CBN tells HoR Remita got e-collection on merit

• Justifies Remita’s role in improving payment efficiency for MDAs

The Central Bank of Nigeria (CBN) has clarified its decision to select Remita, a leading Nigerian fintech company,  as the platform for electronic payments from Ministries, Departments, and Agencies (MDAs), to beneficiary accounts across commercial banks, noting that it was based on merit, following queries regarding issues with leakages on the REMITA platform.

Hamisu Abdullahi, the director of banking services at the CBN, who maintained that the selection process was based on Remita’s proven track record of delivering innovative and reliable payment solutions,  highlighted the significant advantages that Remita offers over other electronic payment platforms, including its proven track record, reliability, and cost-effectiveness. 

Abdullahi defended the CBN’s action when officials of the apex bank appeared before the House of Representatives Public Accounts committee  to respond to queries about Remita’s operation of the Treasury Single Account (TSA) platform.

The hearing was presided over by Bamidele Salaam, chairman of the house committee on public accounts, who said the investigation is not a witch-hunt targeting any company but rather a crucial step towards transparency and ensuring accountability for the federation’s revenue.”

Abdullahi, in the CBN’s defence, said:  “The CBN was directed to provide an electronic platform that would facilitate payments on behalf of MDAs to beneficiaries accounts in the commercial banks.”

“CBN deemed it fit to source for an alternative way of doing this and engaged two companies and out of the two, Remita, was selected based on merit and based on the fact they had been rendering similar services to commercial banks.”

In a previous report, Salawu Zubairu, the then-director of the Office of the Accountant General of the Federation (OAGF), had explained that Remita was selected as the platform for the Treasury Single Account (TSA) after a rigorous evaluation process that included other candidates such as the Nigerian Inter-Bank Settlement System (NIBSS).

Zubairu stated that the committee’s decision to select Remita was based on the company’s superior capabilities in handling the electronic payments and collection of government receipts for the TSA, as well as its ability to meet all the stringent requirements set forth by the Office of the OAGF, the CBN, and their external consultants.

In addition to the CBN’s statement, Deremi Atanda, the managing director of Remita Payment Services Limited, also provided testimony concerning the queries.  Atanda highlighted the shortcomings of the previous system, where each government agency received funds independently and decided on its own when and how much to remit as operating surplus.He explained that the TSA has streamlined the process by centralising the collection and disbursement of funds, increasing transparency and accountability.

Atanda further explained that the goal of the TSA initiative is to create a single system that can track all of the government’s inflows and outflows in real-time. He stated that this transparency and accountability is critical for effective management of the government’s cash assets.

Dasuki Arabi, the director-general of the Bureau of Public Service Reforms, previously reported that the TSA has played a key role in uncovering and removing approximately 70,000 ghost workers from the civil service payroll. It was also reported that the government has realised savings of at least N220 billion through the Integrated Payroll and Personnel Information System (IPPIS).

Atanda provided further details on how the government can track and account for each transaction through the use of a unique Remita Retrieval Reference (RRR) code. This system provides a high level of transparency and accountability by assigning a unique identifier to each revenue inflow, allowing for easy tracking and monitoring of all payments. 

“It allows the government to identify the receiving MDA, the destination account, the date and time of the transaction, the purpose of the payment, and the name of the payer. The RRR has become the ultimate reconciliation reference point for all payers, banks, and MDAs involved in government revenue collection,” the Remita MD stated.

Atanda observed that while the TSA has made great strides in consolidating government revenues, there are still some forex revenues that are not being channeled through the TSA framework. He stressed the importance of ensuring that all government inflows and outflows, regardless of currency, are captured by the TSA. This, he stated, is essential to prevent any potential financial leakages, and to ensure that all revenues are accounted for and transparently managed

With the Nigerian government facing a shortage of foreign exchange and mounting pressure on the Naira, Deremi Atanda highlighted the importance of adhering to the original design of the TSA, which was to capture all government inflows and outflows, including those in foreign currency. He warned that any diversions or loopholes in the system would have negative consequences for the government’s efforts to generate foreign exchange and prevent further devaluation of the Naira.