Here we are in Abuja for the 50th Annual Accountants Conference of The Institute of Chartered Accountants of Nigeria [ICAN] which is scheduled to run from April 5th to April 9th, 2021. In our midst is the President of the International Federation of Accountants, Mr Alan Johnson.
50 is a magic number. The President of The Institute of Chartered Accountants in England and Wales [ICAEW], Mr David Matthews (Ex-KPMG) has sent me the following message:
“From our records, you have been a member of our Institute for over fifty years. Congratulations.”
Hence, it is tempting to reflect on the year 2003/2004 which for me was epochal as it was my privilege and honour, as Chief Host and President of the Institute of Chartered Accountants of Nigeria, to preside over the 33rd Annual Accountants Conference, in Abuja.
On that auspicious occasion, the Guest of Honour was the President of Nigeria, Chief Olusegun Obasanjo GCFR. He had the option of sending a representative but I remain grateful to him for the honour he accorded the Institute by declaring the conference open himself. To his eternal credit, he arrived right on time and proceeded to deliver an excellent but pungent address that did not pull any punches. His message was clear – Chartered Accountants had in his view not lived up to expectations!
Indeed, when a delegation of Past Presidents of the Institute of Chartered Accountants of Nigeria paid him a courtesy call at the Presidential Villa he caused panic when he bluntly demanded:
“Where is the money?”
He was referring to cases where Chartered Accountants were alleged to have been involved in corruption and looting of the treasury.
Perhaps I should add that even before then, Prince (Justice) Ambassador Bola Ajibola SAN a very close friend of President Obasanjo (they both attended Baptist Boys High School, Abeokuta) while serving as the Minister of Justice and Attorney-General of the Federation (from 1985 to 1991) under General Ibrahim Babangida had publicly accused chartered accountants of duplicitously signing two different sets of accounts for their clients in order to assist them to evade taxation or whatever. The solution he came up with was that reports of the Auditors should be countersigned by his professional colleagues – lawyers !!
No wonder that in “Merchant of Venice” William Shakespeare delivered a dire exhortation:
“First let’s kill all the lawyers.”
Anyway, going back to 2003/2004 the stock and reputation of Chartered Accountants were under a cloud. When the searchlight was beamed on us we had no option but to robustly defend our integrity. It is for others to judge whether we succeeded entirely or failed woefully.
As matters stand, our primacy in the management and regulation of the accountancy profession are under threat not only by the Association of National Accountants of Nigeria [ANAN] who have been competing with us since they obtained recognition by the Federal Government of Nigeria in 2010 and are also members of the International Federation of Accountants [IFAC], we also have unresolved issues with the Chartered Institute of Taxation of Nigeria regarding whether members of our Institute can offer services/consultancy on tax matters unless they are registered with the Nigerian Institute of Taxation.
We are also under attack from those who are determined to balkanize our profession by creating separate bodies for Forensic Accounting; Public Accounts; Local Government Accounts; Receivership and Liquidations, etc.
I must quickly add that I have no personal issues with whoever is pursuing such an agenda.
In a democracy, which is what our nation proffers to be, freedom of association is guaranteed under the Constitution. Indeed, it is a cardinal principle in the exercise of fundamental human rights.
What is required is for Chartered Accountants to be extra vigilant in the pursuit of professional excellence and impregnable ethics as well as robust defence of our integrity.
Indeed, it is most gratifying that amongst the speakers at this year’s conference is Mr Mohammed Mani, Executive Chairman of Federal Inland Revenue Service. The last time we checked, he did not appear to be a member of the Institute of Chartered Accountants of Nigeria [ICAN].
I understand he is a Fellow of the Association of National Accountants of Nigeria. Of course, he is most welcome. Sentiments and prejudice are not to be confused with reality, realism and pragmatism.
Perhaps it is too late in the day to begin to wail and lament that the commanding heights of our nation’s financial landscape and economic system which used to be the exclusive preserve of Chartered Accountants have steadily crumbled due to heavy artillery (under at first the military government and subsequently by the civilian government) are now occupied by those of other ilks.
