He stands some 1.7 meters from the ground, but his vision pierces mountain heights.
He spent only seven years at Nigeria’s famous iconic bank (of blessed memory), the International Merchant Bank (IMB) and had a swift rise to the top of the bank’s Information Technology (IT) unit.
At IMB, his prowess was acknowledged and rewarded. He was comfortable.
Yet for John Tani Obaro, the urge for a new venture was more than the pretty comfort, the luxury other juicy options could offer.
So the nudge – go and start something. Then SystemSpecs was born.
And 24 years on, SystemSpecs has evolved tremendously. From its accounting software franchise, it has made a mark with its own payroll system and the now famous Remita.
Remita is the platform on which the almighty Treasury Single Account (TSA) operates. It has brought fame, it has brought stress.
A FinTech that is a hallmark of transparency, accountability and a veritable tool in the crusade against corruption.
In a chat with TheNewsGuru last week, Obaro, Managing Director of SystemSpecs , the potent drive of the Remita-TSA project revealed “the journey has been interesting 24 years going”; how Remita beat local and foreign competitors for the TSA, the unnecessary controversy leading to the senate hearing and so on.
His charisma, flawless diction and perspective seamlessly take you on the FinTech journey with him and you forget IT is not simply two plus two.
And you try resisting the question: Is this our own Bill Gates in the making?
Remita is looking beyond Nigeria’s shores. Obaro sees a future of business redefined with FinTech as the nucleus. And with interest in
Remita coming from foreign lands, he is confident SystemSpecs and its local peers can go far, do well.
What brought you into the journey of SystemSpecs ?
I was in the banking industry mainly and by God’s grace I had a good career. I became head of Information Technology at a relatively young age, and I was being promoted every year or every other year.
But it got to a point where I felt my job content needed to change. So it was no longer about the money, and this was the time when a number of new banks were coming up. The Zenith, the GTBs of this world; that was about the time they came on the scene.
So I had the option of either going to look for a job in another bank or to go for a Phd, I thought of going for professional qualification,
I thought of leaving the country but I spoke to someone who encouraged me to think of setting up something. That resonated more with me and that was how I left the banking industry to start
SystemSpecs. I saw a void; most of the computer projects in those days were mainly in the banking sector and in the oil industry.
Apart from those two you probably had a few more internationals and they were doing things in IT especially software. So we knew at that point that there was need for good accounting for the cooperate world different from the banks. So we settled for a UK accounting software called Sound Systems. And then we signed an agreement to represent them here in Nigeria and then, that was our first product: ‘Sound Systems in the Nigerian Market’.
So how did you overcome the likely initial problems that came up… A young man doing well in the banking industry and venturing into a novel area?
Maybe part of it was, I don’t want to call it ignorance or naivety, but I was driven more by zeal. I mean, I just believed in what I wanted to do. I was ignorant of the possible problems so I just put in my head and look I enjoyed doing software and I believed it will succeed in whichever way. Yes coming out, there was the difficult problem of having to educate people on some things you probably just took for granted.
You go into any organisation and the first thing is that they think you are coming to take their jobs. Of course, that story has changed today.
Not many people see computers as taking over jobs. No, it is redefining jobs, it is raising the quality of jobs and you need to rise along with that.
So we had challenges of people understanding what we were trying to push and when people don’t understand what you are trying to push they reduce it to pricing discussions.
So when they don’t understand why you want to sell something for say N10, 000, they will say no you should sell it for N10. So that puts a lot more pressure on you trying to explain. It is made worse because your competitors who now bring them shallow products and they see them as possible alternatives.
Sometimes you need to allow them go get their hands burnt and then come back and we’ve had a lot of that. I mean we’ve been here for 24, going to 25 years now, so we’ve seen a number of people make mistakes and what we do, we try to remain in the sidelines such that by the time they understand the kind of things we were describing in earlier days it will be easier for them to get back to us.
