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Category Archives for: Nigeria

Remita, TSA and Four Questions Arising

17 November 2015 by Oo Nwoye

With the full implementation of the TSA policy by the Buhari Administration, SystemSpecs a Nigerian technology company has been accused of swindling the country of billions of Naira using Remita, a product of the company.

The aim of this blog post is to explain Remita’s role in the implementation of the TSA and try to highlight where the issues have come from and ask some pertinent questions.

First, some background information.

TSA, which stands for Treasury Single Account is a policy that intends to consolidate all government revenues in a single account. The idea is, whether you are paying N100 for injection in UBTH (University of Benin Teaching Hospital) or buying crude oil with hundreds of millions of dollars from NNPC, or paying NTA for adverts, all the monies would be domiciled directly into a single account at CBN (Central Bank of Nigeria)

Why is this necessary? This is to avoid situations whereby, administrators of various agencies (UBTH, NNPC and NTA in our examples) from having direct control over the money collected by their agencies. If they need money, they will have to apply to get it from the CBN account. No more dipping hand into the government purse to do “thanks for coming”

Remita, The Chosen One.

Before the TSA implementation, each of the government agencies decided where to open accounts to keep these government revenues and HOW to collect the monies. So the CMD (Chief Medical Director) of UBTH could decide to open 10 bank accounts for UBTH in 5 different banks after a lot of lobbying had been done by branch managers etc, NNPC could have another 20, NTA another 15. This is also where allegations of “fixing money” for interest used to come from.

The implementation of the TSA policy (enshrined in the constitution) was piloted by the Jonathan government. Only a few MDAs (Ministries, Departments and Agencies) like the FIRS were chosen to pilot this system.

For the pilot, SystemsSpecs built a product called Remita that could be used to collect and collate money through multiple channels and was chosen to be the software to be used for this collection.

That is the first issue

Sunk Costs and Competition.

There are 2 ways people usually pay for things in Nigeria either with cash deposits at the bank or cashier points, or using a credit/debit card at a POS or online.

BEFORE the TSA implementation, each MDA set up individual systems for collections. Companies like Interswitch, ETranzact, SocketWorks, etc (which primarily do online/digital collection) already spent LOADS of money trying to get the contract to give them the right to collect money on behalf of these agencies. In some cases, they had to build infrastructure in these MDAs (computers, Internet, Generator etc) to make their work easier.

SocketWorks for instance collects money on behalf of Immigration, Interswitch on behalf of many Hospitals and Schools etc, Same with ETranzact. And we are not including “other costs” of doing business in Nigeria. SystemSpecs also had a few customers.

The Buhari then put a deadline for the TSA implementation.

The CBN rationally decided to use the provider and product that had run the pilot system and that was SystemsSpecs’ Remita.

All of a sudden from sharing the spoils of various MDAs, all the other providers lost all those customers and commissions to “one Remita of a somebody”

All their hustle, down the drain.

That is the second issue.

Commissions and Payments

When a person or an entity collects money for you, it is the norm for the person to be paid part of the proceeds to collect and reconcile that money. For online payments, there are many players who share the ~2% fee that is charged the merchant. For cash payments, it is less standardized but it can be up to say 5% of each transaction.

So of the 1000 naira you pay to UBTH via Interswitch’s WebPay or PayDirect, they take ₦20. By the same calculation, if you pay ₦1 Million, they are entitled to ₦20 000. However, there is usually a cap on the amount of commission on each transaction.

Thought Remita transaction charges are capped even on their website, it seems the deal with the federal government is 1% uncapped.

That is the third issue

Double Charging

BEFORE the full implementation of TSA, monies had already been collected. So let us assume UBTH had ₦1 Billion in a Unity Bank account somewhere, they were given a deadline to transfer that money to the TSA domiciled with CBN.

Note that money in Unity Bank was ALREADY less the commissions paid to collectors like Interswitch.

