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Should This Senate Still Be Retained?

Source: thewillnigeria.com
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As Senator John Owan Enoh read from the 37-page report that Wednesday morning [1] on February 24, the question above repeatedly came to my mind. At a point, I looked at the fellows sitting beside me in the Public Gallery overlooking the red chamber of the Senate of the FederalRepublic to see whether the figures coming from the report and the deprivation that our country has been made to suffer as a result of a policy aimed at plugging loopholes in government revenue safe keeping had the same chilling effect on them as it was having on me. The guys were just not bordered. They just looked on.

The question plaguing my mind is whether after reading the report of the Senate Joint Committe on Finance, Banking, Insurance and Other Financial Institutions and Public Accounts on the Abuse and Mismanagement of Single Treasury Account (TSA) Regime, anybody still wants to argue on the desirability or otherwise of the institution of the Senate in our political system.

Let us go into the connection between the Senate and the TSA before we examine the debate on whether Nigerians actually need a Senate or not. The TSA has been described as a public accounting system under which all government revenues, receipts and income are collected into one single account maintained by the country’s Central Bank. The purpose is ” to ensure accountability of government revenue, enhance transparency and avoid misapplication of public funds. The maintenance of TSA will help to ensure proper cash management by eliminating idle funds usually left with different commercial banks and in a way to enhance the reconciliation of revenue collection and payments”.

When the Buhari Administration decided to enforce the policy which had earlier been introduced by the Jonathan administration and gave a deadline of September 2015, the National Assembly lauded the move but said since it is an executive policy, it cannot be part of the arrangement. The National Assembly hinged its stance on the fact that it is not a revenue generating government agency. Rather, it is an autonomous arm of government.

Many have criticized the National Assembly for its decision but nobody has been able to fault the rationale for its decision. This position then set a scenario for suspicion. It is this suspicion that underpinned the motion moved on the floor of the Senate on November 11, 2015 titled “Abuse and Mismanagement of the Treasury Single Account Regime” sponsored by Senator Dino Melaye. He alleged that the nation is being shortchanged by a collusion of the Central Bank of Nigeria (CBN), Deposit Money Banks (DMBs) and the platform provider, SystemSpecs, owner of REMITA.

The Senate then ordered its committees on Finance; Banking, Insurance and other Financial Institutions; and Public Accounts to coalesce into a joint committee and investigate the operations of the TSA. It is interesting what the joint committee came up with. The CBN was required to provide the Electronic Transfer Platform for the TSA when it started in 2012. The apex bank said it lacked the capacity and then selected SystemSpecs as a stop gap solution.

In the appointment of this platform provider, two conflicting contracts were created. In the first contract dated March 28, 2011, signed by a Deputy Governor of CBN, the deployment of the REMITA and training for staff of MDAs. The cost of the service was to be N85.1 million. The contract was to last 12 months. The fee was to be N100 on every million transferred. On this contract, there was also a snag. Though the Accountant General did not endorse this contract as required, “some middle level officials at the CBN still went ahead to purportedly issue a renewal of CBN’s contract with SystemSpecs”.

Also, instead of a year extension requested by the platform provider, the committee noted that while the purported request granted tenure of one year, “the language and content of the so-called renewal contract that ought to have been determined by the award letter suddenly granted an automatic, timeless and limitless engagement”. This fact is deductible from the provision of clause 4 of the new contract which deals with Commencement and Duration of the contract. It says ” the parties have agreed that this agreement shall commence on the date of its execution for a term of one year and shall continue unless terminated in accordance with the terms contained in this Agreement” The committee also discovered an alteration of the fee regime in clause three which now states that ” A tariff of one percent (1%) of funds collected shall be charged for government revenue collection”. The new tariff rate is to be shared at the ratio of 50 percent to SystemSpecs, 40 percent to the DMBs as collecting agents and 10 percent to CBN as introducer. The Senate committee however noted that based on the provision of Sections 80 (4) and 162 (1) can be taken from the Federation Account without the approval of the National Assembly.

Since the money said to be transferred under TSA do not fall under revenue collection but mere movement of funds from one account to the CBN account, the CBN approved banking tariff in its Revised Guide to Bank Charges which covers this type of transaction is between N500 to N700 per transaction. Using that rate for the transactions made between March and October 2015 on the REMITA platform, the appropriate charge on the N1.32 trillion transferred in 937,869 transactions is N656,508,300 using the upper limit of N700 tariff per transaction.

But alas, using the one percent rate smuggled into the unapproved agreement, the Senate committee noted that N7.65 billion was deducted upfront by SystemSpecs. This translated to a loss of N7 billion to the government. This arrangement, according to the Senate, runs counter to the war against wastage, corruption and leakages in government revenue management. In fact, if the SystemSpecs and CBN arrangement had covered the total transfer of over N2.5 trillion expected to be made under the TSA by end of 2015, “the Federal Government could have paid about N25 billion to the platform provider, based on the charge of 1% transaction fee for all transfers/collections”. Note that an earlier Senate resolution halted further deductions last November.

With the exposé made by the Senate committee saving Nigeria so much money that could have gone into private pockets, who is still contending that we do not need the Senate? That money, when recovered can be used for development purposes that will benefit majority of Nigerians.

The Eighth Senate has distinguished itself from those before it in the way it conducts its constitutional business of law making, oversight, advocacy and giving approval to executive appointments. For example, if it had been in the past, the TSA investigation would not have seen the light of the day. From the day the motion was moved, money would have been moving round. With banks and financial service institutions involved, the probe would have become an opportunity for blackmail, bribery and cover-up. Things have changed. Those who did not believe the Senate when Senator Melaye moved the motion now have the opportunity to change their mind. The ball is now left in the court of President Muhammadu Buhari to recover all the funds inappropriately held back by the platform provider, the DMBs and CBN. He may also want to use some people as scapegoats for others to appreciate the new regime of transparency in both the executive and legislative arms.

Let us stretch the point further on why this new Senate may be making the difference. For the first time, we have ministerial screening and budget defence without allegations of exchange of money or Budget for bribery scandal. This Senate came to our aid in the electricity tariff crisis. It has democratized participation in the budget process. That is why it invited the CSOs to engage with the Senators on the budget proposals.

There are many more good things that can and will come out of this present Senate. That is only if they have the support of the people. Yes, when the members overstep their bounds, either as an individual or as a group, we need to caution them. However, it should be noted that what differentiates democracy from authoritarianism is the legislature. We need to nurture the institution and challenge it to beam the searchlight on other dark alleys where Nigerian money is being illegally diverted.

Written by Abu Quassim

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