So 24 years after, from Payroll System to Remita, how has it been?
An interesting journey. We actually started with a foreign product, Sound Systems which was accounting software. About a year or two down the line we saw the need for a home grown product, so we developed a payroll and human resource application which today is known as human manager. That did well.
Somewhere along the line we saw a need to automate our processes more from end to end, which was how we came about Remita. So with Remita you are able to do everything within the same suite and that today is our flagship product.
When you were in the bank, sure it was an old generation bank, how did you come about the vision of automation, computerizing processes?
I had the privilege of working at International Merchant Bank (IMB). I was hired by the person we would refer to as the guru of modern banking in Nigeria today, Ebitimi Banigo. And then, he challenged you, he was well exposed and made you to believe in yourself and that really helped me to help stabilize the computer platform at IMB in those days.
Well, like I said, after spending 7 years essentially doing the same thing, for all I cared I felt it was time to move and that really helped in coming into System Specks because for one, I knew there was a minimum standard below which I could not operate.
IMB was a very classy bank in those days, it was a bank well ahead of its time.
So it was a good privilege interacting with a number of top end people who are major drivers in the Nigerian economy of today. Knowing such people 25 to 30 years ago it couldn’t but rub off on you.
In fact, there was a time we had about 26 managing directors or ex-managing directors from that crop in IMB, so it was a very powerful group of intellectuals put together in one roof. So you have to get challenged and develop yourself.
IMB producing at least 26 managing directors but it failed, what happened?
Somebody woke up one day and suddenly realised that government had shares at IMB. Ebitimi Banigo was removed and we now had political appointees sent in to come drive the bank. In fact, it was at that time that many of the egg heads decided it was time to start leaving and the new leadership did not even think anything was wrong, so that was the beginning of the decline of IMB.
Not only IMB declined at that time, some other banks followed. Do you see this repeating itself in Nigeria of today considering the state of the economy, corruption…?
Well, now we have fewer banks, I am aware that CBN for instance has said that they will do all they can to make sure that no bank fails.
So if you look at it from that perspective, that’s not to mean that all banks will be healthy, but if the Central Bank has made a conscious decision that whatever it will take, they don’t want any bank to fail then they are in the position to throw in the resources, change in management and whatever that will be required to save any bank that will appear to be headed south.
Going back to Remita, the product that has brought so much fame, how has it been working with CBN, government?
Incidentally, it was about this time last year that we were in the middle of the storm, totally unnecessary storm, but we thank God because in all things He makes a way out.
There was some misinformation which was totally blown out, there was an allegation that a company was making 25 billion naira or some totally unrealistic figure that whipped up emotions; not many people were willing to look at the fact of the issues (I wished the N25 billion existed) but we thank God we have had some people who were able to sit down dispassionately and helped in moving towards the resolution of the problem.
We are grateful to the president, who when he understood was able to give the necessary guidance and the minister of finance, Kemi Adeosun, who took it upon herself to understand the real issues. We are grateful to the Accountant General of the Federation, Alhaji Idris, very calm man who at every opportunity clarified all that was going on.
And the Central Bank understood what was going on, unfortunately we found ourselves in what you may call a heated environment. But at the end of the day I believe maybe the truth has come out: Remita is just a platform to assist the implementation of TSA.
The contract was agreed by all the parties, incidentally they fixed the figures we did not, and after a while they said the figure was too high and then accusing fingers were being pointed at us. But like I said, we thank God, the truth has now come out.
How does this Remita system work?
Now your question, let me approach it in two parts. Remita was not designed for government. So I will answer in two parts; how Remita works generally and how it works for the government.
Remita by its very design is available to government, cooperates and individuals. But our initial focus was on corporates.
In the first place, every organisation will run its payroll and you will need to pay salaries so we created this platform that will allow you to debit your account and credit staff accounts in commercial banks or in micro-finance banks at the press of a button. That was the first thing we did.
