Central Bank of Nigeria (CBN) Governor Godwin Emefiele and Accountant General of the Federation (AGF) Ahmed Idris were locked in arguements over the controversial Treasury Single Account (TSA) with SystemSpecs Limited, owner of Remita, an electronic payment solution.
But SystemSpecs Chief Executive Officer (CEO) John Obaro insisted that his platform had a valid contract with the CBN and deserved to earn its charge as contained in the contract.
Emefiele, Idris and Obaro spoke at a public hearing on alleged abuse and mismanagement of the TSA regime.
The Senate instituted the public hearing following claims that the one per cent service charge being paid to Remita under the TSA was a rip-off.
Emefiele explained the spirit behind the TSA which process he said began in 2010.
Idris gave the amount collected under the TSA as N1.8 trillion but
The CBN Governor gave N2.038 trillion as the amount collected from the Ministries, Departments and Agencies (MDAs) as at December 8. But The AGF gave a figure of N1.8 trillion.
Emefiele said because of the large volume of fund collection under TSA, the payment of one per cent service charge to the service provider, Remita was considered to be too high and exorbitant.
Emefiele added that the TSA scheme is laudable adding that the Federal Government should be commended for ensuring its full implementation.
He noted that already the CBN has over N2 trillion, money that should have been lying idle in banks.
He said that there was no abuse of the TSA as being claimed in some quarters.
Chairman of the joint committee promptly reminded him that the TSA is not on trial especially when the Senate had commended President Muhammadu Buhari for its implementation.
On who approved the payment of one per cent service charge to Remita, the CBN governor said he needed to cross check but admitted that that there was an agreement between CBN and Remita.
He said he was told that Inter-Departmental Committee of the apex bank approved the payment.
He also told the committee that the Remita platform was designed to handle retail payment.
Emefiele said that when Remita was appointed as e- payment Solution platform, Nigeria Inter-Banks Settlement System (NIBSS) owned by the CBN was not quite ready to provide the services.
The CBN boss said that he is not aware that Remita is hosted outside the country adding that all he knows is that Remita is a Nigerian company and hosted in the country.
Emefiele reiterated that since 2012 when TSA was introduced over N2 trillion had been collected and the volume of collection would continue to increase.
He said that the agreement stipulated a sharing formula of CBN 10%, banks 40% and Remita 50% of the one per cent service charge.
Emefiele told the committee that at the reversal of the agreement Remita was asked to refund the N8 billion it collected.
The company, he said, promptly complied by refunding what it earned.
The Senate had claimed that Remita received N25 billion in three months.
The CBN governor said that he is sure that Remita has also realised that the payment of one per cent service charge on all funds collected is exorbitant.
On alleged upfront payment of the service charge, the CBN governor said he does not think the deduction was made up front from the collection.
He said, “Monies have been collected and the agreement says you take one per cent of what had been collected.”
Asked whether he was aware that one per cent was being taken from the funds collected for the Federal Government, Emefiele said:
“I did not know that one per cent was being taken on that account until we were summoned to the office of the Senate President and I was surprised to hear it. It was immediately that I swung into act to find out who John Obaro is. I called him immediately to refund the money he collected and to reverse the payment.
“Initially I did not know who owns Remita and SystemSpecs until my attention was drawn o it in the Senate President’s office. I have to admit that I did not know about the payment until it came up on the floor of the Senate. That was why I quickly called Mr. Obaro and immediately reversed the payment.”
Chairman of the committee Enoh praised the courage of the CBN boss for admitting that he did not know about the payment.
Enoh noted that it is solemn for people in office to admit their error.
The Accountant General told the Committee that the TSA is meant to focus on resources of government and to ensure that the resources are consolidated and viewed through single window.
He said that it is also meant to block leakages.
Idris gave the amount collected under the TSA as N1.8 trillion but the CBN Governor gave N2.038 trillion as the amount collected as at December 8, 2015.
Idris said that 47 MDAs had enrolled in the TSA scheme adding that it does not mean that that MDAs do not want to enroll.