In transferring that money to CBN, it is alleged that the Banks rather than using NIBSS (Nigerian Interbank Settlement System, a company owned by CBN and the Banks) and paying next to nothing, decided to do it through Remita who would take an uncapped 1% (25 million in this example) for doing absolutely nothing.

That is the fourth issue

In summary, here are the questions arising that are causing problems.

  1. How was SystemsSpecs/Remita chosen to be the sole collector for the Federal Government? Was the Procurement Act followed?
  2. What happened to the existing systems that were put in place especially the ones that had long term arrangements and high setup cost?
  3. How monies are ALREADY in the system (bank accounts) be transferred to the CBN account?
  4. As for the collection, what is the commission taken my SystemsSpecs? Is it (un)capped?

Those are the main issues from what I understand from all parties. Of course aw with politics, there people are mixing up issues to sell their agenda.

That Remita stands for Remi Tinubu Ahmed as much as Jega stands for Jonathan Ebele Goodluck Azikiwe.

My Comments.

  1. For once, it is a good thing that an indigenous company is being used for such a project.
  2. It is understandable if the Federal Government decides to use a single provider/system for the collection of taxes and revenue. However, it could be a big risk to have one single entity doing everything from Customs to Schools to FIRS.
  3. There should be a transparent procurement process for the service provision and more than one provider chosen.

Fun facts

People are usually crying that Interswitch is the bully. It is interesting to see Interswitch crying foul.

Remita actually uses Interswitch’s WebPay for the online collections part of the as a middleman for the online payments aspect. As at yesterday when I checked, it was no longer working.



Thanks Boro for reducing the typos. 

4 comments | Categories: Nigeria, Technology | Tags: , , , , , ,

It’s Hard Being Nigerian Online : The Moto G Edition (UPDATED)

31 July 2015 by Oo Nwoye

UPDATED: Scroll to the bottom

I love the Moto G.

For price and quality, no Android phone comes close. It’s three times cheaper than one of those plastic SAMSUNG Galaxies and at least twice better (see, I’m always hyping it). I have proven my love for the Moto G with my pocket and the number of referrals I’ve made that turned to sales.

Months back, my Moto G broke not because it isn’t strong, (the Moto G is actually a direct descendant of the Nokia 3310 and can reliably be used to wedge your car when changing your car tyre) but because I was struggling with LASTMA who caught me recording him because he caught me using my phone while driving (you know as LASTMA people hand be na) because…

I digress.

This post is not because of my love for the Moto G but my sadness that the love is not reciprocal simply because I’m Nigerian.

The Sudden Realization

After my phone broke, I decided to step down to “use Infinix hold bodi” until the new Moto G comes out. Two days ago it did!

I rushed to the site, realized you could customise and engrave your name on it. Like everyone on Twitter (having a high dose of narcissism) I tried to engage my name abi, Twitter name @OoTheNigerian

Nigerian Not Allowed

“We’d rather you not say that” ?!! This had to be a bug! So I tried another

American Allowed

American Allowed

Cold this be a “third world” vs. “first world” issue? Go I came back to base and tried another

Ghana man dey!

Ghana man dey!

Kai! Even Lil Ghana. Chai!

So I went direct

Offline or Online, Dem Wan Hold Us

Offline or Online, Dem Wan Hold Us

Basically, the word Nigerian is seen as unfit for Moto Consumption. Try it here

I’m not angry or offended because it was not done deliberately. What most likely happened is the database/algorithm they are using to do the naming has blacklisted  “dirty words” The Moto G site just used what was there.

Anyway, we need this corrected.

Help us take the word “Nigerian” from that list by clicking this (It pre-fills a polite tweet to @motorola and their CEO @rosterloh)

Prejudice is when Algorithms don’t want nothing to do with you. We Nigerians experience prejudice everyday offline on the immigration lines and online when trying to transact on eBay, Use PayPal or even peruse OkCupid (Don’t judge me. I dey do research).

