CBN, SystemSpec and TSA

The Senate recently resolved that the Central Bank of Nigeria (CBN) should immediately terminate a contract which the later awarded to a private firm, SystemSpec Limited, for the use of the firm’s online payment platform Remita, to manage the Treasury Single Account (TSA) regime. One concern of the Senate is in respect of the implied […]

The Senate recently resolved that the Central Bank of Nigeria (CBN) should immediately terminate a contract which the later awarded to a private firm, SystemSpec Limited, for the use of the firm’s online payment platform Remita, to manage the Treasury Single Account (TSA) regime. One concern of the Senate is in respect of the implied abdication by CBN of its statutory function of collecting all federation monies including such under the TSA, when it conceded same to the private firm through the contract. The second, equally serious one is the N25 billion that SystemSpec stood to make for the use of its Remita platform.
In a motion sponsored by Senator Dino Melaye and 31 others, the Senate queried the circumstances under which the apex bank awarded a contract to a private firm to carry out the former’s statutory function especially at an avoidable cost to the country. The motion mandated the Senate Committees on Finance, Banking and other Financial Institutions as well as Public Accounts to carry out a holistic investigation of the situation and report back in two weeks. The motion also called for the prosecution of the company’s directors.
According to the terms of the contract, SystemSpecs Limited would collect 1% of the value of all transactions that pass through its Remita online payment platform. Incidentally 1% remains the standard charge by SystemSpec Limited for all regular financial services delivered through that platform. Hence by using it the CBN remains obligated to pay the regular charge of 1% for services rendered.
Meanwhile the TSA is a program recently adopted by the Federal Government for the purpose of marshalling and streamlining the monetary operations of the public sector under a unified control. It was designed and recommended by the World Bank for use by countries that have the challenge of fragmented fiscal systems. Under the TSA regime all bank accounts operated by all MDAs are to be linked to a central platform under CBN’s management. In that context all revenues and disbursements by government in all MDAs are to be coordinated by the apex bank. It is for the purpose of managing such financial operations that the CBN contracted SystemSpecs Limited.
Yet the motion by the Senate is driven by at least two premises. Firstly is the questionable resort by the apex bank to the Remita option, out of other online payment platforms, in respect of managing the collection of revenue for the federation. Even if CBN needed to outsource aspects of its statutory functions to private sector enterprise, the surreptitious participation by SystemSpec Limited in the process raises questions over how compliant the entire enterprise is with due process as provided by law. Besides from the perspective of national security, is the apex bank by this development betraying its inability to develop a home grown and dedicated online platform for running its statutory functions?
In another vein it is outrageous  that SystemSpec Limited collected through its platform Remita the sum of N 2.5 trillion on behalf of the apex bank on September 16th 2015, and was due to retain N25 billion in one fell swoop as its fees.  Incidentally the huge public outcry and the response by the Senate have led to the recovery of the questionable fee of N25 billion from SystemSpec Limited.
Yet that should hardly lay the matter to rest, even as the call by the Senate for the prosecution of the directors of SystemSpec Limited may not be justified except when indisputable evidence linking them with criminality in the matter is established. This it is hoped will be addressed by the ongoing Senate investigation.
 In the light of the maxim of zero tolerance for corruption which the present administration has adopted, it remains a travesty for an agency as strategic as the CBN to allow any shadow of incongruity to trail its operations. That one company should walk away with N25 billion from a program that is meant to curb waste in public finances is to say the least, curious.