Friday, 27 November 2015


Muhammadu Buhari, President, Federal Republic of Nigeria
Revelations emerging from the implementation of the decision to maintain a Treasury Single Account (TSA) have again shown that institutions such as the Central Bank of Nigeria (CBN) and the Office of the Accountant-General of the Federation (OAGF), which should safeguard the TSA-Federation Account, are doing little to end schemes to poach the public treasury.

Both agencies participated in fixing the processing fee for the use of SystemSpecs’ Remita software to transfer Federal Government revenues paid into deposit money bank (DMB) accounts to the TSA. It is pertinent to point out that no questions have been raised as to the propriety of SystemSpecs securing a government job while its chairman and some directors held Federal Government appointments during and/or close to the time when the contract was signed in 2011.

The latest information indicates that following the take-off of the TSA under the Buhari administration, the total sum of N7.6 billion paid out as fees up to October 27, 2015 has been refunded and that no fresh fees have been charged on transfers to the TSA since then. That development raises some questions. Was it in order to pay for the use of the Remita e-platform? How much should be paid and who should pay for using the Remita solution? The answers are deducible from the CBN letter of October 27, 2015 to the SystemSpecs company, which demanded “refund of all charges (one per cent cost of collection) made into MDAs accounts as a result of the implementation of the TSA.”

The public has become familiar with “Cost of Collection” incurred by revenue collecting agencies, which is shown in the monthly FAAC advertorials of gross revenue allocations. The cost figures are not synonymous with total revenues gathered by or on behalf of the named MDAs. The function of collecting revenue is not completed until all receipts are paid into the designated (or destination) TSA, that is domiciled in the CBN. It is, therefore, clear that the MDAs shown in the FAAC advertorials require the use of the Remita platform and should pay the SystemSpecs company out of the existing commission displayed by FAAC.

The revenue collection agencies presumably pay any retained DMBs to accept revenues/duties from taxpayers for their services. Why should the DMBs and even the CBN demand a share of SystemSpecs’ fees? Section 163 and 165 of the 1999 Constitution eliminate any chance of setting bloated fees such as “one per cent of total transferred receipts into the TSA” as cost of collecting public revenue with a view to poaching the TSA or Federation Account for the corrupt enrichment of a few individuals. The option which now recommends itself is for the affected MDAs to re-negotiate and pay global best practice commission rate for the use of the Remita software. However, going forward, the federal revenue collection agencies as the sole users of the Nigeria-specific Remita e-solution, should take advantage of the ensuing monopolistic position to outright purchase the e-platform.

Now, clearly aware that the aborted SystemSpecs fee of “one per cent of total transfers into the TSA” amounted to poaching the Federation Account, the CBN and DMBs interloped and collusively shared in the loot. Shockingly, the refunded N7.6 billion in connection with the TSA is but the tip of the iceberg of poaching of the Federation Account stretching back several decades. In 2015 alone, N888.3 billion was poached from the federal kitty in the name of servicing the Federal Government domestic debt stock of N7.1 trillion as contained in the 2013 CBN Annual Economic Report. By September 2015, the domestic debt stock stood at N11.0 trillion (an increase of 55 per cent over 2013), which would similarly escalate the domestic debt service payments.

The domestic debt in its present form is part of the fallout from the inappropriate printing of fresh naira funds for withheld Federation Account allocations, again, at the instigation of the OAGF. Rather than safeguard the federal kitty, the CBN exploits the wrong procedure for the enrichment of DMBs, preying foreign portfolio investors and few individuals. The routine mopping of the attendant excess liquidity, which on best practice should be given one-off interest charge of 0.1 per cent or less, has been cumulated by the CBN over the years as treasury bills (which subsequently become treasury bonds) that attract interest rates of up to 17 per cent, which are disbursed as a first line charge on the national kitty.

Neither the CBN nor the Debt Management Office can identify any physical structure financed with proceeds of the national domestic debt. The massive draining of the Federation Account or TSA funds through the national domestic debt originating from the faulty monetary policy management should be completely blocked. The saved revenue that is otherwise earmarked for domestic debt service payments should be ploughed into identifiable infrastructural projects.

Henceforth, government bonds should be floated to raise funds for the execution of clearly identified capital or infrastructural projects on condition that the target projects should be completed without fail in order to provide the required services and generate returns for the service and redemption of the bonds concerned. (guardian)