There was a period when mentioning Nigeria(n) in your email was bound to send it to spam. You know, “Pattern matching”

It is why I give special kudos to our folks who make it eventually especially in tech and outside these shores.

But, as they push us back, we march forward with all the pride and arrogance we can muster :D.

I, Nigerian

I, Nigerian

The above picture was taken the TechCrunch office in SF. It was on TechCrunch I started using “Nigerian” in my online alias when I kept encountering hostilities, I decided to take it to them ( the TC monkey now seems symbolic and my arrogant face, apt :D)

As for my “Yes, I Am Nigerian” tee, I made the first version when I traveled to “the west” for the first time. UK to be precise. I noticed how countenance changed once it was “found out” I was Nigerian. First experience was at the airport.

I decided to make a tee shirt to give an advanced warning :D.

I’m nice like that.


Thanks Banke for helping me proofread. 



A Mike Jones reached out and informed me the word Nigerian is now accepted.  You can click this to give them a shout out.

Nigerians Accepted.

Nigerian Accepted.

9 comments | Categories: Commentary, Nigeria | Tags: , , ,

Nigeria’s BVN Policy and ONE Matter Arising

30 June 2015 by Oo Nwoye

Nigeria’s Central Bank instituted a policy that requires a SINGLE identifier (BVN – Bank Verification Number) for every banking customer in the Nigerian banking system. Today is the deadline for participation and after which, you will not be able to access your money without it.

On the surface, this is a GREAT idea and not different from the SSN (Social Security Number) system used in the US banking system. If you ask anyone the reason for this, they will list out the upsides to having a biometrically verified identity especially in the banking system.
They may also tell you that it helps in:

  • Prevention of fraud (using different identities to open accounts) which will help with
  • Ensuring a valid credit monitoring system (if you are banned from a bank for defaulting, another bank should have that information)
  • Ensuring tax compliance.

However I am VERY uncomfortable with it and that has to do with data protection in Nigeria or should I say a lack of it?

The strength of a chain is determined by its weakest link.

The system that makes it easy for FIRS to monitor all the accounts you have access to, also makes it easy for unscrupulous people to have the same access. My issue is, what systems are in place that prevents the unscrupulous access.

Let me try to illustrate

Before and After BVN

Before and After BVN

In the example above we have our Magnate, Tolu with 6 accounts in the Nigerian banking system. We all know him as Tolu Ogunlesi and as the Founder of AyeDee Limited. Maybe some have seen his passport and know his other name to be Chukwuma (it is)

Here are the ‘right’ use cases of the BVN as being sold to us

If Tolu Ogunlesi is found to be a member of any type of cabal and all his assets are to be seized, presently his ₦ 2 Million in GTB, ₦19k in Access and his $700 in Union Bank would be at risk. However, as we can see from his accounts opened with aliases, the man will still be balling.


When Tolu an Instagram Celebrity and Private jet hopper declares Personal Income Tax on the amounts in the previous paragraph, “nothing can happen” since the FIRS would not be aware of any other source of income. They have no idea who Chuks Ogunlesi is after all.

With the BVN system, all the accounts he is a signatory to are tied to a SINGLE identifier 234666419 . With a single query, the list of all his bank accounts would be pulled up. So there is no way to hide if the good guys come for the bad guy Tolu.

However, risk is not about when things go right. HOW about when they go wrong?

If some guys decide that “this Tolu sef too dey do sef” or wonder “what is this Tolu feeling like sef because he has over 100k Twitter followers” (Any thing can trigger anger over here) and decide to kpake him then wonder what his ransom should be, there will be no need for an ATM card to know how much he has. All they need to so is collect his BVN find out his worth and ask for the 50% of all his monies as their share.

Ransoms can be more scientific/formularized. “Make we collect only 50% of what that guy owns”

In theory, this should not happen but we all are aware that there is ZERO security on biometric data collected in Nigeria. Do I need to remind you how easy it is to access the SIM registration database? or how available our voter registration database is?

