CBN confirms merit-based selection of Remita to provide electronic platform

The Director of Banking Services, Central Bank of Nigeria (CBN), Hamisu Abdullahi, highlighted the merit-based selection of Remita to provide an electronic platform essential for facilitating payments from Ministries, Departments, and Agencies (MDAs) to beneficiary accounts across commercial banks.

He said this when officials of the Central Bank of Nigeria appeared before the House of Representatives Public Accounts Committee today 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. Salaam had 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.”

According to Abdullahi “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.”

The Managing Director of Remita Payment Services Limited, Mr. ‘Deremi Atanda, also highlighted the previous system’s shortcomings, where government agencies independently received funds and arbitrarily decided the timing and amount of operating surplus to remit, a practice that has been streamlined by the TSA.

“There has been an evolution and it has been positive for the country on account of TSA. Some things that started manually have now become automated. What MDAs were doing was that they were receiving inflows and at their instance determine what is operating surplus when to they remit,” he said.

Mr Atanda said the TSA initiative is designed to create a single window through which all inflows and outflows of government can be monitored in real-time for transparency and accountability and especially for the effective management of the government’s cash assets.

It is pertinent to note that the Director-General of the Bureau of Public Service Reforms, Dr Dasuki Arabi, in the past reported that the TSA has been instrumental in uncovering and removing approximately 70,000 non-existent employees from the civil service payroll. The government has realized savings of at least N220 billion through the Integrated Payroll and Personnel Information System (IPPIS)

Mr Atanda further explained how the government can track and account for every single transaction through a unique Remita Retrieval Reference (RRR) code assigned to each revenue inflow.

“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 TSA was lauded by the last administration for being instrumental in Nigeria’s financial reform, enhancing governance and supporting the anti-corruption drive. The former Minister of Information and Culture praised the TSA for preventing fiscal crisis, stating that it “saved Nigeria from collapse.” Through effective resource management and transparency, the TSA has helped eliminate ghost workers and reduce financial discrepancies. Its preservation is vital for Nigeria’s continued economic progress and integrity.

As Nigeria continues its march towards economic stability, some government forex revenue collections still occur outside the TSA framework. Mr. Atanda highlighted the importance of adhering to the TSA’s original intent of consolidating all government inflows and outflows, regardless of currency. This is vital to prevent the diversion of the federal government’s foreign exchange revenues into the hands of unscrupulous entities.

“At a time when the Nigerian Government is seeking ways to generate Forex and prevent the devaluation of the Naira amid increased demand for the US Dollar, allowing such diversions is inadvisable,” he stated.