Quick Summary: Nigeria has ended its 13-year partnership with Remita, transitioning to a new Treasury Management and Revenue Assurance System. The migration occurs in two phases, starting with Naira transactions before expanding to FX in 2025. Existing users will be automatically transferred, with stricter regulations for payment providers. This shift significantly impacts System Specs, the parent company of Remita.
The Federal Government of Nigeria has officially ended its long-standing partnership with Remita, a payment solutions provider that has handled government financial transactions for the past 13 years. This decision marks a significant shift in the country’s financial management system, impacting System Specs, the parent company of Remita.
Transition to a New Treasury System
Nigeria will transition to a new platform called the Treasury Management and Revenue Assurance System, which is set to go live today. According to a memo signed by Oluwatoyin Madein, the Accountant General of the Federation, the transition will occur in two phases to ensure a smooth migration and minimize disruption.
Phased Implementation Plan
- Phase One (March 2025): The first phase, starting today, will handle payments and collections in Naira, as well as tax remittances.
- Phase Two (June 1, 2025): The second phase will extend to collections and payments in foreign exchange (FX) and integrate with Enterprise Resource Planning (ERP) systems used by various ministries.
Seamless Migration for Users
To facilitate a smooth transition, all active Remita users will be automatically migrated to the new system using their existing usernames and corporate IDs. The memo states:
“Once any user is created, an automated email notification detailing the username and one-time password shall be sent. The system will mandate a change of the one-time password at first login.”
Regulatory Requirements for Revenue Collection
The new system introduces stricter regulations for revenue collection. Only Payment Solution Service Providers (PSSPs) licensed by the Central Bank of Nigeria (CBN) and approved by the Accountant General will be allowed to collect revenue on behalf of government agencies. Additionally, contractors working with federal ministries must register with the Federal Inland Revenue Service (FIRS) before being onboarded onto the new platform.
Increased Transparency in Revenue Management
To enhance transparency, the new system will automate the deduction and remittance of internally generated revenue from federal agencies. This move is expected to improve accountability and efficiency in government financial transactions.
Impact on System Specs
The termination of the partnership with Remita presents a major setback for System Specs. In 2020, the company processed approximately $6 billion in monthly transactions, a significant portion of which was government-related. Losing this contract could lead to a considerable decline in revenue for the company.
System Specs has previously demonstrated resilience, notably navigating a Senate probe in 2016. However, the loss of this major contract may force the company to explore new markets and business strategies moving forward.
Conclusion
With the implementation of the Treasury Management and Revenue Assurance System, Nigeria aims to modernize and enhance the efficiency of its financial transactions. While the transition signals the end of an era with Remita, it also paves the way for a more automated and transparent treasury management system.
