Payers to bear cost of transfers to MDAs on Nigeria’s TSA

Effective November 1, 2018 the service charge on all payments to ministries, departments and agencies [MDAs] would be borne by the payer,
the Nigerian government has indicated, as it commences a new Treasury Single Account [TSA] fee regime.

In line with global best practices and amidst dwindling revenues, the federal government has approved a new TSA tariff model which
mandates that the service charge on payment to its ministries, departments and agencies [MDAs] from November 1, 2018 would be borne by
the payer.

This revelation emerged at the recently concluded One-Day Stakeholder Sensitisation Exercise on TSA e-Collection Charges held in Abuja on
Tuesday, organised by the Office of the Accountant General of the Federation.

Under the new model, according to information emanating from the office of the Accountant General of the Federation (AGF), Ahmed Idris, all  funds collection into the TSA would require payers to bear the transaction cost.

The new model would therefore replace the previous one wherein the merchant — in this case, the federal government — bore the charges on
all transactions to the service providers on behalf of payers.

In the previous tariff regime, the federal government owed the technology service providers and the participating deposit money banks
up to two years in service charge.

In 2012, the pilot TSA scheme commenced using a unified structure of accounting for the 217 MDAs for accountability and transparency in
public fund management.

In August 2015, the initiative was fully implemented and covered over 1000 MDAs after a presidential directive.

At commencement, all players, including all commercial banks, SystemSpecs and the Central Bank of Nigeria [CBN], agreed that a fee of
1 per cent of funds collected is payable.