The Federal Government of Nigeria has officially ended its long-standing partnership with Remita, a payment solutions provider that has facilitated government financial transactions for the past 13 years. This decision represents a significant setback for System Specs, the parent company of Remita, which processed approximately $30 billion annually in 2016 from transactions involving merchants, billers, multinationals, small and medium-sized enterprises (SMEs), and various levels of government.
The government will transition to a new system 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. To ensure a smooth transition and avoid a complete overhaul, the phasing out of Remita will occur in two distinct phases.
The first phase begins today and will focus on payments and collections in Naira, as well as tax remittances. The second phase is scheduled to commence on June 1, 2025, and will encompass the collections and payments menu for foreign exchange (FX) components, along with integration into the Enterprise Resource Planning (ERP) systems of various ministries.
The migration process to the new system is expected to be seamless. All current and active users of Remita will automatically gain access to the new Treasury Management and Revenue Assurance System using their existing usernames and corporate IDs from the previous platform. According to the memo, “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.”
Furthermore, the government has established that only Payment Solution Service Providers (PSSPs) licensed by the Central Bank of Nigeria (CBN) and approved by the Accountant General will be authorized to collect revenue on behalf of government ministries, departments, and agencies (MDAs). Additionally, contractors working with federal ministries must register with the Federal Inland Revenue Service (FIRS) to be onboarded onto the new system. To promote transparency, the new system will also automate the deduction and remittance of internally generated revenue from federal agencies.
The termination of the partnership with Remita poses a substantial challenge for System Specs. The company reportedly processed around $6 billion in monthly transactions through its platform in 2020, a significant portion of which was related to government transactions. While System Specs has shown resilience in the past, including successfully navigating a Senate probe in 2016, the loss of this major government contract is likely to have a considerable impact on its revenue streams moving forward.
