- By Rosemary Onuoha
- Biodun Adedipe of B. Adedipe Associates Limited has said that some extant laws in the financial services sector are outdated and need to be aligned with the present dynamics of economic activities in the country.
Adedipe who stated this at the Peninscope programme in Lagos recently said, “Generally, the regulatory environment in financial services in Nigeria is overlapping and fragmented, and therefore comes with several inefficiencies and gaps in the extant laws, some of which are outdated and need to be aligned with the present dynamics of economic activities in the country.”
Adedipe said that the purpose of regulation is to facilitate commerce, prevent chaos and ensure level-playing ground, adding, “In a regulatory review study carried out in Nigeria in 2012/2013, there was evidence suggesting that regulation is a hindrance to business activities and investments in Nigeria.
This is why the country ranks pretty low in the annual ‘Doing Business’ survey conducted by the World Bank in conjunction with the International Finance Corporation, (145th out of 190 countries in the 2018 ranking) – a score of 52.03 compared to 100 for frontier jurisdictions.
“The specific major findings of the study are that some of the agencies had overlapping jurisdiction that often results in supremacy contests between them, rather than collaboration and pursuit of common objective; duplication of reporting and disparate demands by regulatory agencies has adversely affected the cost of doing business and limited the scope for new investments; high cost of compliance for regulated institutions; the regulators themselves waste resources in conducting analysis of the same data, for example such affinities exist between the CBN and NDIC as well as between the CAC and FIRS; many of the agencies have out-of-date extant laws that need to be updated; the requisite tools, human capacity, appropriate technology and supporting infrastructure were inadequate in a number of the agencies, thus affecting their operations and their interface with the regulated institutions.”
Adedipe said that some of the enabling laws of certain agencies do not provide sufficient enforcement powers, which makes regulated institutions that commit infractions get away with light or no sanctions at all. This was an issue with NAICOM in 2013.
He recommended that the governance structure and system in the agencies needs to be strengthened to engender more transparency in their financial conduct even as extant laws of regulatory bodies should be reviewed at regular intervals and aligned with the current realities of the Nigerian business environment.
“Funding of the agencies should be given priority attention if they must discharge their mandates effectively and efficiently. Corporate governance needs to be strengthened in most agencies. Some regulatory bodies need their enforcement powers to be strengthened,” Adedipe said.