Earlier this year, on February 15 2015, marked the beginning of the full implementation of the Treasury Single Account system in Nigeria as directed by former President Goodluck Jonathan, the Central Bank of Nigeria (CBN) issued a circular directing all deposit money banks to implement the Remita E-collection platform, an electronic platform deployed by the Federal Government (FG) to support the collection and remittance of all government revenue to a consolidated Account domiciled with the CBN.
Successive governments in the past had continued to operate multiple accounts for the collection and spending of government revenue in flagrant disregard to the provision of the constitution which requires that all government revenues be remitted into a single account.
While implementing the directive of President Muhammadu Buhari on the full implementation of the TSA Contract which was signed by the former President Dr. Goodluck Jonathan, some unforeseen issues cropped up; issues with the condition of payment to the software company managing the transfer and recall that the Accountant General of the Federation (AGF) Mr. Ahmed Idris acceded to the requests of 13 federal agencies for exemption.
These agencies include; the Bank of Industry (BoI), Power Holding Company of Nigeria (PHCN), Bank of Agriculture (BoA), Transcorp Hilton Hotel, Niger Delta Power Holding Company (NDPHC), Urban Development Bank (UDB), Nigerian Import-Export Bank (Nexim), Ajaokuta Steel Company, Federal Mortgage Bank of Nigeria (FMBN), Nigerian Railways Corporation, the Nigerian National Petroleum Corporation (NNPC), National Integrated Power Project (NIPP) and Galaxy Backbone. But the CBN Governor, Godwin Amiefele vehemently refused to acknowledge the exemptions.
The Group Chief Accountant of Five Star Logistics Limited, Mr. Bashiru Adesina stated, “As an accountant, I think that it is wrong for any agency to be exempted from remitting to the TSA. If it is good for the goose it should be good for the gander, if the Federal Government says that is what they want, the agencies have to comply because in the past the freedom to run individual accounts have been abused and for the abuse to be removed the TSA will ensure proper internal control, checks and monitoring.
Adesina added, “lately we cannot pay into the Nigeria Social Insurance Trust Fund (NSITF) accounts because they claim that the account has been blocked, also not all the agencies have reconciled their account with CBN but I believe when all the agencies are all sorted out it will be for the good of the nation.”
Furthermore, an accountant with one of the top Nigerian commercial banks Mrs. Elizabeth Awolokun said, “government monies no longer stay in commercial banks, it goes straight to the CBN once it is paid and this has affected our ability to give out loans, lending rate is on the low now and interest rate is higher than before.”
Similarly, the Public Affairs Manager of the Nigerian Ports Authority, Capt. Iheanacho Ebubeogu affirmed, “From the 15th of September about two months ago, we started remitting to the TSA, so NPA is not one of the maritime agencies asking to be exempted, the FG knows how to take care of any agency that fails to comply.”
Reacting to the speculations on the effect of the TSA on the Authority, he said “It is not true that the NPA has been in financial crisis since the implementation of the TSA. It is a new thing which requires security measures and as such NPA is experiencing the transition ripples but we know it will be fine in the end. We are improving with the TSA, things will stabilize very soon, the TSA is a new but promising platform with a few rough edges, it is still a new initiative and NPA has not been crippled by it rather we are improving with regards to accountability which we believe will become good in the end.”
The purpose of TSA is primarily to ensure accountability of government revenue, enhance transparency and avoid misapplication of public funds. In 2012 government ran a pilot scheme for a single account using 217 ministries and agencies as a test case, the pilot scheme saved the country about N500billion in frivolous spending.
All ministries and agencies of government are now expected to remit their revenue collection, receipts and income to the TSA account through individual banks who acts as collection agents. This means that the money deposit banks will continue to maintain revenue collection accounts for MDAs but all monies collected by these banks will have to be remitted to the consolidated revenue accounts with the CBN at the end of each banking day.
The e-Payment and e-Collection Remita software implementation of the modular solution was approved by the former CBN Governor who is currently the Emir of Kano, Alhaji Muhammad Sanusi II, and former CBN Deputy Governor, Operations, Mr. Tunde Lemo, in 2011 to facilitate the transfer of government revenue to the TSA.
Recently, the Senate had to initiate a probed when it was uncovered that the e-Collection agent, Remita, had been paid 25 billion, being the 1 per cent commission it charged for the transfer of N2.5 trillion of federal government funds to the TSA.
Remita, which was adopted by the CBN as the e-Payment and e-Collection platform of the Federal Government, is currently used by all 22 commercial banks and over 400 microfinance banks nationwide and contrary to the assertion of the Senate that N25 billion had been paid to SystemSpecs, the owners of the software, it was N8.6 billion that was deducted by the company for the transfer of N1.5 trillion since the enforcement of the TSA by the current administration in the last few weeks.
When the issue was brought to the attention of the President, he asked that the money be returned immediately. Going forward, it is pertinent to review the contract on the software, because the CBN has its own software for e-Payments and e-Collections, consequently it will be illegal and defeating the purpose for the TSA if huge sums of money have to be paid to an independent company.
Nigerians are excited at the directive by the president as this will mean that some government agencies that have been known to be withholding funds from the FG are now under compulsion to remit monies to the federal treasuries. These agencies include; Nigeria Customs Service (NCS), Nigerian National Petroleum Corporation (NNPC), Nigerian Ports Authority (NPA) Federal Inland Revenue Service (FIRS), Nigeria Immigration Service (NIM), Nigerian Maritime Administration and Safety Agency (NIMASA), Federal Airport Authority of Nigeria (FAAN), among others.
Earlier this year on the take off of TSA, many agencies of government, especially those whose briefs are not solely that of generation of revenue but provide services to the public, noted that it would be unfair and illogical to subject them to the bureaucracy of TSA. Their argument was that they render services with their funds, and so the waiting time to apply for and get funds from the consolidated account could make them to breach their statutory obligation to their industry. What was very noticeable and most feared was the delay in their salaries because of TSA. One of those agencies is NPA, followed by Nigerian Railway Corporation (NRC).
However, they only complained in hush tones, fasting and praying for exemption. The general fear, however is that the nation’s funds is consolidated in one basket for easy management of resources, today, can PMB guarantee the safety of this basket after his leadership?
CBN officials and the managers of this basket are the defacto “minister” of finance, who determines when this fund is accessed by each of the government contributory agencies.
This is another national corruption grid created, the people have said. However, it is believed that problems must be associated with new ideas but how they are handled for the future is another thing.