Think for a minute, did you see any form of security when you went to register for your BVN? Now when the database is synced, the adhoc 50k/month staff at GTBank Oshogbo has access to it. Likewise the chap in the Aguleri , Nguru, Otoueke or gasp BENIN!! branch.

I really do not have power to fight this BVN system however, if there is anyone out there who can, I’d like you to find out the following.

  1. Is there ANY system/person that can determine all your bank accounts with the BVN?
  2. Who has access to that system and what is the procedure to having that access?
  3. Has there been an external audit (preferably international) of the system as a whole to assess the security risks of the BVN system?

Right now, I no too hold so I am not really worried or affected. But one needs to prepare for one’s future :D.

BTW, I looked around and could not see any Data Protection Law for Nigeria although I came across a bill trying to establish the Data protection Office.

Thanks Boro for helping reduce the typos in this post.

10 comments | Categories: Commentary, Nigeria | Tags: , , ,

Xenophobia vs. Protectionism: How should local Nigerian startups compete with ‘foreigners’?

20 January 2014 by Oo Nwoye

 I read a post that would not be too out of place if it came with the byline of BNP’s Nick Griffin.

The crux of the post is that we should be afraid of the foreigners coming to Nigeria to take it all from the Nigerian tech scene and “forcing them back into the Lagoon” is the way forward.

I suggest you read it

Ideally, it would not have been worrisome but the fact that it was written by a poster boy for the Nigerian internet space and wholly endorsed by Sim Shagaya, CEO of Konga who called it “words of wisdom” makes it so

If people do not state early, their opposition to such xenophobic (irrational fear of foreigners) thinking, it could easily be misconstrued as a true representation of the view of Nigerian tech ecosystem.

This is coming on the heels of a Nigerian commentator/activist advocating that foreigners should not be allowed to run malls in Nigeria

Interestingly, Nigerians are particularly known for traveling far places to do business and are usually on the receiving end of “these foreigners are our problem” thinking.

Why the fear of Rocket Internet?

Rocket Internet is an Incubator funded by 3 German brothers, the Samwers. Their business model initially was copying businesses that had gained traction in USA but yet to enter Europe then sell these companies to the original US companies when they are ready to tackle Europe.

Version 2 of their current business model is aggressively building ecommerce verticals in Africa, Middle East and South East Asia.  They centralize and reuse technology in Germany and then hire a person to lead the operations execution in the country they are tackling. They sell and leave as quickly as possible

When they come into a market (it is rumored that operation leads on the ground, aka co-founders, are given $1million to check out the market) they move aggressively, hire and quickly spend lots of money (in the local ecosystem) in a very short time.

This of course causes a mini inflation in the local tech scene as they poach staff, cause an increase in the ad buying cost etc, mainly making things much more expensive. No local startup certainly likes it since it makes business unnecessarily more expensive to run

My views on Rocket Internet have evolved over time. Before, I thought they were a net negative to our ecosystem since they play the pure extraction short term game. Meaning, they build solely to sell and when they sell, they take the money out and move to the next area to extract from; leaving a wake of over stretched local startups and questionably self-sufficient businesses.

But that was one dimensional thinking on my part. Rocket internet is majorly responsible for the urgency we have in our local tech system especially in the ecommerce space. Alongside stretched startups, they leave in their wake human capacity trained on their dime a more developed market and of course a new investor holding the bag. I’m certain the local advertizing companies are also not complaining.

A negative remains though. In other successful tech ecosystems, local money is a major part of the tech scene so when there is an exit, the money is poured back to the local economy and it gets bigger. With the Rocket model, nothing like that happens.

How do you solve a problem like Rocket Internet? Protectionism or Xenophobia?

What is worrisome in Jason’s post is the fact that a legitimate problem (the Rocket extraction model is not the best for a fledgling ecosystem) is muddled with the xenophobic “stop the foreigners” solution.

What is bad for the Nigerian ecosystem is the extraction game irrespective of who plays it.

