Nigeria's federal government has not abandoned Remita, the electronic payment platform that has powered the Treasury Single Account (TSA) for nearly a decade, despite reports suggesting otherwise. Instead, a new system, Treasury Management & Revenue Assurance System (TMRAS), will operate alongside Remita, the latest in a series of attempts to loosen the company's grip on government revenue collection.

The development stems from a 2023 memo by the Office of the Accountant General of the Federation (OAGF), which authorized Simplify International Synergy Limited to build an "FGN Treasury Portal" and requested historical TSA transaction data. While this move signals the government's desire to restructure how revenue collection works, a senior Remita executive told TechCabal that TMRAS remains layered on top of Remita's existing infrastructure, not a replacement.

Remita, a subsidiary of SystemSpecs, has been at the center of controversy and regulatory scrutiny over a perceived monopoly in processing federal payments. The company won the federal government's bid in 2012 to consolidate public funds into the TSA, an initiative to improve transparency and curb leakages. Though proposed under Goodluck Jonathan's administration, the system was not fully implemented until 2016 under Muhammadu Buhari. Since then, Remita has played a significant role in Nigeria's public finance management, allowing real-time tracking of government inflows.

Despite its benefits, politicians and regulators have repeatedly attempted to reduce Remita's dominance. In 2016, the Senate investigated the company following allegations of corruption, but it was cleared of any wrongdoing. Still, critics argue that entrusting a private company with sole control over government revenue collection creates risks. Various efforts to introduce alternatives have failed over the years, including attempts by the Central Bank of Nigeria (CBN) to design a new payment aggregation model.

According to a senior Remita executive, these efforts fell apart due to a lack of technical depth. "They never understood the end-to-end of what we were doing and the depth we had gone," the executive said. "They look superficially and issue a circular. Without understanding the depth of the problem, a circular announcing a new arrangement won't help."

While TMRAS represents the latest attempt to unbundle Remita, its impact remains unclear. The TSA system has evolved to allow at least four other Payment Solution Service Providers (PSSPs) to collect payments. However, Remita has remained the sole aggregator responsible for remitting funds to the Central Bank. The company's contract states it charges a 1% transaction fee, shared with the CBN, participating banks, and PSSPs. Whether the introduction of TMRAS will significantly alter this arrangement or finally succeed in breaking Remita's dominance remains to be seen.

The implications of this development are significant, as it could potentially reshape the landscape of government revenue collection in Nigeria. As the government continues to explore ways to improve transparency and efficiency in public finance management, the introduction of TMRAS marks a crucial step towards achieving this goal. However, the success of this initiative will depend on the government's ability to effectively implement and integrate the new system with existing infrastructure.

As the situation unfolds, it will be essential to monitor the impact of TMRAS on Remita's dominance and the overall efficiency of government revenue collection in Nigeria. One thing is clear: the introduction of TMRAS marks a significant shift in the government's approach to public finance management, and its implications will be closely watched by stakeholders in the fintech industry and beyond.