Mazi Nnamdi Okwuadigbo , the 55th President of the Institute of Chartered Accountants of Nigeria (ICAN), in this encounter, with SEYI TAIWO-OGUNTUASE , explained the need for government to vigorously be committed to improve local content and invest in infrastructural development that would spur local production as well as improve the potentials for export, among other salient issues. Excerpts:
What is your view on the current economic situation in the country?
Let me first acknowledge that we have recorded some progresses as a nation in recent time.
The Economic Recovery and Growth Plan (ERGP) is a laudable initiative that is been pursued vigorously by this administration.
The Central Bank of Nigeria has also been able to sustain downward trend in inflation rate to about 11.40 percent in May 2019 compared to 12.09 percent in the corresponding month in 2018.
Even though, the May 2019 figure was a slight increase from the 11.37 per cent in the preceding month of April, 2019, the exchange rate in the parallel market has also been stable at about N360 to a dollar.
This has reduced the volatility in the market that usually impact negatively on investors’ decision.
Government is also intensifying efforts at improving the country’s business environment through the Presidential Enabling Business Environment Council.
A number of Executive Orders have been signed in this respect. The Executive Orders focused on the promotion of transparency and efficiency in the business environment designed to facilitate the ease of doing business in the country; timely submission of annual budgetary estimates by all statutory and non-statutory agencies, including companies owned by the Federal Government; and support for local contents in public procurement by the Federal Government.
What is your take on the present state of the economy?
There are still many areas for improvement in order to have a smooth running economic environment.
Fortunately, there are a lot of untapped potentials within the economy that require strategic steps at harnessing their benefits, the human capital base, the large arable land, the expanse of water and mineral resources dotting most states in the country.
All these have been either underutilised or greatly mismanaged over the years.
The country is still a far cry from creating the enabling environment that promotes good standard of living and equal opportunities for all its citizens. Our large population can be an advantage if properly harnessed but it can also constitute serious drag to growth and development if mismanaged.
Most importantly is the inexplicable delay in the nation’s annual budget; a critical fiscal document that defines the direction for any year. For instance, the budget 2018 was passed after 171 days, the longest in Nigeria’s history!
The 2019 budget was signed in May. This has material implications not only on governments’ fiscal management but stakeholders in the private sector and foreign investors would also bear the brunt of the delay.
Hence, the economy as a whole suffers. We hope as an Institute that there would be a more friendly relationship between the executive arm of government and the 9th National Assembly.
Other economic indicators are also at low ebb. The recent figure on unemployment rate in the country shows that it increased to 23.10 per cent in the third quarter of 2018 from 22.70 per cent in the second quarter of 2018.
This compares poorly with countries like Ghana that averages about 3 per cent, 9 per cent in Egypt and 12 per cent in Kenya. Nigeria however, fared better than South Africa with unemployment rate as high as 27 per cent.
This point to the need for us as a nation to tighten our seatbelt, take drastic and decisive steps at improving our economic and social fortunes.
How do you see the retained Monetary Policy Rate at 13.5 per cent?
As you are aware, there is always this macroeconomic dilemma between the need to stimulate growth that led to low employment generation, and control of inflation by monetary authorities in any economy.
The fundamentals of each economy would determine which of these macroeconomic indices should be pursued, as achieving the duo simultaneously is difficult if not an impossible task.
Of course, it should not be surprising that the Monetary Policy Committee at its meeting of July, 2019 retained the MPR at 13.5 per cent when you view it against the backdrop of the CBN’s inflation target rate of between 6 to 9 per cent.
Essentially, MPR is used to control the amount of money in circulation. Presently, inflation rate hovers around 11 per cent.
As an Institute, we imagine that it is time to proactively develop strategies for addressing the worrying unemployment rate in the country as well as strengthen the growth achieved so far.
While there are various options to achieving this, MPR is undoubtedly a strategic monetary policy tool for increasing money supply which eventually aids employment generation and growth in any economy.
Hence, we believe that it is time the MPR was further reduced in order to provide the necessary incentive for productive activities in the real sector of the economy.
What is your view about the Federal Government approach to fighting corruption?
The current fight against corruption has created a great awareness on the minds of the citizens on the grave implications of corruption in the country.
However, the current efforts at stamping corruption out of the Nigerian system must be deepened to ensure that the country’s collective resources are not enjoyed by only the “privileged” few.
The total independence of the corruption-fighting agencies in the country, like EFCC, ICPC, is no longer negotiable. These agencies of government should also deepen their collaboration with stakeholders in the private sector to give the required boost to the current achievements.
In your view why do you think corruption still thrives in the country? And what can be done to ameliorate it?
The country requires strong legal actions against anyone found culpable of corrupt practices. When there are no stringent penalties for corruption to discourage and serve as a deterrent, then it would be business as usual.
The long delay in adjudication of corruption cases may also be another impetus for the high rate of corruption in the economy.
There should be no sacred cows and no citizen should be above the law when it comes to fighting corruption.
The effects of corruption can only be imagined. It is a cankerworm that eats deep into all the fabrics of any economy; social, political, economic and even environmental.
Unfortunately, the country has dealt with corruption for decades with kid glove. We now need to be more resolute and determined with the present government’s efforts.
In what ways can ICAN members or certified accountants assist the country in the fight against corruption?
As an Institute, we are consistently committed to working with other stakeholders at addressing the problem of corruption in our country.
On our part we have deployed several machineries to contribute to the current fight. As you are aware, we have launched the maiden report of the ICAN Accountability Index (ICAN AI).
The ICAN-AI is an initiative for improving public sector financial management at the three tiers of government. The objectives of the ICAN AI among others include encouraging fiscal responsibility and good public finance management, tackling corruption by engaging quality professionals in the public sector and providing a holistic, objective and evidenced-based framework for assessing performance of public sector entities.
