Lagos State Governor Babajide Sanwo-Olu has crushed opposition to the imposition of a revenue collector, Payment Technology Limited (PAYTECH), on the state’s tertiary institutions as the schools have all enrolled on the platform.
But the company will now take only seven per cent of the schools’ revenues as commission, instead of the 10 per cent it demanded. The agreement has been signed by the schools in spite of the clear violation of the state’s procurement law.
The government has argued that it needs such a firm to bring transparency to – and maximise the opportunities in – the collection of the internal revenue generated by the institutions.
The development is similar to the adoption of Alpha Beta Consulting LLP as Lagos State’s tax consultant since 1999. The private tax consulting firm, which is linked to a former governor of the state, Bola Tinubu, has faced a series of corruption allegations, including tax evasion.
The management of the Lagos institutions and the education committee of the state’s House of Assembly had earlier kicked against PAYTECH, describing it as exploitative.
When contacted, the governor’s spokesperson, Gboyega Akosile, said he had nothing new to say on the issue.
However, the special adviser to Mr Sanwo-Olu on education, Tokunbo Wahab, had told PREMIUM TIMES on many occasions that the government introduced the platform to allow stakeholders to monitor the revenues of the institutions real-time.
But Mr Wahab refused to speak on the seemingly huge commission to be pocketed by the private company and the violation of the state’s procurement laws in the selection of the company.
How it all started
PREMIUM TIMES exclusively reported how shortly after Mr Sanwo-Olu took office in 2019, the fintech firm, which currently has no client on the proposed innovation, submitted a proposal to serve as the payment platform for tertiary schools in the state.
It proposed to charge 10 per cent on each transaction made on the platform, promising that its payment information system application would ensure increased revenue for the institutions.
However, the management of the institutions kicked against the proposal and many of them failed to meet the various deadlines set by the governor for enrollment as contained in a series of correspondences by Mr Wahab to the schools.
In one of the letters dated September 8, the schools were directed to forward the signed agreement with the company to the government on or before September 11.
“As you may recall, Payment Technology Limited (PAYTECH) has been appointed as the consultant on revenue collection automation within the Lagos tertiary institutions and shall deploy a management information system (MIS) that will facilitate the automation and independent e-monitoring of revenue collection that will promote accountability, transparency, and integrity, thus boost internally generated revenue (IGR),” the letter read.
However, following the failure of the institutions to comply, Mr Wahab sent them another letter of September 21, titled; “Re: Lagos State Tertiary Institution Revenue Collection.” The new letter was copied to the commissioner for economic planning and budget, and establishment, training and pensions.
“Full automation of your internally generated revenue with PAYTECH should commence latest by the same date, 30th September, 2020,” the letter stated.
The letter said failure to comply with the directive “shall attract stiff sanctions.”
Many of the institutions still did not comply.
Sanwo-Olu wades in
Worried by the schools’ opposition to the idea and the accompanying growing animosity between Mr Wahab and some lawmakers who had taken the side of the institutions, Mr Sanwo-Olu decided to intervene.
Findings by PREMIUM TIMES revealed that the governor decided to “speak” to the leadership of the parliament and the chairmen of the various governing boards of the affected institutions.
“Take my words but please don’t quote me. This matter is highly sensitive because the governor, in a very disappointing way, has come to the open to confirm he is behind the idea,” a source at the state house of assembly told our correspondent. The source demanded anonymity to avoid drawing a backlash.
More sources in two of the schools also confirmed the development, saying everyone was surprised that the governor decided to go ahead with the PAYTECH proposal, in spite of recent developments.
The sources were referring to recent scandals involving Alpha Beta, the state’s tax consultant.
One of the sources, who spoke to our reporter on the phone but asked not to be named, said: “You know, initially, the special adviser on education had been dropping the governor’s name to harass and bully everyone on the project. Very few of us believed him. But when the masquerade eventually unveiled himself with strange phone calls to those that were regarded as opposition to the project, then we became dumbfounded.”
Schools confirmed enrolment
The provost of Adeniran Ogunsanya College of Education (AOCOED), Ijanikin, Idowu Okuneye, confirmed that her institution has enrolled on the platform.
In her response to this newspaper’s inquiry, Mrs Okuneye, a professor of education, said via a short message that; “Yes we have enrolled. Thanks.”
But PREMIUM TIMES has since learnt that instead of the 10 per cent commission proposed by the company, the new agreement pegs it to seven per cent.
The chairman of the governing council of the Lagos State Polytechnic (LASPOTECH), Ikorodu, Rasheed Ojikutu, also confirmed the development.
Mr Ojikutu, a professor of statistics at the University of Lagos (UNILAG), Akoka, said the agreement stipulates a review after three months to determine whether to continue with the company or not.
On the violation of the procurement law, Mr Ojikutu simply asked our reporter to get a copy of the agreement before criticising it.
“We know you are doing your work, which is very good because you are the conscience of the society. But about five of us representing different institutions sat with the SAE to review the proposal, and I think you should be able to trust our judgement,” Mr Ojikutu told our reporter on the phone.
At the Lagos State University (LASU), its head of the centre for information, press and public relations (CIPPR), Ojo, Ademola Adekoya, confirmed that the institution has enrolled on the platform.
Mr Adekoya said as employees of government, the university officials obey the government’s instructions.
“The university is owned by the government and the governor is the Visitor. So by law, we are bound to obey the government’s instructions,” he said.
Financial windfalls to be enjoyed by PAYTECH
With the enrollment of all the state-owned tertiary institutions, PAYTECH will enjoy a financial windfall from the institutions’ revenues.
New revenue streams, separate from the usual high-fee-paying programmes such as distance learning programmes, sandwiches, pre-degree and degree programmes, run by the state-owned institutions, include LASU’s land regularisation charges, hostel project and LASPOTECH’s new consultancy initiatives.
For instance, one source said, LASU is expected to generate as much as N8 billion from its land regularisation policy, which involved the payment of N1.25 million per plot as regularisation fee to the university by at least 8,000 households who encroached on the university’s land at its main campus in Ojo.
In 2018, the encroachers agreed to pay the sum to the university after the state threatened to evict them from the land. Upon payment of the regularisation fee, the state government will award them certificates of occupancy (C of O).
That means PAYTECH stands to make about seven per cent of this sum, over N500 million, from LASU’s land regularisation charges alone.
A tradition of imposing revenue-collecting “consultants”
The imposition of PAYTECH as a revenue-collecting consultant on Lagos tertiary schools follows a tradition of successive administrations in the state imposing revenue-collecting firms, which take mouth-watering consultation fees.
The state’s primary tax consultant, Alpha-Beta, was recently accused of fraud and tax-evasion by one of its former leaders.
The immediate past governor of the state, Akinwunmi Ambode, also introduced Visionscape Sanitation Solutions, a relatively new company, to take over the refuse collection in the state from the various private individuals who had partnered the Lagos State Waste Management Agency (LAWMA) to execute the task.
The deal ended in a fiasco as Visionscape struggled to collect waste around the state on time, leaving the city in a mess of refuse.
The uproar and bickering that accompanied the initiative contributed significantly to Mr Ambode’s ouster after his first term in office.
Government keeps mum
The government has refused further comment on the development, saying enough explanation had been given already.
Mr Wahab told PREMIUM TIMES he would not speak further on the matter, alleging that this newspaper’s report on the subject had been full of inaccuracies.
“But I wouldn’t talk on this anymore,” he wrote in a WhatsApp message sent to our reporter.
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