The issue of tenure limit for banks chief executives and auditing firms has been the subject of discussion in recent times, with some criticizing the CBN for imposing such tenure limits.

Major- General Sebastian Onwuama (rtd) President of Institute of Chartered Accountants of Nigeria {ICAN}

President, Institute of Chartered Accountants of Nigeria, ICAN, Major- General Sebastian Onwuama (rtd) however, says that the tenure limit is necessary for good corporate governance and that the Institute’s limit for auditing firm is five years.

In this interview with Babajide Komolafe and Providence Obuh, he identifies leadership as the greatest impediment to the nation’s development in the last fifty years, adding that there is little to celebrate. Read on

Nigeria at 50, some are of the opinion that there is no reason for the kind of elaborate celebration intended by the government. Do you share this view?

Yes and no, yes because there are other third world countries that have within the past thirty, forty, fifty years surpassed the expectations in governance and in economic development of their people, and no because in the history of nation-building, fifty years is not enough to judge level of national cohesion and level of economic development. You will recall that Mexico recently celebrated the 200th anniversary of its independence from Spain, as developed as it is, it still has basic and fundamental problems of governance, security of lives and property and even of  economic development.

The nation Nigeria did not arise by choice or desires of the individual components of the nation but as a result of an arbitrary map drawn by the colonialists, so there are inherent and fundamental issues of ethnic differences, religious differences, social differences and a period of fifty years, in my own opinion, is not enough to build a united and cohesive state, so we will get there,  probably in the next fifty years we will be singing another song entirely, so on that note, I say that it is not a very fair comment to say that within fifty years we have not achieved anything.

If you look at the unit that formed the society, that is the family, 25-30-year old marriages have been known to break down at the least provocation, but we thank God today, we still remain as one and indivisible nation and I believe the future holds much more for us as a nation. We are gradually finding out that there is unity in diversity, and that despite these fundamental problems, we will get there. We are still counted as a developing nation, some will say we are still under-developed, all around us we see evidence of underdevelopment.

Looking back at the  last 50 years, what single factor can you identify as the greatest impediment to the development of Nigeria?
The greatest single impediment to development of Nigeria is that of leadership. We are yet to have a leadership that responds to the needs and yearnings of the people. Like I said, yes it is good to have a score card but it is too early in the day bearing in mind the fundamental barbarity of our nationhood and I’m saying problem of leadership because we have not yet evolved a leadership that the people have a say in electing. We have always had a system – whether military or civil – that has been sort of imposed on the populace.

The very moment we have a leadership that the people will say we don’t want you because you have increased the price of bread, we will rise against you and that leadership listens to them like in Mozambique, a third world country like Nigeria, people went out in the streets because there was an increase in the price of bread, but here, as rich as we are, we cannot say yes we’ve done something that has added value to the lives of the citizenry. Look at all the indices of economic growth/development, is it per capita income, is it GDP, is it level of infrastructure, which single sector of the economy has met with the minimum World Bank requirement that we should now roll out the drums  and say we have achieved a lot? Like I said, we will get there but the most  important thing is to analyse the problem, we are never short of analysts in Nigeria, but we are very much in short supply of genuine responses to the needs of our people.

Recently, we had some electoral reforms, do you feel these reforms are adequate to produce the kind leadership you are referring to?
Constitutional reforms or electoral reforms the world over, are not a one-stop shop incident, you make your mistakes, correct them and move on, that is why a country like the United States has come a very long way, the problems we are witnessing now they did experience the same thing, but we’ve got to start from somewhere and I believe we, as a people, have started off by observing that the type of electoral processes we’ve had in the past had never adequately addressed the contentious issues that have really made it impossible for us as a people to elect a government of our choice.  I can tell you one thing, whether it is under military dispensation or civil political arrangement, the problems are still the same.

Until the votes of Nigerians count, we can never say we have addressed the issue of leadership and governance. Until an elected leader feels he has a moral obligation to the electorate to deliver the dividends of democracy, then we are yet to start. The electoral reform is aimed at addressing those fundamental issues, my hope and expectations is that they will, but if they do not, we should not lose hope, we should continue to strive. If we talk about  the electorate electing a leader of their choice, I tell you one thing, the last time I voted in any election was during the election of Abiola in 1993, ever since then, I have failed to participate in any election because I have always felt that my vote does not count, and it has never counted, but I’m very  optimistic that in the forthcoming election, I must vote because there are visible signs of improvement of redressing the deficiencies of the past, so I am hopeful and I want to believe that I will vote.

In countries like the US, when the issue of election is coming up like this, we often see institutions or organisations that occupy critical positions in the country coming out to endorse candidates they believe would deliver. But that has not been the case in Nigeria, especially a body like ICAN. Any  likelihood that the Institute would endorse a candidate?