He said that the appointment of Remita as e-payment solution platform was a stop-gap because the CBN lacked the capacity to do it when Remita was selected.
He said that they have been meeting on the way forward until the matter came up in the Senate.
On charges paid to Remita Idris said: “Whatever charges made by Remita which is about N8 billion, we wish that the matter should be resolved. Now Remita is operating without charge. The matter should be resolved. Remita cannot be operating without charge.
He told the committee that there was no MoU between the Office of the Accountant General and Remita.
He added: “What I do know is that when I came I was confronted with the agreement for the appointment of Remita and I refused to sign it because I was not part of the agreement.”
Idris said that he also refused to endorse the appointment because “I was opposed and disagreed with the level of payment and charges awarded to Remita. There was no agreement between the CBN and the AGF duly signed.”
He continued, “My office has not made any payment on the operation of the TSA. We have not engaged anybody and no payment. My office is not party to any payment.”
Idris said that the provision of gateway of collection of government funds is the responsibility of the CBN adding that if the CBN had provided that gate way there would not be any need to appoint Remita.
He agreed that if Remita provided the services it deserved to be paid.
In his presentation Obaro, said that the use of Remita started in 2012 with 116 Ministries Departments and Agencies.
He insisted that his company has valid contract agreement with the CBN and it should be honoured.
He said that the agreement for the fees was reached in 2013 by a committee comprising the CBN, OAGF, the commercial banks and SystemSpecs at a price of 2.5 per cent, which was reduced to one per cent later.
Obaro said the use of Remita software had increased transparency with provision of online real time account balances of all MDAs.
He said that even officers who approve payments were documented as well as those to whom such payments were made, insisting that the company had a valid contract with the CBN and the charges were as agreed to.
He however said that the OAGF in October, 2015, expressed worry at the percentage and he stressed that the company did not have any problem with a percentage renegotiation.
He expressed displeasure that the rules of a game could be changed in the middle of a game and a contract rescinded without any explanation.
Obaro also said that when CBN asked that Remita should refund what it received it promptly complied especially because the CBN is also their regulator.
On September 14, 2015, the OAGF had expressed concern at a project review meeting about the fees considering the enlarged scope of the project. SystemSpecs was not averse to price renegotiation. We wrote to the CBN that we are open to renegotiation and that an all stakeholders meeting be convened.
“Three weeks later on October 7, we wrote again that an all stakeholders meeting should be convened to review processing fees.
“Two weeks later on October 27, we were instructed by the CBN to refund all fees that have accrued to us in accordance with the contract. We strategically chose to comply within 24 hours of receipt of their letter as we did not want to allow the issue of fees in the heat of the moment to becloud the work we have done in the delivery of TSA for Nigeria. While refunding our own portion of the fees as demanded by the CBN however, we accompanied the refund with a fairly worded letter stating why the fees legitimately earned in line with our contract should be refunded to us. How much more could we have demonstrated good faith?
“On November 11, two weeks after refunding all fees and operating zero fees at the risk of a legal battle with other stakeholders, without hearing our own side of the story, we were erroneously accused of fraud, abuse and mismanagement of the TSA on the hallowed chambers of this highly respected Senate.
“To say the least sir, we feel used, abused, unappreciated and abandoned by the country for which we stuck out our necks and faith to deliver the platform that made the TSA possible, which in other climes, all citizens would be proud of, acclaimed, encouraged and motivated to further the frontiers of greater technological breakthroughs and innovation.
“In any case, pray, how could enforcing the terms of a validly signed and subsisting contract amount to fraud while discussions were already ongoing on whether the terms of the valid contract may need to be reviewed to recognize emerging realities? How can discussions on the need to re-negotiate contractual terms due to increased volumes form the basis to seek to throw the baby away with the bath water?”
The Chairman of the joint committee stressed that no matter how much money was involved, one per cent charge was too exorbitant for the job.
He commended all parties who made presentation for opening up and directed that all commercial banks not represented must be present at the next hearing of the committee on the matter.