In addition to these, we have in place our Whistleblower Fund since 2015 to support and compensate our members who report any form of financial misdemeanor in both the public and private sectors of the economy. Our disciplinary machineries are also very strong to mete out appropriate punishment on any erring member. The accounting profession is so central to fighting corruption that we cannot allow professionals to be part of this social malady. Over the years, we have de-registered some members found guilty of gross professional misconduct.
We are encouraging our members to comply with the Non-Compliance with Law And Regulations (NOCLAR) signed into by ICAN in 2017.
The standard, which is a new section in the Code of Ethics for Professional Accountants, sets out a first-of-its-kind framework to guide professional accountants in what actions to take in the public interest when they become aware of a potential illegal act.
We continue to create the needed awareness through advocacy on the impact of corruption in the society. We deploy different channels at achieving this.
Last year ICAN made some recommendations to the Financial Reporting Council of Nigeria (FRC) on the 2018 Nigerian Code of Corporate Governance has any of the recommendations been implemented?
I am happy that you raised the issue of our contributions as an Institute to the 2018 Nigerian Code of Corporate Governance.
I must commend the Financial Reporting Council of Nigeria (FRC) for engaging a broad spectrum of stakeholders in the development of the new Code. Of course we raised a number of issues and made recommendations to FRC.
Some of our recommendations were incorporated in the new Code and we would further engage with FRC at ensuring that the country constantly update the Code to keep pace with emerging trends.
This is with the sole of objective of creating an enabling corporate environment to attract the much-needed Foreign Direct Investment (FDI) into the country.
In over five decades ICAN has engaged in the training of human capital. Are you satisfied with what you have seen, if not what are the strategies you hope to adopt as the Institute’s President to improve?
Without being presumptuous, ICAN has performed creditably well in building capacity for the accounting sector of the Nigerian economy.
Our members are occupying very strategic positions in both the public and private sectors of the economy as trusted advisers and administrators.
It is also important to place on record that from the 250 members that started the Institute in 1965, ICAN has produced over 48,000 Chartered Accountants, 24,000 Accounting Technicians and over 250,000 students.
Our members have been equipped with skills in the different areas of accounting such as Audit, Investigations and Forensic Accounting; Taxation and Fiscal Policy Management; Consultancy and Information Technology; Insolvency and Corporate Re-engineering; Public Finance Management; Corporate Finance Management and Financial Reporting.
In fact, let me add that our capacity building initiatives extend beyond the shores of the country as we have and currently mentoring other Professional Accounting Organisations (PAOs) in Africa. These include The Gambia Institute of Chartered Accountants, the Institute in Sierra Leone, The Liberian Institute of Certified Public Accountant (LICPA) among others.
As a founding member of the International Federation of Accountants (IFAC), ICAN continues to play its leadership role in the Pan African Federation of Accountants (PAFA) and the Association of Accounting Bodies in West Africa (ABWA).
As the largest room in the world is the room for improvement, this Presidential Year would not just sustain the lofty capacity building initiatives of past administrations but we would develop more innovative strategies to democratise skills development programmes for our members. Hence, in this Presidential Year, capacity building would continue to be a strategy in the scheme of events.
How would you assess the accountancy profession in Nigeria in terms of skill development?
The accounting profession in Nigeria has gone a long way. I would assess the level of skill development in the profession as satisfactory.
ICAN has over the years kept faith with its establishing Act of Parliament No 15 of 1965 to determine what standards of knowledge and skill are to be attained by persons seeking to become members of the accountancy profession and to raise those standards from time to time as circumstances may permit.
We have upheld this mandate through various skills development initiatives. Our Mandatory Continuing Professional Education (MCPE) programmes are regularly updated to be in tune with current and emerging realities in the profession. Being a highly dynamic profession, skill development in the profession should be a continuous process and members should imbibe the culture of life-long learning.
What is the role of ICAN in governance in the country?
While ICAN is an apolitical organisation, we collaborate with different arms of government at building a strong governance infrastructure for the country.
We engage regularly with politicians, technocrats and regulators where we present our stances on topical subjects concerning governance and the economy as a whole.
We organise various knowledge events where topical issues are discussed and recommendations emanating from these programmes disseminated to appropriate government agencies.
In your view, what will you say about the performance of government in the last 365 days and what will ICAN expect the government to do to revive the economy?
The government has done well in recording a budget performance of 67 per cent. Furthermore, the government’s approach on infrastructure was a logical one as it simply prioritised the completion of critical on-going projects over the introduction of new ones.
As an Institute, we will expect the government to increase the budget performance to at least 75 per cent for economic revival and overall good of Nigerians.
What would you want to be remembered for after office?
At the end of this tenure, we would have deepened the achievements of past leaderships of the Institute and bequeath an ICAN that would be more nationally relevant and internationally recognised.
This administration would build a strong capacity-building framework to enable our members compete favourably across the globe.
ICAN would also be a regular voice on topical social and economic issues
What is your opinion on the efforts by Federal Inland Revenue Service (FIRS) at making defaulter billionaires pay their taxes?
This will aid income redistribution. While we advocate, as an Institute, that the tax net should be spread across all economic cadres, the success achieved by FIRS in 2018 would be strengthened if efforts at ensuring tax compliance by defaulting billionaires are sustained.
Let me quickly add that efforts by FIRS at making defaulter billionaires pay their taxes should be strategic as these billionaires also have the political and economic powers to sabotage the Service’s attempts at ensuring their compliance.
Hence, success in this regard by the FIRS would require innovative tax collection, incentives for tax payment and moral persuasion, if necessary.
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