Political Panorama Issue No 27
The appointment of Xpress Payments Solutions Limited as a new collecting agent under Nigeria’s Treasury Single Account (TSA) regime has sparked significant national controversy, highlighted by a strongly worded statement from former Vice President Atiku Abubakar. His criticism, which depicts the decision as a potential return to Lagos-style revenue monopolies, raises important questions about governance ethics, institutional integrity, and the political economy of public revenue management in Nigeria.
The TSA, formally adopted in 2015, is
widely regarded as one of the most significant public financial management
reforms in Nigeria’s post–Structural Adjustment era. It was designed to
consolidate government revenues, prevent leakages, reduce corruption, and
enhance fiscal transparency. A core feature of this reform is the deliberate
reduction of private intermediaries, given their historical association with
inflated commissions, opaque contracts, and politically connected rent-seeking
structures.
Amidst this, the discreet integration
of Xpress Payments into the TSA framework seems to oppose the core principles
of the reform and has reignited concerns about the gradual privatisation of
essential state functions. Atiku’s characterisation of this development as an
attempted “resurrection of the Alpha Beta revenue cartel” highlights deeper
apprehensions about state capture, the centralisation of fiscal power within
politically connected networks, and the possible erosion of public confidence
in national revenue systems.
This analysis, therefore, explores the concerns raised about the
appointment, evaluates the broader implications of introducing private
intermediaries into a mechanism originally designed to eliminate them, and
considers whether such an action may be legitimately characterised as a form of
“economic banditry.” Drawing on institutional theory, public choice economics,
and Nigeria’s historical experience with revenue consultants, the discussion
argues that while the term “economic banditry” may be rhetorically provocative,
the risks associated with opaque outsourcing in public finance are substantial
and merit rigorous scrutiny.
Understanding the TSA and the Logic of Centralised
Revenue Collection
The TSA is founded on three core
principles. First, it aims to centralise all government revenues into a single
account managed by the Central Bank of Nigeria, thereby eliminating the
fragmentation of public funds. Second, it seeks to markedly reduce private
actors' involvement in revenue collection, in light of the historical issues
related to intermediaries. Third, the system is designed to enhance
transparency by enabling real-time monitoring of all financial inflows.
The introduction of private agents
into TSA operations creates a structural contradiction. Historically, Nigeria’s
revenue collection was mediated by banks and consultancies that charged
considerable fees and fostered rent-seeking behaviour. The TSA reform was
therefore intended to prevent what scholars describe as the “fragmentation of
the public purse” and the “commercialisation of state revenue channels.”
In this context, the inclusion of
Xpress Payments into the TSA pipeline raises questions about whether Nigeria is
experiencing a policy reversal, a bureaucratic regression, or a deliberate
political entrenchment masquerading as innovation.
Governance Concerns: Transparency, Procedure, and
Institutional Integrity
A central concern raised in Atiku’s press release is the
opaque manner in which the appointment was made. Under Nigeria’s public
procurement framework, decisions of this nature are expected to follow clear
standards of transparency, open competition, stakeholder engagement, and strict
adherence to due process. When these principles are ignored, several governance
risks begin to emerge.
First, the legitimacy of public policy itself becomes
questionable. Financial reforms, especially those involving the management of
national revenue, depend on a broad consensus. When decisions are taken
unilaterally by the executive, public trust is weakened.
Second, accountability suffers. Without clarity on the
contractual terms, such as the fees to be paid, the scope of responsibilities,
or the performance benchmarks, it becomes impossible for the public or
oversight institutions to determine whether the arrangement offers value for
money.
Third, institutions risk becoming more vulnerable. Nigeria’s
history shows that opaque revenue collection mechanisms often become channels
for political financing or patronage networks, thereby weakening the autonomy
and integrity of public institutions.
Finally, such opacity sets a dangerous precedent. Once the
door is opened for one unclear outsourcing arrangement within the Treasury
Single Account system, it becomes progressively easier for other politically
connected actors to penetrate the revenue architecture under similar
circumstances.
These concerns resonate with institutionalist theories, which
argue that in neo-patrimonial states, formal reforms are frequently undermined
by informal networks that operate beneath the surface of official procedures.