In 2003/2004 our fellow Chartered Accountants held the following positions (and I stand to be corrected):
- Minister of Finance
- Auditor-General of The Federation
- Chairman, Federal Inland Revenue Service
- Accountant-General of The Federation
- Governor of The Central Bank of Nigeria
- And others too many to be counted.
The pattern was also replicated in the thirty-six states of the Federation and the Federal Capital Territory, Abuja.
Indeed, some of you may recall that both the late Past President of ICAN, Chief Oluwole Adeosun, and I mounted the stage and at my prompting, he conceded that perhaps he was being overloaded as Minister of Transport, Aviation and Communications, all at the same time !!
Perhaps I should have made my own confession that I was at the age of nearly sixty combining being President of the Institute of Chartered Accountants of Nigeria with being the Chairman and Chief Executive of KPMG Nigeria in addition to being the Chairman of KPMG Africa. I was also a member of the International Council of KPMG and a member of the Committee of Accountants in Business of the International Federation of Accountants.
Some of you may also be aware that I have been a newspaper columnist for fifty years in addition to writing thirty books of which probably the best known is “THE GODFATHER NEVER SLEEPS.”
I am not sure that all these are a match for the pace set by my late father, Chief J.K. Randle who held probably the three most important positions in Lagos – Lisa of Lagos (Prime Minister); Chairman Lagos Island Club; and Chairman of Lagos Race (Horse Racing) Club. He was only 47 years old when he died in 1956.
As for whether Chartered Accountants belong to the same category as farmers, it was Sir Ronald Leach who as Senior Partner of Peat Marwick Mitchell (later KPMG) from 1975 to 1977 who put matters succinctly:
“Chartered Accountants are like farmers – we reap what we sow. Most importantly, our ethics, integrity and reputation are the fertilizers of our sacred profession. Whatever we do (or do not do), public trust is paramount.”
It was when Sir Colin Sharman became the Chairman of KPMG (1991 to 1999) that he canvassed a somewhat different perspective and profoundly different message by blowing the hunter’s whistle – chartered accountants have to hunt for new ideas, and crucially shift from being re-active to being pro-active. In other words, our attention should shift to the future needs of our clients. According to him, clients are not interested in the past (as reflected in the audited accounts). What is of utmost concern to them is the future, especially the sustainability of their business. The credit for publishing the firm’s accounts belongs to him and the innovation was further amplified by his successors.
When Michael Rake became the Chairman of KPMG, (2002 to 2007) the music changed even more dramatically. He came out with a bold and blunt statement.
“Kill what you eat; and eat what you kill.”
It galvanized momentum and legitimized aggressiveness in the pursuit of goals. No more common pool. The culture had changed in favor of the performance/reward equation and matrix as a well robust matrix.
We were herdsmen (but without AK-47 rifles). We were no longer pastoral settlers but herdsmen ever ready to venture into hitherto forbidden territory (e.g. China and Russia).
Culled from The Alvin Report
What FGN Free Meter Program means for the power sector
Without effective penalties for erring DisCos and consumers, progress may still remain very slow.
According to news reports, the Minister of Power, Mamman Saleh on Wednesday said the distribution of the four million free electricity prepaid meters pledged by the Central Bank of Nigeria would soon begin across the country.
According to him, the government is wrapping up the distribution of its initial one million meters, which he labelled phase zero, and would soon begin the distribution of the four million sponsored by CBN, which he tagged phase two. He also noted that the Federal Executive Council approved N3bn for the execution of six major electricity projects in the country to upgrade Nigeria’s electricity facilities and improve power supply across the country.
Ineffective metering remains a major drawback to the success of power sector reforms in Nigeria. While some consumers avoid paying for power consumed through meter bypass, some other consumers are made to pay for what they have not consumed through estimated billing by DisCos.
DisCos have been largely unsuccessful with metering their customers.
