FG SHOULD CUSHION PAINS OF ECONOMIC REFORMS- HAJIA LADI IBRAHIM

Definitely, this may not be the best of times for the informal sector as huge challenges of operating environment continue to stare them in the face. This include choking fallout of economic reforms that threatens to put the sector out of business.

Because of this, the President of Association of National Accountants of Nigeria (ANAN), Hajia Maryam Ladi Ibrahim, has called on the government to put palliative measures in place to cushion the effects of the harsh operating environment.

According to her, 'the president needs to design an economic policy that will impact positively on the informal sector. The sector is faced with difficulties of starting a business, registering properly, among others. He should institute effective measures to alleviate the pains of economic adjustment by creating the social safety nets as a way of alleviating the pains of economic reforms.'

The Kogi-born accountant observed that the Small and Medium Enterprises (SME), which is the engine of any economy, is dying because of lack of power supply. 'Our view is that it is better to empower the private sector, especially the small businesses, to create jobs instead of relying on the public sector to do it. The public sector cannot create jobs that can go round the people.

Emphasis should be on the creation of enabling environment for the private sector to create jobs that are sustainable. Until the government is able to fix this key sector in place, the nation's economy goes nowhere. It is the power improvement that can enable the SME/manufacturing sectors to thrive and move the economy forward,' she said.

On the economy, she lamented the over-dependence on oil for over 70 per cent of government's total revenues, and only 10 per cent from internally generated revenues, warning that 'if there is any collapse in oil prices, as witnessed during the global economic meltdown, it would have a disastrous impact on the budgets of all the governments of the federation, be it local, state or federal.'

Giving reasons for this, she explains: 'This is because the Nigerian economy is not insulated from the global economic crises. Oil provides Nigeria with quick foreign exchange, thereby making the government to neglect other key areas like agriculture, which used to be the mainstay of the economy before Oil took the centre stage fully in the 70's.

These have resulted in rural-urban drift, with the youths pursuing their share of the oil wealth as well as seeking non-existing white-collar jobs. Over reliance on oil has retarded the development of other sectors of the economy. Agriculture, if well harnessed, has the capacity of employing a large number of the unemployed in the labour market.'

In this interview with Daily Sun, the seasoned accountant speaks on the challenges facing her association, and national economic issues.

Excerpts. ANAN The challenges facing the association are the challenges facing all professionally qualified accountants. Presently, you know what is happening globally; you also know what is happening in the country. ANAN, as an association, has professionally trained its members to face the challenges ahead. That is, our members are ready to work transparently to see that the corruption level in the society is reduced. I think that is the biggest challenge facing all professional accountants now.

Whatever is happening today a true professional accountant would not be part of it. It is basically the biggest challenge facing professional bodies today. What we have done to overcome the challenges? Well, we have trained our members. But you know that most of the corruption that had happened in the society, whether in the private sector or the government, you hardly find our members being involved. I'm not saying that it does not happen but you hardly find our members involved. And we have tried as much as possible to give our members the right training and ethics to produce well branded professionals for the system.

Accountants Oh yes! The Nigerian population is estimated to be over 150 million. At present, the total number of professional accountants produced by both ANAN and ICAN is about 50,000. There are a lot of enterprises - both small and medium organizations, Ministries, Departments and Agencies in this country where their accounts personnel are not trained professionally.

Many business organizations don't make use of trained accountants. This trend must change. As the economy continues to grow, it will surely need the services of professional accountants who must be of high integrity, and acting with sincerity of purpose that would have a significant impact on the citizenry.

Plans for ANAN I have seen that most Nigerians don't know that there are two professional accounting bodies in the country. We are the second and we have contributed greatly to this country. Taking ANAN to the next level is that we are now pursuing the membership of IFAC. We are already a member of IAAR (International Association of Accounting Educators and Research) and Extensive Business Language. When it comes to research, we have a lot of people in the academia that are our members. We want to see how we can assist them in their various research area of accounting.

Economy Nigeria's economy is trying to survive, just like other world's economies are also trying to survive. But the power supply issue is the biggest challenge facing the country. If we have the power issue sorted out, the economy will come up as expected. The government is trying to do something about it. I believe that if the power situation is enhanced and brought to stability, it will be a benefit to the entire economy, where the small, medium and large enterprises will thrive and there will also be a lot of job created for the society.

Banking the unbanked It still goes back that our founding fathers believe that they should keep their money in their various homes, either underground…or whatever it is. It is by creating awareness that would make people aware that it is good to take their money to the bank; that it would help them to generate more funds by getting additional assistance from the bank to improve their businesses.

They may think they have money but when you go to the bank and the bank sees that you have saved much, they will be able to appreciate you and grant you assistance to expand, thereby creating more jobs for other people. But keeping the money and just work alone within you would not create jobs for people to benefit from. I think this CBN policy would help the unbanked masses in this country. This government itself, through the National Orientation Agency, should actually help by going into publicity. So people would know it is not safe to keep money back home, and money kept back home is useful to the owner alone. But if you get to the bank other people would benefit from it…and this enhances the economy of the society.

Cash threshhold It is a very welcome development. It is just that the pronouncement by the Governor of Central Bank of Nigeria, Malam Sanusi Lamido Sanusi, is in a haste to develop the Nigerian economy to match with the international ones. That is why the hasty pronouncement is coming. It a very welcome development if we are able to achieve that. You will be finding that the foreign investors will have confidence in the Nigerian economy.