You are perfectly correct, and I want to tell you that the Nigerian political system is not ripe and is not yet ready to accept such stance. If you make a statement, you are in support of zoning, you are not in support of zoning, you are in support of Mr. A or B, there will be a lot of meanings read into it that yes you as a people or as an institution, have left your stance as being an apolitical institute, now you will be classified as one of those who have calculated attempt at maligning, deriding, bringing to disrepute the work and achievement. We are not yet politically matured to accept  that institutions have a right to express their views without any undertone being read into it.

As an Institution and also the ICAN president, how will you assess our achievement as a country in the area of manpower development, that is one, two, how would you assess the attitude of government at all levels to the issue of manpower development?

Looking at the big picture, Nigeria, I think in Africa, has produced the highest level of skilled and professional manpower. By Nigerians I mean both Nigerians at home and those in the Diaspora, there is practically no country of the world you go to without hearing or seeing Nigerians occupying very strategic and important positions, these are Nigerians and they still lay claims to Nigerian citizenship.

In terms of our internal national manpower development, I think that we have recorded a huge success, they could have done better, at the dawn of independence, how many universities did we have? How many graduates did we have? In my village in those days, we glorified and looked at one or two graduates in the community as men sent from the gods to visit we lesser mortals, but today, there is a likelihood that if you throw a stone in Tejuosho and Iddo markets, it will likely land on the head of a university graduate and this shows the level of manpower development we have attained since independence.

Well this is quantitatively, qualitatively there are lots of questions and employers have expressed grieve at the quality of the manpower we have to employ. Some people say Nigerian graduates are not employable, and I say, do you talk of unemployed graduates when there are no employment opportunities?  There are two sides to the question, you must have skilled and trained manpower resources. Secondly, you must have employment opportunities, where one is greatly in deficit, you cannot talk about deficiency of the other. If we have a system that has opportunities for young graduates and these graduates cannot fill those available vacancies, then you can now begin to talk about low quality of graduates, but where you don’t even have facilities to engage these graduates, I think it will be uncharitable to say that our graduates are unemployable.

It is true again that the quality of education in our tertiary institutions has not met expectations both from world academic standards and our internal standards. No Nigerian university has been listed among the first 1000 universities in the world, it’s not good enough, if we are to be one of the 20 leading economies by the year 2020, our tertiary institutions should be listed among those high performance tertiary institutions.

In terms of qualitative capacity-building in the nation, I think we still have a long way to go, the standard of academics in tertiary institutions has fallen grossly, lack of infrastructure, the quality of lectureship, the quality of exam processes in the universities; they have funny things they call sorting, I don’t know whether they are sorting the good from the bad, whatever terminology they are using, I think is very uncomplimentary.

In my days as a university undergraduate, you go for the exam, internal exam not the final exams, the next person to you sits about three feet away and the person by your right may be a level 100 student and you a level 300 student, so there is no way you can communicate with each other, you cannot bring in accessories to assist you, when you pass, you know you pass.

And again, we as undergraduates had our role models – those who graduated with a 2.1 or a first class and have been  employed in the multinationals and in government institutions where they flew the flag of the university. But now, there is a complete erosion of societal and family values, the model of our young men and women are those graduates who six months after graduation, visit them on the campuses with SUVs to announce they have arrived when we don’t know where they are coming from. So many vices have really affected the quality of skilled manpower in the tertiary institutions.

What about the attitude of government to manpower development?
The issue of government whether at the federal, state or local level, cannot do more than they have done because of the high cost of education.

Modern education has gone beyond the use of blackboards and chalk, now you  have IT-driven educational system and the capital cost involved in this type of education is too huge for government to get involved in. Primary school scholars elsewhere are computer literate and they have these facilities. No government can afford to give our  teeming population of young men and women the type of education they need. I think it was wise of the government to  allow private institutions to establish universities and they should do everything possible to encourage these private universities in terms of provision of basic infrastructure like electricity, water, good roads etc, because if you have a five-star university located in a remote village that has the conducive environment for learning, then they should have good roads, constant electric power supply, potable water and above all, they should have security.

Where these things have to be provided by the university, it is going to be at a great cost to that university and definitely they will pass on this cost to parents and guardians of wards and thereby increasing the cost of qualitative education in these tertiary institutions.

On one hand, government cannot afford to finance qualitative education in the context of a 21st Century educational system because of the huge capital cost; on the other hand, the private sector is in the best position to provide these facilities on the condition that, the cost of providing these facilities are exclusive of cost of providing infrastructure like roads, electricity and water.

But most importantly, I keep saying that the value system in our tertiary institutions must change,  we must go back and review our societal value system, who are the role models of these students?

I have always had opportunity to talk to students in tertiary institutions that are credited by ICAN and I keep saying it that we must go back to our old value system where we reward hard work,  honesty and integrity and we sanction anti_societal vices like cultism and so on. And that the role models of students should be those that have achieved laurels through dint of hard work, not through sorting, not through corrupting the educational process, those things cannot help us.

