Nine deposit money banks (DMBs) in the country have deployed electronic collection and payment platform developed by indigenous software developer, SystemSpecs, at their online banking sites, BusinessDay has learnt. This is in preparation for the commencement of the Federal Government’s directive, which mandates all ministries, departments and agencies (MDAs) of government to deposit their revenue into consolidated revenue fund of the federation and treasury single account (TSA).
As the country gradually migrates to cashless economy, industry observers are of the view that financial institutions have eyes fixed on taking ad- vantage of government’s renewed efforts to boost internally generated revenue (IGR), through the blockage of revenue leak- ages, particularly in the face of declining prices of oil, the country’s main source of income.
The Federal Government’s directive is however expected to take effect by March 1, this year, even as the President Goodluck Jonathan administration seeks to promote accountability and better reconciliation for government MDAs.
The financial institutions currently running this innovative electronic payment application include Access Bank Plc, GTBank Plc, Zenith Bank Plc, Skye Bank Plc, Union Bank Plc, Sterling Bank Plc, Wema Bank Plc, FCMB, and Keystone Bank. BusinessDay learnt that 14 other banks are currently training their staff on the e-collection system dubbed ‘Remita’.
John Obaro, managing director, SystemSpecs Nigeria Limited, confirmed the development at a sensitisation workshop for banks in Lagos, stating that “17 banks have been trained on the Remita Bank Branch Collections, representing around 76 percent of bank branches nationwide”. More training and online integration, he added, are ongoing.
“The e-collection will avert a larger proportion of revenue theft, diversion of collected revenue and all sorts of corrupt practices associated with revenue collection”, said Dipo Fatokun, director, banking and payment system at the Central Bank of Nigeria (CBN).
The country has recorded some successes in the area of improving IGR at the state government level. For instance, Lagos State introduced the Lagos State Government Electronic Banking System of Revenue Cycle Management (LASG EBS-RCM) with the Direct Bank Lodgment System (DBLS) of the revenue collection process in 2002. IGR grew annually at an aver- age of 6 percent.
After the pilot of the cashless policy in 2012, IGR grew by 10 per- cent. The Ogun State government also introduced a cashless pilot scheme in 11 state owned tertiary institutions in swift response to revenue leakages. At the end of Q1 (first quarter) 2012, the government reported revenues of N2.5 billion which is 195 percent increase from reported revenues in Q1 of 2011 without an increase in fees. Jonah Otunla, accountant general of the federation, at a workshop on the take-off of the electronic collection project, directed all government MDAs to comply with the new initiative by closing their revenue accounts with banks latest by February 28.
The revenue account, he further said, should be transferred to the consolidated revenue fund of the federation. According to him, the e-collection scheme is a revenue enhancing programme aimed specifically at freeing more funds for budget performance.
“We are perfecting a system of collection; we are not perfecting a system depriving commercial banks of income. We just want to make revenue collection a little more efficient but in the process it might influence the inflow to the commercial banks and that’s why the Central Bank of Nigeria is a playing a pivotal role”, Otunla was quoted by govTechnology.com. System Specs was appointed to provide the payment gateway for the TSA initiative of the Federal Government. “This entailed the integration of Remita with the Government Integrated Financial Management In- formation System (GIFMIS) and CBN systems. “Working with the foreign GIFMIS consultants, the project commenced on 25th October, 2011 and went live on 2nd January, 2012 (nine weeks)”, Obaro explained.