e-payment and Nigeria’s public sector

It is high time Nigerians especially those in the public sector realise the importance of the recent introduction of e-payment system, writes REMMY NWEKE.


Notwithstanding efforts at clarifying issues by experts around the reported confusion that trailed the recent directive by the Accountant-General (AG) of the Federation over the introduction of electronic payment (e-payment) system in the nation’s public sector, some uninformed members of the workforce are still attributing hiccups associated to payments in the sector to ‘e-payment’.

This has become obvious following the promise to deliver on what exactly is electronic payment by the government of the present administration.
Experts have defined electronic payment as the ability to pay suppliers, contractors, vendors and even staff electronically at the touch of a button and affords electronic users to equally send all payments’ instructions electronically and receive the feed backs electronically.
ITRealms Online learn t that lately some Ministries, Departments and Agencies (MDAs) were discovered to have misunderstood the directive of total end-to-end electronic payment system to the temporary solution, which is a mixture of partly electronic and partly manual, otherwise tagged e-manual among stakeholders. Equally, it was gathered that most of the MDAs instead of standing up to be counted in the real execution of the e-payment project of the government, which is the end-to-end electronic payment, tacitly adopted a temporary solution, christened ‘e-manual.’

The Federal Government (FG), ITRealms Online recalled, had in the last quarter of 2008, declared war against all cash and cheque payments with the mandate to commence e-payment in the country from January 1, 2009, in all transactions in the public sector across all the MDAs.

Elucidating this position, the Accountant-General of Federation, Mr. Ibrahim Dankwanmbo, during a recent seminar in Abuja, pointed out that payment should from January 1, 2009, be conducted electronically to the beneficiary’s account and not with cash or cheque instruments. Stressing, this was part of strategies to enthrone a cashless public service and discourage corruption, while boosting accountability and transparency.

Decrying the amount of confusion that has pervaded the nation’s public sector in the wake of the electronic payment regime, renowned e-payment expert and chief executive of Nigeria’s leading software-based solution provider, Systemspecs Limited, Mr. John Obaro, warned that if this chaos is not immediately checked, the nation may be heading deep into backwardness.

He attributed the confusion to the avalanche of current payment systems in the country, top of which is the issuing of cheques and manually delivering the schedules to the likes of Pension Fund Administrators (PFA), cooperatives societies, National Housing Fund (NHF), National Health Insurance Scheme (NHIS), trade unions, and banks to mention but a few. Obaro noted that multiple payment portals with wrong impression about e-payment from banks, often constrain customers to one bank, and have not been helpful in understanding what constitutes true e-payment.

Obaro explained that what it entails is that there is an automated end-to-end electronic payment, which could be initiated from an office, thereby reducing work and not increase it, leading to a pleasant experience.

According to him, e-payment does not mean what obtains in most of the MDAs, including manual delivery of payment instructions to banks through Compact Diskettes (CDs), flash drives or even email attachment. He maintained that once a customer hops from one bank’s internet site to another, it is no longer e-payment, just as he decried the attitude of restricting customers to one bank or even making payments on one platform, and submitting schedules on another. This, he said, negates the notion of e-payment.“Once a customer surfaces at a bank branch, it is no longer e-payment,” Obaro insisted.

He advised that in order to surmount these challenges, SystemSpecs, for instance, three years ago introduced Remita, one of its web-based versatile electronic payment solutions, which affords customers either individual or corporate to pay or receive salaries or payments directly in their accounts and issue e-cheques to any person or contractors.

“All from the comfort of your home or office, as long as there is Internet linked Personal Computer (PC),” he asserted, outlining the relevant parties in e-payment sphere to include the end users, which cut across MDAs, corporate entities and individuals, then application service providers, switches and settlement houses, banks and finally the regulators.

Warning the government to ensure that the internal processes were got right for enthronement of real end-to-end e-payment structure, and urged those who want to remain manual to be manual instead of the half-baked e-manual, which is at the root of the e-payment confusion presently.

A member of the Central Bank of Nigeria (CBN) Think Tank on e-payment, Dr. Hakeem Bakare, told ITRealms Online that the nation has even shifted its attainment date earlier than scheduled, that is, instead of 2011, it would now be before end of 2009, based on the FG’s latest mandate on e-payment. The committee made up of stakeholders drawn from both financial and banking institutions, he said, has been having regular interactions with the CBN officials and strongly believes in end-to-end e-payment solution for the country.