[Side note: Interestingly, Nigerian politicians and to a large extent ‘business men’ are guiltier in playing the extraction game. They take money from Nigeria (usually foreign loans) and go and develop Dubai. At least Rocket is bringing in money before planning to take out their spoils.]

I’m in favour of protectionism to an extent.

Protectionism are laws created to protect local companies from foreign (company) competition especially if the locals are operating at a disadvantage. The value in protecting home companies is based on the assumption that they will employ residents, pay tax and limit capital flight. They more they succeed, the more tax they will pay and more people they will be employed locally. Local companies could be run by New Zealanders for all anyone cares. i.e citizenship of local company owners does not matter.

Hypocritical words

Jason states:

“We are at the cusp of losing the key internet 1.0 verticals to non-indigenous players. This is something which would be dire for the ecosystem at large.”


“My simple thought. Our fathers lost the Telecoms, PayTV and other technologically driven industries to foreigners. Let’s not make the same mistake and lose our internet industry.”

So what exactly is he arguing are we losing?

If he is talking of returns, shouldn’t those who take risk be rewarded? When Konga and IROKO eventually successfully create a massive liquidity event, who would win?

Well, their approximately 100% foreign investors.

Is he talking about losing by building foreign capacity as against building local capacity?

Jason’s Co-founder, first angel investor and IROKO COO Bastian (who runs the company) is ironically, German (same with Rocket’s founders). DealDey (Sim’s previous company) is run by a foreigner. Konga and IROKO have foreigners in leadership positions.

There is no noticeable difference between the citizen structure i.e the citizen composition of the employees of either Sim/Jason’s company and an average Rocket Internet company e.g. EasyTaxi and Jumia (until recently) are Nigerian run.

I have previously written about why we are losing the investment game to foreigners.  In summary, there is less risk and turnaround time in investing in traditional tangible opportunities like real estate. Only those who have made money via software can see the internet opportunity. Sadly, they are not much around.


The absence of international competition is the reason why Nigerian payments infrastructure has been way behind. Without competition in PayTV, we would have been at the mercy of HiTV that broadcasted premier league matches without sound or halftime commentary.  Without competition the customers will lose.

The world is flat and companies can no longer hope to be protected by artificial political borders. From day one, you should build like the biggest player in the world is going to launch in your market tomorrow.

The sole reason Silicon Valley is the outright leader in technology startups globally, is the combination of the concentration of talent brought by the high priority placed on competence irrespective of origin and a lot of money.

What is the way forward?

Asides the xenophobic card, how do local ‘underfunded’ companies compete against the foreigners especially those playing the extraction game?

Ironically, Jason answered  this in the beginning of his post referencing the Alibaba movie

“a great company culture, locally focused product development and a fierce belief in your local market can withstand and defeat a massive global competitor”

In addition to the above the government has a role in ensuring local capacity is built. Local businesses are encouraged to  operate/employ locally,  Yadda.. yadda  yadda..


First they came for Rocket Internet, but I did not speak up because I was not German..

Then they came for the Kenyans, but I did not speak up because I was not Kenyan..



  1. I do not for one second think either Jason or Sim are xenophobic one bit. Jason is even arguably British. But playing the xen? card for short term individual business advantage is VERY detrimental to the general ecosystem at large in the long term.
  2. Make no mistake, I am a very biased man all things equal, if a local company is executing at 70% of their foreign counterpert, I will go with a local. Same with friend vs. non –friend, family vs. non-family. Etc. However, I will not go attacking the other.
  3. Being pro x is cool, being anti y, had better be justified and being foreign is the worst of justifications.
  4. Triple irony is that Alibaba’s major investor was Yahoo! – a foreign company founded by a Chinese immigrant who would not have founded an American company if Silicon Valley was anti-foreigner (this is getting too meta for me).
  5. Oh. The Alibaba story was told by a foreigner.

33 comments | Categories: Commentary, Nigeria, Uncategorized | Tags: , , , , , , , , , ,

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