TSA at one: Where do we go from here?

When the gains of the President Muhammadu Buhari administration are counted, the implementation of the Treasury Single Account (TSA) policy will make the list. Before the policy, Ministries, Departments and Agencies (MDAs) operated thousands of questionable and poorly monitored bank accounts. This bred systemic corruption, compromised revenue remittances and deposit dormancy.

But the implementation of the policy was not a walk in the park. The government’s initial attempts to adopt TSA were unsuccessful, as the CBN lacked the technological capacity to manage the retail aspect of the policy. RTGS, a Swedish eTechnology platform, was expected to drive the payment leg of the project, but was found unsuitable for retail payments. That was when SystemSpecs came into the picture. Through the company’s flagship software Remita, which powers the TSA, the government has been able to recover over N3 trillion of its cash assets lying dormant in Deposit Money Banks (DMBs) and 40,000 ghost workers have been flushed out of the public sector, as disclosed by Vice President Yemi Osibajo yesterday.

Remita is an electronic platform that helps the government, corporate organisations, SMEs and individuals make and receive payments easily. It aggregates multiple bank accounts, giving customers the ability to perform the complete suite of eTransactions. Major billers also find Remita a useful tool, since it offers multiple payment options, generates instant receipts and transaction reports.

‘Remita has been around for 10 years, with a view to revolutionising payment in Nigeria,” said SystemSpecs Executive Director Deremi Atanda, on CNBC Africa’s mid-belt programme Power Lunch recently. “Somewhere along the line, the country wanted to implement a fiscal policy which required the support of payment technology. We got onto the scene and proved we could deliver. That actually marked the start of our involvement with a significant national initiative.”

John Obaro left a fulfilling career in the banking industry to start SystemSpecs in 1992. Ever since, he has been a crusader for more government investment in Nigeria’s Information and Communication Technology (ICT) industry. He argues that most developing nations are focusing their attention on ICT in reaction to fluctuating oil prices on the international market and Nigeria should follow suit. As of last year, ICT contributed over 11% to Nigeria’s Gross Domestic Product (GDP). He believes this percentage can be scaled up, making Nigeria overtake South Africa as the continent’s largest ICT market.

“We will continue to extend the frontiers of e-Payment, financial and human capital software solutions,” Obaro assures.

SystemSpecs’ pioneering efforts have not gone unnoticed by top players in the ICT industry. At the Tech Titan awards held in Lagos last month, the company beat notable competitors in the industry to emerge the ‘Pan African Software Company of the Year.’ Its software Remita also received accolades as the ‘Most Revolutionary eGovernment Product of the Year’, while Obaro made the list of Nigeria’s Top 50 Tech Titans at the industry night.

By September 15, the TSA will be one year old. A crop of analysts say the policy has achieved much, even though Nigerians have received it with mixed feelings. They explain that the TSA has returned a measure of probity and accountability to Nigeria’s financial system, forcing commercial banks to diversify their sources of deposit mobilisation and minimise their overdependence on MDA deposits which yielded them huge interest while the Federal Government was left virtually cash-strapped over the years. Last Tuesday, Deposit Insurance Corporation (NDIC) helmsman Umaru Ibrahim said the TSA has signalled the end of armchair banking. He stressed that over three years ago, banks had been warned to diversify their income sources so as to solidify their capital base.

Despite these gains, the TSA policy is in danger of failing. Atanda says government has not paid SystemSpecs its 1% service charge for using its software to implement the policy. By agreement, the service charge is to be shared in the ratio of 50%, 40% and 10% by SystemSpecs, DMBs and the CBN respectively.

“We have taken this challenge upon ourselves for the sake of other IT entrepreneurs. It’s not been easy going ahead without being paid for months. But we know that once this is sorted out, it charts the path for others coming into the market,” he says.

Economic watchers observe that if this state of affairs lingers, the TSA may not stand the test of time and the gains recorded in the last few months would go to waste. Systemic corruption will return to the public sector and government will have a much harder time keeping tabs on its income and expenditure. Worse still, developmental projects that will be of benefit to the groaning citizenry will virtually be at a standstill.

Thompson is a public affairs analyst