The Lagos Chamber of Commerce and Industry (LCCI) has called for improved direct and effective engagements between Small and Medium Enterprises (SMEs) and regulatory agencies for enhanced transactions, communication and responsive feedback mechanisms.
Muda Yusuf, Director-General, LCCI, made this known in a public statement following a study by the Chamber and the Center for International Private Enterprise (CIPE).
Yusuf said the study was administered on business owners, senior managers and personnel responsible for interfacing with the regulatory agencies in three cities- Aba, Kano and Lagos due to their high concentration of SMEs.
The study which is titled “Transactional Accountability, Process Consistency and Operational Transparency” focused on the Federal Inland Revenue Service (FIRS) and the National Agency for Food and Drugs Administration and Control (NAFDAC) as critical and strategic regulatory agencies.
“In spite of appreciable efforts by the agencies to ensure that engagement and interface occur directly with businesses seeking their services, more than 80 percent of SMEs engage the regulatory agencies through consultants and intermediaries.
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“The use of intermediaries and consultants by SMEs to facilitate transactions is pervasive and the cost of procuring services and products from regulatory agencies affect the bottom-line and general performance of SMEs,” he said.
Yusuf said the study revealed the need for ease of access to information for SMEs to address gaps between officials of regulatory agencies and owners/managers of SMEs businesses in the engagement process.
This, he said, would eliminate all forms of revenue leakages and transparency issues in their procedures and operations translating to improved outcomes for both the SMEs and the regulatory agencies.
“Regulatory agencies put in place internal service complaints structure for addressing cases of service dissatisfaction through official procedures and civil service rules, coordinated by SERVICOM Department at the Head Offices,
Unfortunately, these mechanisms were unpopular among SMEs as only 4.6 percent of SMEs were aware of grievance redress mechanisms. Even those that are aware rarely use it due to lengthy procedures for seeking redress and also for fear of reprisals by the officials of the agencies,” He explained
He noted that the study also revealed the importance of the full adoption of technology by the Ministries, Departments, and Agencies (MDAs) to drive efficiency and ensure transparency.
“Poor deployment and inadequate use of information technology, ineffective grievance redress mechanism and non-standard approaches created opportunities for transactional accountability breaches
Hence, there are inconsistencies in time, cost and processes of getting services from regulatory agencies which allow making extra receipted/informal payment by SMEs to officials,” he said.
The LCCI DG, however, stated that the study found that the management of NAFDAC and FIRS had made laudable efforts to increase accountability and transparency in carrying out their day-to-day statutory regulatory activities.
NAFDAC designed a three-pronged approach to achieving transparency in conducting regulatory activities with emphasis on understanding and avoiding transactional corruption.
The three-pronged approach is anchored on increased sensitization & capacity development of SMEs, staff re-orientation and deepening IT engagement platform, the agency has set up a plan to monitor its implementation and assess outcomes regularly.
Similarly, the FIRS established a seamless service procurement mechanism for the benefit of its taxpayers/customers and to promote efficient service delivery performance as well as improve the ease of doing business.
Yusuf reiterated that improved engagement and collaboration between both parties will stimulate significant improvement in the operating environment for SMEs, and particularly make them more competitive especially in consideration of the operationalization of the African Continental Free Trade Area (AfCFTA).