Then the next thing was that we added vendor payments, then the last thing is what you may call collections. So we have a platform that will allow you as a corporate to define forms that if anybody who wants to make payment to you will complete online.
So you can say look anybody who wants to make a payment to me I want him to tell me his name, I want him to tell me what he or she is paying for, the quantity he requires, where he wants it delivered.
This is a very simple form which you can set up within 2 to 3 minutes.
Once you set up that form anybody who wants to make a payment to you will be required to complete that form and then we will give him options on how he can pay.
He can either take a reference number to a bank, any of the commercial banks or any of the growing number of micro finance banks. He can go there with that reference, make payment and the payment will come to you or he can use the debit or credit card or he can use the internet bank of his bank or he can use a mobile phone.
So we have these different channels by which people can make payments to the corporates. So you have a situation in which somebody or a corporate signs up to any of our platforms and then within a few minutes anybody within the country can make payments to him complete with all the necessary information.
I mean you are a newspaper house for instance, you can say look anybody who is making a payment to you, what size of advert does he want to run, how long does he want it to run for, is there any particular page, you can ask all these questions, you can design this form within a few minutes.
Immediately you put it on our website anybody within the country can make payment to you if you complete all that information they will make payment to you and you are able to monitor all of these at the back end. So generally that’s how Remita works.
Then of course when the federal government wanted to implement the TSA the challenge was that you are now going to have about a thousand MDAs and yet you need to centrally monitor what is happening in each of these MDAs.
So it goes beyond the regular payment and collection for each independent entity. You are now looking at the ability to have a bird’s overview of what’s going on. So we got into all of that, and made that happen.
The origin of it was that Central Bank as part of their functions had come in to review our licensing as a payment solutions provider. It was during the question and answer session, I mean we were making presentation and then they started asking if we could do this, if we could do that. We didn’t even know that they were having challenges.
At that point in time they had actually written to the office of the accountant general that the TSA project should be delayed for about two years to enable them source a proper solution because they had had people coming from abroad and locally but there wasn’t anything near what we had .
So when they saw what we had they called us back, invited some of the other people that they had reviewed their platforms and then took us through an evaluation process, they had their external consultancy, had the ministry of finance, and the office of the accountant general and they reviewed it and then settled for Remita. So that’s how we got into the TSA scheme.
How was the Remita-TSA initiative received by the MDAs, did you envisage some of the challenges that trailed its introduction?
At the beginning we knew there would be some resistance because we understood what the TSA project can do for the economy. What we did not envisage was the senate angle, but within the executive itself, okay, we had felt some people may not be very comfortable with the transparency that this kind of project brings to the table.
But we are just solution providers, we don’t drive policies we only provide a platform to support the policy of the government. But if I were to talk as a Nigerian and not as a solution provider, and from what I now know, honestly I know the economy is bad today but it could have been worse without TSA.
Because what TSA has done is that it has helped to bring your data before you, it helps you to even know where you are, we had a situation in which about 17,000 accounts were scattered all over the place, nobody knew what the country really had.
Some MDAs themselves did not know some of the accounts they had, because some of the signatories had left the establishments and money was still going into some of these accounts. We had situations where there are MDAs and the names of those MDAs were not known by the central government.
What TSA did was to bring all of these together in one bucket for you to now have a bird’s eye view of your cash position. Now, what you do with it is a different issue; you can now decide what you are giving each MDA, allowing them to be able to spend or not to spend; but the problem is not the policy itself, it is inevitable. In any case if you follow what the World Bank and IMF are doing in other countries you will see it, TSA is inevitable.
Just look at yourself on a lower scale, either as a company or as an individual- it is like a husband and wife, both of you running independent finances, both of you putting money in some banks and your net position, you are actually rich, but because you don’t know, you are going to the same banks to borrow money, that is what was happening to the federal government, some MDAs had money left in banks and other MDAs were going to the same banks to borrow money and pay interest rate like 15%, whereas if they had information, if they knew that they had money they will just have played among themselves without going to pay interest to an external party.