The money laundering all over the place will be tracked down. The level of corruption of money being carried in 'Ghana-must-go' bags would be eliminated and you can track the movement of fund to all accounts. So, I'm very pleased that it is coming up. But the CBN governor and other stakeholders have to put in a lot of challenge to actualize it. I'm sure he is going to continue working with the stakeholders so they can overcome the challenges that could make this policy fail. But it is a very welcome development for us as a nation.

Part of the challenges faced by the banks is power supply issue. If you go to the various banks in some rural areas where you find a lot of businesses going on, there is no power to run them. They have to travel to some areas to make their banking transactions. And even when they get there, the facility, which is the light, may not be there as well; the bank may be computerized but the ICT may be handicapped.

So, there are lots of things that need to be done to get things right. You cannot pick Lagos, Abuja and Port Harcourt and use them as indices for Nigeria. The better part of Nigeria still needs a lot of enhancement and I'm sure, with a lot of things put in place, we will achieve it. But the time given by the CBN governor gives serious concern. We should all cooperate with him to see that this programme is achieved.

Manufacturing sector Nigeria we hail thee! We all know that most of the major companies that were in this country have moved to the West Africa sub-region. Parts of them still do business in Nigeria, but people say it is expensive. What makes it expensive is the level of corruption. The government is equally fighting it. But it will holistically achieve the desired results if all hands were on deck.

All agencies must work as one to win this fight against corruption. Lack of electricity is what has made these major companies move out of Nigeria. Without power, you cannot do anything. 'I have a factory, but we cannot operate because there is no power to carry the machines. We have a generator, but diesel is too expensive; that is the complaint. Even the bigger companies cannot rely on their own power generators to carry out manufacturing activities.

As such when they find that labour in Nigeria is becoming too expensive for them, they look for cheaper labour outside. And it is the manufacturing/private sector that actually assists the public sector and the entire citizenry to move its economy. I think the government should see that the power issue is sorted out immediately. For the level of corruption, which cannot be eliminated, we should all keep on asking ourselves, individually or collectively, 'are we serving the nation?' If we are, then the service to the nation should be uppermost in our minds, and we should serve with all our integrity and in all honesty, so that the younger generations would borrow a leaf from our leadership role.

Diversification The Nigerian government depends on oil for over 70 per cent of its total revenues, where the country gets over 90 per cent of its foreign exchange earnings, while governments are dependent on it for over 90 per cent for their allocation, and only 10 per cent from their internally generated revenues.

If there is any collapse in oil prices, as witnessed during the global economic meltdown, it will have a disastrous impact on the budgets of all the governments of the federation, be it local, state or federal. This is because the Nigerian economy is not insulated from the global economic crises.

Oil provides Nigeria with quick foreign exchange, thereby neglecting other key areas like Agriculture, which used to be the mainstay of the economy before Oil took the centre stage fully in the 70's. These have resulted in rural-urban drift, with the youths pursuing their share of the oil wealth as well as seeking non-existing white-collar jobs.

Over reliance on oil has retarded the development of other sectors of the economy. Agriculture, if well harnessed, has the capacity of employing a large number of the unemployed in the labour market.

Fraud Well, I may not have all the information as regards the level of fraud in the country but based on what we read in the newspapers daily, Nigerians will agree with me that much still need to be done in this area. Indeed, the two anti-corruption bodies - Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and Other Related Offences Commission(ICPC) - are doing their best. But every organ should play its role to salvage the country from fraud and corrupt practices. Then, where everybody would like to protect their names becomes obvious.

Economic reforms Nigeria has never been bereft of reform since Independence, be it economic or political reforms. Quite a few achievements have been recorded in Nigeria from the economic reforms.No matter how laudable the economic reforms the president introduced, he should tackle a number of challenges. One of them is the endemic corruption. The President should intensify the fight against corruption in all spheres of our national life. No amount of economic reform will succeed in an atmosphere with political office holders.

Infrastructural bottleneck still persists, making it imperative for the producers to make arrangement for their own power and water supply, even security etc. The President needs to design an economic policy that will affect positively the informal sector. The sector is faced with difficulties of starting a business, registering properly, among others.

He should institute effective measures to alleviate the pains of economic adjustment by creating the social safety nets, as a way of alleviating the pains of economic reformsSome of the reforms in the financial sector have led to the Fiscal Responsibility Act, Public Procurement Act, the categorization and recapitalization of banks, which abolished the universal banking. Looking at these laws critically, implementing them would go a long way to save the sector from imminent collapse. Frankly speaking, it is high time the relevant authorities prosecuted those that violate these enactments because most of our laws are being trampled upon with impunity. It is better not to have the laws than spend so much having them without carrying them out.

Infrastructure You see, we had this belief that we just keep on building new things. We want to have new buildings; new generator sets etc., but we have no maintenance culture. Maintenance culture in the past years has been a problem to this country. We should try to maintain the little we have. There should be a work plan towards maintaining what we have. Then, even if we have to add new equipment, new structures, we should have a reason why we want to add the new things. If we did the sudden breakdown in our system structurally wouldn't have occurred.

Advice As for my advice for those taking up accountancy as profession, first, they should discard the idea that it is an avenue to amass wealth. This notion often makes people to indulge in fraudulent and unprofessional activities.

Secondly, they should love the profession. It is only then that they can protect it. They must also stick religiously to the ethics of the profession, based on discipline, and avoid the temptation that goes with it since the profession is based on accountability.

Professional accountants are to provide quality financial information that will be of real value not only to investors, but also to policy makers. Accountants must also be involved in corporate management and governance, which is meant to demonstrate greater accountability for information, financial management and control necessary to produce trustworthy information.