the policy. Despite its huge gains, the government is not treating the policy as a prized national asset that is helping to drive accountability and stock-taking. There are still some pockets of revenue leakages and financial impropriety all around. TSA is not primed to handle forex for now and this is a major excuse for universities requesting for exemption since their grants are mainly in foreign currencies.

    SystemSpecs’s Chief Executive Officer, John Obaro, said the deployment of Remita has reduced the government’s debt servicing costs, lowered liquidity reserve needs and boosted effective use of surplus cash.

    Obaro said his firm would continue to deliver on the TSA service terms of contract with the CBN despite being owed its earned fees on e-collections. He disclosed that some bank branches have started to turn down the collection of government deposits due to the non-payment of these agreed fees.

    Obaro said: “From our end, we have continued to provide and support the Remita platform, 24 hours a day and seven days a week, for use by citizens for all their payments to the Federal Government. Our continued support for the TSA is fueled by our belief in the enormous benefits the Remita software brings to the implementation of TSA to the average citizen.

    “We must admit though that we are excited and further driven by the fact that our indigenous Remita software has succeeded in powering the technological backbone for such a successful and strategic national initiative, along with other well-meaning Nigerians, we do not want this to fail.”

    Presenting a paper at a workshop organised in Abuja by the Office of the Accountant-General of the Federation and the World Bank, Prof. Stephen Ocheni said achieving an efficient allocation of resources and the stabilisation of the business cycle remained great challenges facing most parts of the world, particularly developing countries, such as Nigeria.

    In the paper titled: “Treasury Single Account: A catalyst for public financial management in Nigeria”, Ocheni of Public Sector Accounting, Kogi State University, Anyigba, said: “An important factor for efficient management and control of government’s cash resources is a unified structure of government banking.

    “Such unified banking arrangements should be designed to minimise the cost of government borrowing and maximise the opportunity cost of cash resources. This requires that cash received is made available for carrying out government’s expenditure programmes and making payments in a timely manner.”

    The Buhari administration has initiated and implemented the TSA and other economic policies for better management of national resources and the fight against corruption.  Besides the TSA, the government also introduced the Government Integrated Financial Management Information System (GIFMIS), Automated Accounting Transaction Recording and Reporting System (ATRRS), Integrated Payroll and Personnel Information System (IPPIS), International Public Sector Accounting Standard (IPSAS), among others to promote public financial management systems.

    The government began TSA implementation with the e-Payment component in April 2012 and its e-collections components followed in January, last year. On September 15, 2015, the government set a deadline for full compliance with the policy by all MDAs.

    According to Ocheni, the policy facilitates better fiscal and monetary policy coordination as well as better reconciliation of fiscal and banking data, which in turn improves the quality of fiscal information. The TSA also cuts the debt servicing costs and eradicates financial misappropriation in the public sector.

     

    TSA gains reverberate

     

    With TSA, Deposit Money Banks (DMBs) have also been constrained to diversify their sources of deposit mobilisation rather than rely on these idle funds which yielded interest for faceless individuals and groups, even as the government groaned under paucity of funds.

    Analysts believe that the TSA has helped Buhari administration’s anti-corruption fight by flushing out ghost workers and saving the economy from imminent collapse.

    Vice President Yemi Osinbajo once corroborated Atanda’s assertion from the cost-saving perspective. He disclosed that 40,000 ghost workers had been flushed out of the public service, due to the adoption of the TSA which is powered by Remita. The translates to a monthly saving of N720 million and N8.64 billion yearly at the prevailing N18,000 minimum wage.

    Remita has instilled the fiscal discipline that allows the government to have control over budget allocations while providing multiple entry points for collections.

    The implementation of the TSA policy has significantly reduced the government’s debt servicing costs, lowered liquidity reserve needs, and fostered effective use of surplus cash.

    Going forward, SystemSpecs is poised to tap into McKinsey’s projection that payments and financial services delivered via mobile phones and the Internet could transform individuals’ lives and economic prospects businesses and governments across the world.

     

    TSA’s impact on banks

     

    The CBN agreed that the policy regime triggered some unintended consequences, affecting the operations of banks, especially regarding deposit depletion, asset quality, a decrease in revenues and liquidity stress.

    The loss impacted banks differently in line with the proportion of their balance sheet that was sustained with the Federal Government of Nigeria (FGN) deposits.

    “Due to its large size and low cost, Federal Government of Nigeria deposits were a huge source of revenue for banks. Although specific data on revenue attributable to FGN deposits are not available, a good proxy is a yield on Treasury Bills, which is currently around 12 per cent.”

    The CBN said the TSA regime impacted the liquidity level in the banking system due to the attendant remittance of cash, which constitutes a major portion of banks’ liquid assets to the apex bank.

    “Furthermore, as part of risk management, banks with large government deposits mitigated their positions by investing the liability in T-bills and FGN bonds. These banks had to liquidate these investments in order to comply with the TSA regime, thereby further reducing their stock of liquid assets,” it said.