Political Economy: State Capture and the “Alpha Beta
Analogy”
Atiku’s
description of the Xpress Payments appointment as a nationalisation of the
Lagos-style Alpha Beta model invokes the concept of state capture. State capture occurs when private interests shape
public policies to extract rents from state institutions. Nigeria’s political
economy characterised by weak institutions, patronage networks, and
personalised power has historically been susceptible to such practices.
Although the allegation has not been proven, it cannot be
dismissed as impossible. Several elements surrounding the situation resemble
global patterns typically associated with state capture. These include the
opaque appointment of intermediaries in sensitive revenue sectors, the
concentration of revenue streams in the hands of actors with potential
political connections, and the gradual privatisation of core state functions
without open or competitive processes. Added to this is the weakness of
legislative oversight, which often allows such arrangements to proceed without
adequate scrutiny.
While there is no conclusive evidence that Xpress Payments is
engaged in these practices, the structural features of the situation strongly
mirror the kinds of environments in which state capture tends to flourish.
Economic Costs: The Case for Calling It “Economic
Banditry”
The term “economic banditry” conjures the image of private
actors seizing public resources under the protection of state authority. This
depiction becomes financially plausible if the involvement of Xpress Payments
results in additional commissions or transaction charges, decreases the flow of
revenue into the public treasury, grants the company exclusive privileges, or
hampers the efficiency of the TSA’s digital infrastructure.
There are several reasons why such concerns may be justified.
First, the original aim of the Treasury Single Account was to eliminate the
role of middlemen in government revenue collection. Reintroducing private
collectors fundamentally contradicts that goal and suggests a possible reversal
driven by rent-seeking interests. Second, the inclusion of an additional
intermediary inevitably increases transaction costs and reduces fiscal
efficiency. These inefficiencies amount to a form of economic extraction,
draining resources that should rightfully go to the state. Third, if one firm
becomes deeply integrated within the revenue-collection system, it risks
gaining an oligopolistic grip over a vital fiscal mechanism. This concentration
of economic and political influence aligns with what is commonly described in
rentier-state analysis as a form of exploitative revenue capture.
Viewed through this perspective, the phrase “economic
banditry” is not mere hyperbole; it may accurately depict the potential for
predatory rent extraction inherent in the arrangement.
Counterarguments: Why the Fear May Be Overstated
To maintain scholarly objectivity, it is vital to acknowledge
that there are valid counterarguments. The government may genuinely aim to
modernise digital payment systems or to introduce redundancy within the TSA
framework. It is equally plausible that Xpress Payments possesses technological
capabilities not yet available from existing service providers. Currently,
there is no publicly accessible evidence connecting the firm to political
backers, and it may indeed be operating independently. Furthermore, the
structure of TSA operations might legally permit the inclusion of additional
agents without requiring approval from the National Assembly. Even though the
comparison with the Lagos Alpha Beta model is rhetorically impactful, it
remains a political analogy rather than an empirically verified parallel.
Taken together, these considerations indicate that while the
concerns raised are understandable and worth considering, firm conclusions
should be postponed until the government releases full details of the contract
and its underlying rationale.
Conclusion: Reform, Regression, or Economic Banditry?
The appointment of Xpress Payments Solutions Limited as a TSA revenue-collection agent touches on governance ethics, political economy, and public financial management. While the term “economic banditry” is used here to characterise the situation, the genuine concerns about opacity, institutional regression, and potential revenue capture raised by Atiku Abubakar are firmly grounded in Nigeria’s historical experience.
Whether this development ultimately amounts to economic banditry will depend on what future disclosures reveal. Much hinges on the structure of the fees involved, the level of transparency that accompanied the procurement process, the degree of independence the firm truly enjoys, and the extent to which the arrangement adheres to the core principles of the TSA. Until these issues are clarified, Nigeria once again finds itself in a situation where public vigilance is not only advisable but essential for safeguarding the integrity of the nation’s revenue system
Ola Olateju is a political analyst, columnist, and host of Political Panorama, a platform that dissects power, policy, and political behaviour across Africa and beyond. His works focus on governance, leadership ethics, and the moral undercurrents of democracy.
Until next week, this is Political Panorama with Ola Olateju watching the horizon,
one controversy at a time
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