Now having taken these funds back to the central position, government is even in a position to invest part of it and get some interests rather than leaving them in commercial banks and taking loans, borrowing your own money and then paying interests on it. So there are some challenges that a central monitoring of the account has addressed.
Some MDAs are complaining that they are having operational problems, payment of salaries, to execute projects because of TSA…Is that true?
Again, I don’t want to speak for government, but I can always speak as an outsider having some overview of what is happening. Before now many of these MDAs were able to collect cash and just spend it by themselves but now there is a budgeting process. Many of them have their budgets managed by a different application called Government
Financial Information Management System (GFIMS) that is a package developed by an Estonian company, managed by the office of the Accountant General of the Federation (AGF). So for many of them that is where their budget is, their transactions have to pass through GFIMS before they come to Remita TSA, so if they have not crossed that first hurdle the request for payment does not even come toRemita.
The second thing in answer to your questions is that there is another front feeding application called IPIS.
IPIS is for the processing of salaries. Again, for all MDAs, their salaries are supposed to be processed from IPIS before it is passed down to Remita for processing, so these are the two feeder systems. If you have not sorted out yourself in those two areas, you will be jumping the gun to expect a transaction in Remita. So we receive transactions directly from these two feeder areas.
However, there some MDAs that are exempted from IPIS and GFIMS, they stand on their own and we deal directly with these ones, and for such I am not aware that there are problems because everything is totally within their own control.
They initiate all their transactions themselves, they probably have maybe three of four levels approval totally within their system, they initiate transactions, do all their approvals and monitor all collections coming directly to them and all of that is working fine.
That is exceptions are granted some MDAs, they run their own show?
There are guidelines; there are different classifications which were set up by the office of the Accountant General and eventually by the Head of Service that classified the different MDAs, depending on their operations. For instance, I am aware that the Nigerian National Petroleum Corporation (NNPC) deals directly, whereas a typical ministry will go through the office of the accountant general.
TSA-Remita is one of the items the Buhari administration flaunts as an achievement. How has it helped in the war against corruption?
You know corruption thrives in an environment of secrecy, where people believe they can do anything and get away with it.
But when people know that whatever they are doing can come under the searchlight very easily, that in itself that becomes a major deterrent that helps to put some sanity into the system. What Remita has done is that all transactions going into and coming out of government coffers are easily accessible to relevant officials. Plus it has become very easy to trace the movement of funds, therefore that itself has become a veritable deterrent. So you have information of what you have.
Incidentally, I am aware of a particular university, there was some demonstration at the beginning that they did not know they had this much money, that the leadership was keeping the money in some secret account, but when TSA brought everything to the fore, the union was able to say so what is the story they have been telling us?
The mere fact that the information becomes available, that this what is available to each MDA, that can be accessible, is a major step towards the fight against corruption.
Are you thinking of going to West Africa, Africa with Remita… what are your expansion plans?
That is one of our major objectives for 2017. We have had some setback, and we thought we would have moved faster than this, but we lost about one year to distraction, trying to stabilize ourselves because of the crisis that happened last year. But by God’s grace we are finding our feet now and positioning to move at the pace we believe we should move.
There are still quite some potential in the Nigerian market. Because I said, our focus is not really on government, we are looking more at corporates, individuals, and we are coming up with the mobile app version of Remita which will make it more accessible to individuals for instance, to be able to send monies to family and friends, pay their bills without necessarily going into a banking hall.
These are some of the things we intend to deepen especially in 2017 and like you said move not just into West African countries but to a number of other countries that have indicated a possible interest.
What is the worth of the TSA?