As far as inadequate metering is concerned, DisCos over time, have used this situation to their advantage via estimated billings. It appears that fully metering customers are currently being viewed as a disincentive, given that estimated bills can easily be manipulated.
According to a report by the Nigerian Electricity Regulatory Commission (NERC), only 4,234,759 (40.27%) of the total customer population of 10,516,090 were metered as of 30 June 2020. Clearly, this validates the widely held view that there are a wide number of customers on estimated billing which gives room for illegal connection to the networks and in turn corrupt practices. NERC further revealed that only three out of 11 Electricity Distribution Companies in the country had metered more than 50% of electricity customers under their coverage areas as of June 2020.
Effective metering in our view is one step ahead in solving the myriad of problems embattling the Nigerian power sector. Though supposed to be unpaid for, many customers in a bid to avoid the bureaucracy associated with getting meters have paid to get their own meters. We believe the provision of meters to all end-use customers will go a long way in ameliorating the liquidity squeeze in the power sector whilst also providing cashflow to the DisCos for investment in equipment needed to evacuate unused electricity to consumers nationwide.
We laud the FG’s efforts at distributing meters freely to end-users, but we note that without effective penalties for erring DisCos and consumers, progress may still remain very slow.
CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.
Tasks before the AfCFTA dispute settlement body
The success of the AfCFTA will depend largely on the willingness of the member states to adhere to the agreement.
The Dispute Settlement Body (DSB) of the African Continental Free Trade Area (AfCFTA) held its inaugural meeting on 26 April 2021 at the AfCFTA Secretariat in Accra Ghana. The DSB is composed of the representatives of the State Parties and shall have the power to establish Dispute Settlement Panels and an Appellate Body responsible for settlement of disputes between the member States.
The mandate of the DSB also extends to adopting the reports of the Panels and Appeal Body as well as monitoring and ensuring the implementation of the ensuing decisions. In carrying out its mandates, the DSB will work with the AfCFTA Secretariat while maintaining its independence in the area of dispute settlement.
The inaugural meeting signals the readiness of the AfCFTA dispute settlement infrastructure to take up any disputes that may arise in the course of trading amongst the member States. Disputes are inevitable in any free trade area and when any such disputes arise under the AfCFTA, the resolution is to be in line with the Protocol on Rules and Procedures on the Settlement of Disputes which forms part of Phase I Negotiation.
Recognizing its importance to the success of the trade deal itself, the Protocol proclaims that “the dispute settlement mechanism of the AfCFTA is a central element in providing security and predictability of the system” and “shall preserve the rights and obligations of State Parties under the Agreement and clarify the existing provisions of the Agreement in accordance with customary rules of interpretation of public international law.”
Though inspired by the World Trade Organization (WTO)’s dispute settlement architecture, the AfCFTA framework is meant to address some of the lapses in the WTO. In an exclusive opinion piece for “The Africa Report”, Mr Wamkele Mene, Secretary-General of the AfCFTA, explained how the AfCFTA will work in order to avoid the pitfalls of other trading blocs. As noted in the report:
“The WTO’s tribunal of final instance for global trade disputes, the Appellate Body, has been reduced to irrelevance over disagreements on its composition. The paralysis of both the WTO’s negotiating and dispute settlement arms means that trade disputes between China and the United States, two of the WTO’s largest members, have flared into open hostility.”
Drawing from the WTO experience, the African States in negotiating the free trade treaty cherry-picked the aspects of the WTO’s dispute settlement system that have worked and jettisoned the problematic parts.
At the Virtual Press Conference held on 04 May 2021 to update the public on the status of the implementation of the AfCFTA and the progress made so far, the AfCFTA Secretary-General re-echoed the importance of the dispute settlement mechanism to the success of the AfCFTA while answering questions from journalists across Africa. Commenting on the milestone achievement recorded with the inaugural meeting of the DSB, he noted that:
“The dispute settlement is really the mechanism and is at the heart of the African Continental Free Trade Area. And it is at the heart of what we mean by a rule-based trading system. And at the heart of what we mean by market certainty and predictability. For the first time on the African continent, there is a dispute settlement body that will have oversight over all the disputes that arise under the agreement whether there are investments related, trade in goods, trade in services, market access related disputes. This body will have oversight over all of that.”