“And it is the ultimate for Nigeria,” he declared, criticizing some MDAs for thinking that e-manual, which is a temporary measure pending when they would migrate holistically to pure end-to-end remedy to have overtaken the actual e-payment.

“It is a misconception of AG – Accountant General’s – directive,” he said and called for caution, noting that a situation whereby every Tom, Dick and Harry now carries one solution or another claiming to be offering electronic payment to the MDAs, which eventually leaves them half-way may not be the best for the country.

It was gathered on good authority that few months after the new system was pronounced, several civil servants could not access their salaries on time and those who eventually did were either reportedly short-paid or given someone else pay-pack, and remained largely uncorrected as any delay in whatever payment now among the MDAs are being tagged ‘e-payment is at work.’

Although it is being debated among stakeholders that it’s not yet Uhuru, as the perfect environment for the novel system is eluding the country with top on the list being that without power – energy – the e-payment initiative may hit the rock and the political will to pursue it to the letter.

Obviously accepted as a subtle of the larger e-government project; which encompasses the engagement of Information and Communication Technologies (ICTs) to improve the activities of public sector organizations, according to experts at eGovernance for Development (egov4dev) and mostly availing opportunities for interaction between government and citizens as well as the business community.

For some school of thought the implementation of e-payment should run concurrently with e-government so as to optimize the added value it tends to offer. Even as others advocated that for it to be a success, ICT infrastructure must be put in place, including well-organized telecom within the public sector based on robust network, which the government seems to have got right in establishment of Galaxy Backbone Plc.

Thus, it was very apt for FG to warn banks and MDAs recently against breaching its policy on e-payment, maintaining that all commercial banks must dishonour any cheque instrument drawn by the MDAs.

Making this clear through the Minister of State for Finance, Mr. Remi Babalola, at the 9th edition of the annual international conference and exhibition of CardExpo in Lagos, the government noted all its transactions requiring huge payments were required to be done electronically to the beneficiary’s account and not with cash or cheque instruments.

The minister represented at the occasion by his Special Assistant (Technical), Dr. Felix Ogbera, said that in this regard, “all commercial banks have also been directed to dishonour any cheque instrument drawn by MDAs from January 1, 2009, because they (MDAs) have since been warned to desist from the practice.”

The Federal Government, through the Central Bank of Nigeria, had in January 2009 issued a policy that all government payments must be done electronically, insisting that the policy was adopted as part of measures to enhance accountability and transparency and to check corruption.

Expressing optimism about the future of e-payment in Nigeria, he noted that an effective oversight of the payments system landscape was crucial to achieving an efficient, safe, reliable and dependable system, emphasizing that the government is aware of the enormous requirements for effective implementation of the payment system and fully committed to providing the right policy and the enabling environment for the system to grow and thrive.

“At the same time, experts in information technology and the financial sector must endeavour to find solutions to some of the serious challenges that had arisen from the usage of the electronic payment system in the country. Without question, the issue of data security is very important and efforts must be made by the experts to come up with a very formidable application to secure the data in the system to avoid fraud and build confidence in the payment platforms,” he counseled, assuring that the government would continue to facilitate financial reporting system, computerization of accounts and the electronic payment system across all MDAs.

It is therefore significant for the government to get it right by living up to its billing since it claimed to be aware of impending obstacles and commence implementation as soon as possible, which must include capacity building of civil servants at all levels, otherwise the e-payment initiative may worsen the level of corruption in the country if not well-managed.

Hence, it is appropriate for stakeholders to key into the recent draft bill on electronic transactions (e-transaction) presented last week in Abuja by the drafting committee to the National IT Development Agency (NITDA) led by its Director-General, Prof. Cleopas Angaye.

More so, collaborating with the like of the Institute of Software Practitioners of Nigeria (ISPON) and serious individual companies if it is proved that ISPON has gone comatose as it were.

The draft bill on electronic transaction is thus critical to the implementation of the Vision 2020 of the Federal Government and comes handy; when efforts at improving the nation’s e-commerce via cyber security law is seeking public comment.

The bill, when passed into law by the National Assembly, seeks to regulate electronic transactions and payment systems in the country.

The time to start to see the reality is now for every public servant who wants to remain relevant in the system.


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