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TSA: FG not fair to SystemSpecs says ISPON

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This morning, President Muhammad Buhari in his Democracy Day speech boasted how Treasury Single Account (TSA) has saved the country billions of Naria. It means that the platform- Remita is doing a great job for the country.

Well, since the introduction of TSA in September 2015, the Federal Government has saved over N128bn from charges imposed by banks for managing funds belonging to the Ministries, Departments and Agencies of the government.

But news filtering in shows that developers of the software, SystemSpecs, on which TSA runs, are not been treated fairly, even as the government is accused of not keeping to terms of agreement.

Vice President Osibanjo speaks hallowing of TSA

The Vice-President Yemi Osinbajo, while speaking at a recent Chartered Institute of Taxation of Nigeria (CITN) event, expressed delight over the contributions of TSA to the economy.

Findings at the Office of the Accountant-General of the Federation showed that before the scheme commenced, the government incurred about N4bn monthly to maintain its various accounts in banks.

The amount represents the various charges and account maintenance fees, which were hitherto imposed by the Deposit Money Banks for holding government funds.

Listen to the Vice President speak on the subject: “We have aggressively expanded the implementation of the Treasury Single Account and the Integrated Personnel Payroll Information System, both designed to ensure that public funds are more transparently managed and spent.

“The TSA’s unified system of bank accounts domiciled in the Central Bank of Nigeria has proven to be far more transparent and cost-effective than the old scenario in which government agencies maintained thousands of accounts across various commercial banks.

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“Because of the TSA, the Federal Government realises monthly savings of at least N4bn, which would have gone on commercial bank charges.”

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There are 32 months between September 2015 and April this year. And with monthly savings of N4bn, the total amount so far saved through the implementation of the scheme is N128bn.

Unfortunately, SystemSpecs, the company that developed Remita which powersf funds collection into TSA, has not received its ‘loyalty’ from the Federal Government for over two years now, TechEconomy.ng investigations have shown. This is despite the fact that SystemSpecs pays mandated transaction fees to other stakeholders like card payment processors, whose charges are instant. For such transactions, government still receives its money in full because SystemSpecs tops up before sending into government coffers.

Senate probe

Recall that in 2015 the Senate had ordered its joint Committee on Finance, Banking and Other Financial Institutions and Public Accounts to probe the allegation that the e-collection agent, Remita, had been paid 25 billion, being the one per cent commission it charged for the transfer of N2.5 trillion of Federal Government funds to the TSA.

Though Remita is the electronic payment platform adopted for the TSA, banks, and other payment platforms are all part of the transaction value chain.

These include banks, debit or credit card processors, POS terminal providers, mobile wallet platform owners, switching platform owners, and payment gateway technology providers.

While there is indeed one per cent transaction fee charged on all inflows and outflows through the TSA, the money is shared among the payment electronic platforms, banks, CBN and SystemSpecs.

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Transaction fees is a common feature of electronic payment transactions. An example is the N65 fee charged by banks when customers of other banks use their ATM.

Also, there is N54 transaction fee charged on all money transfers transactions in the banking industry including payment of bills such as DSTV subscriptions, flight tickets etc.

What was agreed

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The one percent transaction fee charged for TSA transaction was based on agreement between the CBN, payment platforms and the Federal Government.  This is reflected in a CBN circular to all banks dated December 17th, 2013, which stated, “A fee of 1% of funds collected is payable. This includes solution provider and participating bank fees”.

Further investigations also reveal that the fee sharing arrangement under the TSA states, “For E-payment: A tariff of N100 per million naira transaction, with 40 percent to CBN, and 60 percent to SystemSpecs.” “For Collections: A tariff of 1% of funds collected shall be charged for the government revenue collections, to be shared as follows: Platform Owner/SystemSpecs-50 percent; Collecting Agents/ Participating banks-40 percent; CBN-10 percent.

1% fee still lowest in industry

TechEconomy.ng inquiries show that the 1% TSA transaction fee is one of the lowest in the industry.

Also, when compared with the pre-TSA regime where government was earning 0% interest on its funds outside the CBN and paying about 15% on government borrowings in terms of bonds, the 1% TSA fee is a better bargain for the Federal Government.

SystemSpecs has not been given enough accolades

Meanwhile, TechEconomy.ng gathered over the weekend that there are plans to arm-twist SystemSpecs to accept certain percentage far lesser than the agreement it signed with the Federal Government through the Central Bank of Nigeria (CBN).

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The immediate Past President of the Institute of Software Practitioners of Nigeria (ISPON), Mr. James Emadoye, cautioned against such moves, adding that indigenous software practitioners have not received enough support from the government.

Emadoye said, “Government should be at the lead, and not only should they support the ICT industry, they should also intentionally support made-in-Nigeria software and discourage acts that undermine the growth and advancement of the sector.

“A member of ISPON, SystemSpecs, which is doing so well for Nigeria through TSA is not being celebrated or recognised. We heard they have not been paid.

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“They are being squeezed out rather than being entrenched. In other climes, government would promote the Remita solution and position it as a net export and foreign currency earner”.

Efforts to reach officials of the CBN and the Company could not yield report as at press time.

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