FG’s Failure to Pay Service Providers May Ground TSA

By Obinna Chima

There are strong indications that the federal government’s Single Treasury Account (TSA) policy may be grounded, following the government’s failure to pay the technology service providers and participating banks their commission in the past 22 months.

A reliable source in the Federal Ministry of Finance, who spoke with THISDAY yesterday, said the major reason the federal government approved a new TSA tariff model which mandated that the service charge on payment to its ministries, departments and agencies (MDAs) from last Thursday, would be borne by the individuals or corporate organisations making the payment, was to ensure that the debts no longer accumulate.

Attempts to speak with the Accountant-General of the Federation, Mr. Ahmed Idris, on the matter proved abortive as he did not respond to phone calls yesterday, neither did he respond to text messages by THISDAY.

An indigenous firm, SystemSpecs, was engaged to provide the Remita platform on which the Central Bank of Nigeria (CBN) coordinates all accounts linked to the TSA.

Under the terms of the service which was agreed after some controversies, SystemSpecs is entitled to one per cent of each in-bound transaction and up to N5, 000 for each out-bound transaction. The firm was last paid in 2016, while as of December 2017 the total outstanding against SystemSpecs was in excess of N10bn for out-bound services.

The payment app is a single online platform that manages financial payments tags and has blocked all financial leakages in the government circle.

Responding to enquiries on why the federal government decided to shift the charges to payers, the source explained, “Remember the service provider used to get one per cent on each transaction on that platform, which was re-negotiated to one per cent, but a maximum amount of N5, 000. Then there was a disagreement on the effective date of the difference.

“But they eventually agreed with the date proposed by the federal government and for 22 months after that agreement was reached, they have not been paid and the debt has been accumulating. For now, the government’s indebtedness is in excess of N10 billion.

“So, because the service provider has threatened to withdraw its service, a meeting was held between the Accountant General and some Central Bank officials in Abuja, last Thursday, to resolve the matter and find a way to settle the debt.

“So, what the new mandate means is that from November 1, the debt would no longer accrue. But the annoying thing is that when you ask this government about their achievement, the first thing they would tell you is the TSA and yet the service provider is not paid for providing the platform for this to happen.”

Idris had in a statement last week explained that, “In line with the global best practices and amidst dwindling revenues, the federal government has approved a new Treasury Single Account tariff model which mandates that the service charge on payment to its Ministries, Departments and Agencies (MDAs) from November 1, 2018 would be borne by the payer.”

Under the new model, all funds collection into the TSA would require payers to bear the transaction cost.

The new model would therefore replace the previous one wherein the merchant— the federal government—bore the charges on all transactions to the service providers on behalf of payers.

In 2012, the pilot TSA scheme commenced using a unified structure of accounting for the 217 MDAs for accountability and transparency in public fund management.

In August 2015, the initiative was fully implemented and covered over 1000 MDAs after a presidential directive.

Idris had said the TSA had saved the government about N40 billion monthly.