All eyes are now on the AfCFTA DSB as it shoulders the task of ensuring that disputes between member States are resolved in an efficient, transparent, fair and impartial manner. The starting point is to ensure that persons appointed to be members of the Dispute Settlement Panels and Appellate Body have the expertise and experience in the subject matter of the dispute and are chosen strictly on the basis of objectivity.
There is an even more important corresponding duty on the State Parties when nominating persons to be included on the indicative list or roster of individuals to serve as Panelists to ensure that nomination is based on merit and proven expertise on the subject matter. The member States should eschew any nepotistic or tribal considerations in nominating State representatives. The Nigerian government should resist the temptation to premise its nominations on Federal Character or other ethnic or religious considerations as we’ve seen in recent appointments.
Recent events such as the reported discriminatory measures against Nigerian traders in Ghana, the closure of the Nigerian border with Benin Republic, the Xenophobic attacks in South Africa on African businesses and the retaliatory attack on South African-owned businesses present examples of the kind of disputes that may come up before the AfCFTA DSB assuming that similar issues arise in the future. Others may include disputes over conflicting public policies, tariffs and non-tariff barriers, rules of origin, dumping, regulatory excessiveness, standardization, trans-shipment, taxation, market access, and consumer protection etc.
The AfCFTA dispute settlement mechanism is restricted to State-to-State disputes. The treaty is silent on the mechanism for the resolution of disputes between private individuals. Notwithstanding this limitation, the private sector participants such as the SMEs and other business entities will be able to petition their governments to implement the rights and obligations set out in the agreement establishing the AfCFTA. That way, the rights of the private sector can be enforced using the State instrument.
For instance, in a situation where citizens of a member State are being subjected to discriminatory measures in another AfCFTA member country, the affected country may decide to refer the case to the DSB on behalf of its citizens, after exhausting the amicable settlement options such as Good Offices, Consultations, Conciliation and Mediation. It is not yet clear what yardstick will guide such referrals or to what extent such anti-free-trade measures will impact on the citizens of the member state before it decides to challenge the infractions at the DSB. Whatever the case, where a member state fails to protect the rights of its citizens, the affected traders may seek other legal remedies available under the national laws or within any bilateral and multilateral instruments applicable to the disputes.
In relation to investment disputes, the ongoing negotiation of the AfCFTA Protocol on Investment is meant to clarify the uncertainty around the framework for resolving investor-state disputes. The member states in choosing to resolve their disputes within the AfCFTA framework should be aware of the fork-in-road provision under article 3(4) of the Protocol, which precludes a State Party who has invoked the dispute settlement procedure under the Protocol with regards to a specific matter from invoking another forum for dispute settlement on the same matter. Another area of interest is the enforcement of decisions reached under the AfCFTA dispute settlement process.
The effectiveness of a dispute resolution mechanism is often measured with the 3 E’s which are efficiency, expertise, and enforceability. Challenges will likely arise in relation to compliance with decisions under the AfCFTA as we have seen under the WTO and other regional trade treaties. It is hoped that the desire to enhance investors’ confidence and the spirit of amity will spur the AfCFTA members to comply with decisions made by the dispute settlement bodies. In the end, the success of the AfCFTA will depend largely on the willingness of the member states to adhere to the agreement and to eschew any form of self-help when they perceive any breach of the trade deal.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- FMDQ approves quotation of MTN’s Commercial Paper worth N73.5 billion.
- MTN Nigeria issues a 7-Year Series 1 bond worth N110 billion.
- Caverton Offshore Support Group reports profit after tax of N520 million in Q1 2021.
- Okomu Oil proposes dividend worth N6.7 billion for shareholders.
- Ardova Plc confirms appointment of Oladeinde Nelson-Cole as secretary.