Nigeria Ends 13-Year Partnership with Remita, Transitioning to New Payment System

The Nigerian government has ended its 13-year partnership with Remita, transitioning to a new system called Treasury Management and Revenue Assurance System. This change will take place in phases, starting today. System Specs faces revenue challenges due to this termination, as Remita was a significant source of income, processing billions in transactions.

The Federal Government of Nigeria has officially terminated its 13-year partnership with Remita, a payment solutions provider critical in managing government financial transactions. This decision represents a significant setback for System Specs, the parent company of Remita, which in 2016 processed approximately $30 billion in transactions involving various entities, including merchants and government agencies.

In place of Remita, the government will introduce a new system called the Treasury Management and Revenue Assurance System, which will commence today as indicated in a memo from Oluwatoyin Medin, the Accountant General of the Federation. To ensure a smooth transition, Remita’s phase-out will occur gradually across two phases, with the initial phase focused on payments and collections related to the Naira and tax remittances.

The first phase of the transition will begin today, while the second phase is scheduled to launch on June 1, 2025, covering foreign exchange components and integrating the new system with the ministries’ Enterprise Resource Planning (ERPs). Existing users of Remita will have seamless access to the new system by using their current usernames and corporate IDs. A notification email containing login details will be sent to each user.

Only Payment Solution Service Providers (PSSPs) that are licensed by the Central Bank of Nigeria (CBN) and approved by the Accountant General will be permitted to collect revenues on behalf of government agencies. Furthermore, contractors working with federal ministries are required to register with the Federal Inland Revenue Service (FIRS) to use the new system, which aims to enhance transparency through automated revenue deductions and remittances from federal agencies.

The conclusion of the partnership with Remita marks a significant challenge for System Specs, which processed approximately $6 billion monthly in transactions in 2020, largely from government operations. Despite the company’s resilience in overcoming previous challenges, including a Senate investigation in 2016, losing this key government contract is expected to severely affect its revenue capacity.

The Nigerian government has concluded its 13-year partnership with Remita, transitioning to a new system to manage financial transactions. This shift affects System Specs significantly as it loses a major revenue source. The new Treasury Management and Revenue Assurance System aims to streamline processes and enhance transparency, but the impact on System Specs remains to be seen.

Original Source: thecondia.com