The Lagos Chamber of Commerce and Industry (LCCI) has observed with concern, the spate of regulatory sanctions in recent times, especially the severe, arbitrary and disproportionate character of some of the penalties.
The LCCI is a firm believer [and indeed a promoter] of the ideals of good corporate governance and adherence to best practices in business. The LCCI would not support impunity under whatever guise. However, we also desire that the activities of regulatory institutions be in consonance with best regulatory practice. We note the recent sanctions as follows:
- N 1.4 Trillion fine imposed on MTN by the Nigerian Communications Commission [NCC] on account of non-registration of sim cards.
- N1 billion administrative charge imposed on Guinness by NAFDAC.
- Penalty on Skye Bank to the tune of N 4 billion imposed by the CBN.
- Penalty on First Bank of N 1.9 billion imposed by the CBN.
- Penalty of N 2.9 billion imposed on UBA by the CBN.
We believe that sanctions should be proportionate and corrective. It should not be of such magnitude as to impose a shock from which recovery by firms may either be difficult or impossible. There should also be a clear framework and guidelines for the imposition of sanctions or penalties. The limit of regulatory discretional powers should be clearly defined. The concern is that such powers are commonly prone to abuse and could predispose regulatory agencies to high-handedness and intimidating disposition. This certainly would not augur well for an economy that needs to attract investment.
Already, the perception and ranking of Nigeria as an investment destination is unsatisfactory. For instance, Nigeria ranks 169 out of 189 countries profiled in the World Bank Ease of Doing Business Report for 2015. It also has a ranking of 124 out of 140 countries profiled in the global competitiveness report of the World Economic Forum. The regulatory environment is critical factor in this ranking performance of Nigeria. This is therefore not the time for intimidating and overbearing regulatory tendencies.
While we do not condone infractions of extant regulations or guidelines, we believe there should be some restraint in the imposition of penalties by regulatory agencies in the interest of private sector development and the advancement of the Nigerian economy.
Alhaji Remi Bello, FCA
22ND NOVEMBER 2015