Nigeria’s Federal Government has terminated its 13-year agreement with Remita, a key payment solutions provider. It will introduce a new system called the Treasury Management and Revenue Assurance System, transitioning in two phases to facilitate smooth payments. Current users will retain access, while the impact on System Specs is significant as they lose a major government contract affecting revenue.
The Federal Government of Nigeria has officially ended its 13-year partnership with Remita, a payment solutions provider crucial for facilitating government financial transactions. This decision significantly impacts System Specs, the parent company of Remita, which once managed approximately $30 billion in transactions annually, catering to various sectors including government agencies and businesses.
To replace Remita, the government has introduced a new system named the Treasury Management and Revenue Assurance System. Launching today, the transition from Remita will occur in two phases to ensure a seamless migration. Phase one includes handling payments and collections (Naira component) and tax remittances, beginning today. Phase two will start on June 1, 2025, addressing foreign exchange components and integration with ministries’ ERP systems.
Current users of Remita will transition smoothly, as they will maintain access to the new system using their existing usernames and corporate IDs. Upon user creation in the new system, users will receive an automated email containing a username and a one-time password, which must be changed upon first login. This ensures a secured and efficient transition.
To streamline revenue collection, only Central Bank of Nigeria (CBN) licensed Payment Solution Service Providers (PSSPs), approved by the Accountant General, will be authorized for government transactions. Contractors engaging with federal ministries must now register with the Federal Inland Revenue Service (FIRS) to utilize the new system. The new platform aims to enhance transparency by automating the deduction and remittance of internally generated revenues.
The termination of the agreement with Remita poses a significant risk to System Specs, which handled approximately $6 billion in monthly transactions in 2020, mainly comprising government-related payments. Despite past challenges, such as surviving a Senate inquiry in 2016, the loss of this critical government deal is likely to have a considerable negative effect on the company’s future revenue.
The Federal Government of Nigeria has ended its partnership with Remita, introducing a new Treasury Management and Revenue Assurance System to facilitate transactions. The transition will happen in phases, ensuring existing users can maintain access. The shift emphasizes the importance of authorized payment service providers and aims for greater transparency in revenue collection. The impact on System Specs, due to the loss of revenue from a previously substantial contract, remains to be seen.
Original Source: thecondia.com
