Nigeria’s government has ended its 13-year partnership with Remita, introducing a new system called the Treasury Management and Revenue Assurance System. This transition will occur in two phases, beginning today, and affects how government payments are processed. The change is expected to impact System Specs significantly, which has previously processed billions in transactions.
The Federal Government of Nigeria has officially ended its 13-year partnership with Remita, a prominent payment solutions provider. This decision significantly impacts System Specs, the parent company of Remita, which handled approximately $30 billion in transactions annually as of 2016, facilitating payments for merchants, billers, multinationals, and government entities.
A new system, known as the Treasury Management and Revenue Assurance System, has been introduced to replace Remita, going live immediately as stated in a memo by Oluwatoyin Medin, the Accountant General of the Federation. To ensure a smooth transition, the phase-out of Remita will occur gradually across two phases, with the first phase focusing on Naira payments and tax remittances.
The initial phase launches today, while the second phase will begin on June 1, 2025, encompassing foreign exchange transactions and integration with the electronic resource planning (ERP) systems of government ministries. Existing Remita users will automatically gain access to the new system using their current account details, and necessary email notifications will be sent to facilitate this transition.
Furthermore, the government has mandated that only Central Bank of Nigeria (CBN)-licensed Payment Solution Service Providers authorized by the Accountant General may collect revenues for government ministries. Contractors associated with federal ministries are required to register with the Federal Inland Revenue Service to be onboarded into the new system, which aims to enhance revenue transparency by automating the deduction and remittance of internally generated revenue.
The departure from Remita represents a considerable loss for System Specs, which processed $6 billion in monthly transactions in 2020, with a substantial portion relating to governmental operations. Despite the company’s previous resilience, the loss of this critical government contract is anticipated to affect its revenue streams significantly.
In summary, the Nigerian government’s termination of its partnership with Remita marks a pivotal shift in its financial transaction processing strategy. The introduction of the Treasury Management and Revenue Assurance System aims to streamline operations and enhance revenue collection transparency. The phased transition and regulatory requirements for service providers indicate a structured approach to ensure continuity and reliability in financial management.
Original Source: thecondia.com