I don’t think it is appropriate for me to disclose that, I will suggest that you speak with the custodian of that information. In any case, funds come into the TSA and leave. Sometimes I hear figures of what has come in, through the platform, and then you get the impression that is the sitting balance in that account. No! That is not. Funds come in and leave just like your regular bank account. You may want to speak to the office of the accountant general, he will oblige you such information.
Some MDAs still flout the TSA regulation, they prefer to collect cash directly and thereby avoid the platform, like running a parallel system?
Again these are issues you probably want to pick with the office of the accountant general, I know they have tried their best to ensure compliance, but I am not sure what the level of the compliance is right now.
But yes! We still have some pockets of MDAs that are doing things outside the TSA, but like I said, our own job is to provide the platform, how the government uses it is not within our control.
How do we globalize SystemSpecs and other companies like yours to generate foreign exchange ?
Incidentally, I think it was about this time the other week that KPMG ran a very successful financial technology (Fintech) programme which brought in people from outside the country, possible investors.
Quite a number of people are showing interest in the Nigerian landscape. I have seen the potentials both in terms of the market and talents that are available here.
Nigeria has an opportunity to make a major statement on the world landscape in this area, we have some successful companies, some startups that are very promising, and if all of these are supported, Nigeria will go places.
Unfortunately, we had the distraction of the senate hearing, which in other climes a solution like this will be celebrated by the country and promoted, but we were doing everything to suppress, fighting over what we should be pushing out. But if this same kind of solution had come from outside, all of us will be struggling to take photographs with some young boys visiting Nigeria. But it is never too late, 2017 will be a very interesting year, we get all sorts of mails from foreign companies that want to do things in Nigeria, I believe 2017 will be an interesting year to watch
You work with the FG, what of the states?
We work for a few states, and then we have some presentations. Hopefully before the end of the year, we will get results, which is part of why I said 2017 will be an interesting year to watch.
Will you want to list those states?
As much as possible, you will want your clients to be comfortable with some information. I would rather it comes from them than from us, we service quite a number of clients, some of them will explicitly say
“Don’t mention our names”, for understandable reasons like, security, business strategy.
You are about the leader in the industry now, where do you see yourself in two, three years?
We see a future, business being redefined and Fin Tech, we be at the centre of it. I tell people, when mobile phones first came, many people thought it was a mobile phone, then they later realized it was a calculator. So the people who were manufacturing calculators knew they had a new competitor, then it became a photo copier, people manufacturing photo-copying machines suddenly realized this was a competitor, it carries a clock, an alarm and many of our teenagers today do not bother to wear wrist watches.
It has so many features-notes, people who print dairies usually this time of the year suddenly find a new competitor. So you just find that when this thing came, it came in subtly, but it eventually challenged so many industries, that is the kind of things that will happen with Fin Tech.
Because payment is at the base of just about all industries, so you find some kind of integration and alignments that would begin to question some industries, insurance, banking, especially the service industries, you will find that the services that they are providing, if they can be readily provided via a mobile phone, they may need to have a re-look of their strategies and work structures. So we intend to partner with a number of these industries to see how we can move things forward to have a win-win situation.
How are you recreating yourself after 24 years of SystemSpecs?
When you come out, you are in a better position to do more things. So I’ve been doing more things here. Getting bored is really not a part of it because new things happen every day especially in IT.
Incidentally, a few days ago Alibaba is introducing Virtual Reality for your shopping which is going to be a totally new experience which gives credence to my earlier assertion that technology will redefine a lot of things. With virtual reality, you don’t need to physically go into a shop. It will look like you are in the shop.
You are watching your screen as if you are moving round in the shop; you are picking things on the shelf.
So people building huge malls, may suddenly find that human beings no longer want to physically visit because they can have just about the same experience sitting in their homes.
Such new things happen every day. Robots are coming in big time. So I don’t see my time being bored. Having said that we’ve had some very smart people coming to the SystemSpecs. Today, they are practically running the show. I see a situation where in the not too distant future, I want them to be the ones working while I watch from the back.
Watch full video of this interview.
