Globally, industries are regulated to some extent and Nigeria is not an exemption. One may want to ask who is a regulator. The Oxford Dictionary (7th Edition) says that a regulator is a person or an organization that officially controls an area of business or industry and makes sure that it is operating fairly. They are also to enforce standards required in businesses and protect consumers as well as investors. Regulators are supervisory bodies watching over the activities of firms in Nigeria’s industry. Regrettably, most of the regulators are not effective. Why you may ask? Officially, they are regulated from above by established political process. Unfortunately, the political process is so ineffective at regulating regulators that they essentially become unregulated.
The situation is so bad that the regulated is now regulating the regulator. If this is not true, what has the National Insurance Commission (NAICOM) done to ensure that insurance companies do not default on payments of life premium when due? I know two “big” insurance companies that have not paid premium due on life assurance and non-life insurance customers promptly to some of their customers since 2017.
In fact, I was fortunate to collect the balance of my life assurance premium from one of these companies using my twitter account, and the timely intervention of a popular TV station after telephone drills and visits to the headquarters of the insurance company for few months. My tactics aside, I was almost “technically” defeated by the insurance company. Thank goodness for the “recovery strategy” applied to collect my money.
With a life assurance policy, I thought erroneously, that I was preparing myself for retirement after serving my country for almost 35 years. What I got was a very good dose of embarrassment. NAICOM knows insurance companies that are unable to pay their clients promptly. What is NAICOM doing about these challenges in the insurance sector?
The banks are operating their own show in their respective kingdoms. What measures has the Central Bank of Nigeria (CBN) taken to ensure that charges paid by customers to banks are controlled? A friend told me: “This is business, don’t complain.” “Why shouldn’t I complain?”Or is the CBN a toothless regulator unable to control the excesses of banks under its jurisdiction? It is no news that within the first quarter of 2019, Nigerians have already paid billions of Naira as account maintenance and stamp duty charges to banks in our dear country. Since the CBN says customers should report cases of exorbitant charges by banks, I am reporting my displeasure in this article.
The CBN as a regulator has to convince customers why the “neck shave”given by banks to clients on a daily basis is necessary. At times, one wonders if it is a crime to save money in the bank. Yet, banks are waiting for 80 percent financial inclusion by 2020. The CBN has revised its National Financial Inclusion Strategy (NFIS) with a major objective of promoting a financial system that is accessible to all Nigerian adults at an inclusion rate of 80 percent. But can the CBN ensure good implementation of NFIS?
What about the Federal Inland Revenue Service (FIRS)? FIRS is waiting for companies to pay tax. I am of the opinion that tax paid must be properly utilised for the benefit of the citizens. With tax, transparency and accountability must be the watchwords of those organizations that are charged by law to collect and manage tax payers’ monies. Since the early part of the year 2019, FIRS has placed stoppage on the accounts of companies that have not paid their taxes or those whose tax remittances have been queried.
The restriction has not been lifted on many of these accounts because the FIRS computer system is down. Most entrepreneurs affected are waiting for the FIRS computer system to work so that they can pay their taxes and have access to their cash. What has disabled the FIRS from ensuring that its computer system is functional?
As I was searching for answers to said questions, the SEC released a report of its investigations into the operations of Oando Plc. This investigation, according to SEC, took almost two years to conclude. The findings as alleged “revealed serious infractions such as false disclosures, market abuses, misstatements in financial statements, internal control failures, and corporate governance lapses stemming from poor board oversight, irregular approval of directors’ remuneration, unjustified disbursements to directors and management of the company, related party transactions not conducted at arm’s length, amongst others.” So SEC has gone ahead to constitute an interim management team to oversee the affairs of OandoPlc because the Group CEO, directors and other affected board members have been sacked and barred from being directors of public quoted companies for the next five years.
As usual, Oando Plc has secured a court order restraining SEC. The board and management of Oando Plc deserves fair hearing. But this is an issue that cannot be swept under the carpet with the All Progressives Congress’s broom. In Nigeria, we have always focused our attention on corruption in the public sector without beaming our searchlight on some “corporate boys” who play the “Chop-I-Chop” game with other people’s money. Whatever happens in Oando and other publicly-quoted firms is of public interest. This is another failure of corporate governance.
Let us not deceive ourselves, the private sector cannot be absolved of any blame when it comes to corruption in Nigeria. The issue of concern is that there is too much impunity in the corporate environment in Nigeria. Under protection and cover by influential politicians who are to carry out oversight functions of these regulators, some “corporate boys” display arrogance and behave as though they are above the law of the country. As long as those who mismanage publicly-quoted firms go unpunished, there will be no accountability in Nigeria’s private sector. From the foregoing, I align myself with views expressed by a scholar that:
“Regulators being government-granted monopolies with a captive “client” base are unregulated. There is no robust regulation of their performance. There is no quality-assurance regulation of the job these regulators do. They are not accountable to the public in a meaningful way. In theory, agencies are regulated by the political process, but the political process is so ineffective at regulating the regulators that the regulators are de facto unregulated.”
In order to eradicate corruption and improve ease of doing business in Nigeria, state and federal lawmakers need to do more in their oversight functions over public and private sectors instead of struggling with state governors and Mr President over mundane political issues. Many of the extant regulations governing the actions of regulators are archaic and will require a thorough and immediate review.Over to you members of the 9th Assembly. Thank you!
MA Johnson
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