A student who makes a 2.1 through illegal and illegitimate means is a burden and is a liability to the society he is going to serve.

This has a chain reaction, his perception of achievement is cheating and we are saying no, it is  wrong, we must leave those values behind, they are not part and parcel of what will make Nigeria great even in the next fifty years.

Let’s look at accountancy in Nigeria, assuming that we don’t have bodies like ICAN and ANAN, what will the practice of accounting be like?

You cannot think of an economy or a society without the accountancy profession, it is like saying you are going to have a car without the engine.  The accountancy practice is the heart of financial business transaction, accountancy is the language of finance, of commerce, so if you don’t have professionals in that field, then you have not started.

I have had the opportunity and privilege of attending various international seminars and workshops, the emphasis all along, whether these are seminars or workshops facilitated by the World Bank or the International Federation of Accountants (the governing body to which ICAN belongs), has always been on building capacity for public financial management and also compliance with internationally recognised auditing and accounting standards. So without this body, Nigeria, one, cannot on its own, manage its resources properly.

Number two, we cannot relate with external partners in business in the language they will understand, that is in terms of rolling out financial statements and interpreting such statements to ensure that potential investors have the information, the material they require to make  informed decision, so the accountancy profession and the accountants and auditors are a strategic factor in the equation, that is a constant, whichever way you look at it.

One of the major features of the last fifty years has been reoccurring banking crisis and many people always attribute this partly to the accountants and auditing firms of the banks. What is your take on this?

Honestly, I’m thrilled by the revered position that the accountants and auditors have, they almost have assumed the position of a small god that is responsible for floods, responsible for motor accidents, responsible for fire disasters, the air crashes, the accountant is responsible for all these. And I ask the question, what has happened to corporate governance, is the accountant the MD/ Chief Executive of a bank? All the executive directors of the banks, are they accountants?

All the company secretaries, all the engineers, architects and so on, that make up the management structure of an establishment.  Accountants are the head of central banks, they are the head of all the regulatory bodies like SEC, NDIC, accountants are responsible for their failure to do their job, there are regulatory bodies there, if an accountant prepares an account and an auditor audits it, before that account is brought to the AGM of the bank, it is presented first, to these regulatory bodies, if the regulatory bodies fail to detect fundamental problems with the accounts, who should be blamed?

Is it  the accountant, the auditor or the regulatory bodies? It  is a collective responsibility, what I don’t accept is the penchant for people to single out accountants and auditors and turn them to the whipping boy.  And I say NO, it  is wrong, it  is a self-serving argument because there are regulatory bodies whose duties and responsibilities are to look at these  financial statements before they are placed in public domain and say look we don’t agree with the  provisions you’ve made for toxic assets, in any case, for the banks you are talking about,  are there no bank inspectors sent by the Central Bank of Nigeria to these banks, what were they doing, the banks may give them one set of accounts and then give another set of accounts to auditors, is that what we are saying?

Has any of the inspectors from the Central Bank been accused of negligence or failure to do his job? Let us look at the argument from the big picture, from a global perspective, so why single out the accountants, it is a self-defeating argument, has any staff of Central Bank sent to any of those six distressed banks, been  brought before the court of law? What is SEC doing? What is NDIC doing?

I am not holding brief for our accountants and auditors, if any of them is found to have fallen short of expectations or have had serious infractions,  they should be brought before our investigating panel and if their case is found to merit going to the disciplinary tribunal, they are sent to the disciplinary tribunal,  which has the status of a high court, at the end of the proceedings, if such members are found to be involved in actions that will amount to professional misconduct, sanctions are imposed on them but before then, in our characteristic national manner, everybody becomes a judge over the accountants. One day a pastor will rise up and say the drop in the congregation that comes to church is because the accountants have not done their job.

ICAN has always opposed proliferation of Accounting bodies but many believe that given the huge population of Nigeria and the expected increase in students that want to become chartered accountants, one professional body will not be adequate?

First and foremost let me make something clear, Nigeria’s population is 150 million that doesn’t mean they will have 150 million accountants, the number of accountants is related to the level of economic development, if you have 150 million where their total earnings, let’s say for the purpose of argument, their GDP is 50 million, you find out that you cannot relate the number of people to the number of accountants and we are in an IT age where virtually everything is automated, in terms of the number of accountants to number of people in Nigeria, the chemistry can’t mix and it will never mix. Whether the number of people we have at ICAN  can service the economy? Yes of course, because our members are highly skilled, very well trained. I know what you are driving at, I try as much as possible not to be drawn into the contentious issues of the number of accountancy bodies,

so we are all there to serve our own purposes, I am only going to speak from the perspective of  ICAN President, the legislative bodies decide which accountancy body to approve and not to approve and it is not within the enabling act of ICAN to decide whether motor mechanics should be called accountants, panel_beaters should be called accountants, that is left for the specific government  body that will legislate on who becomes an accountant, I can only authoritatively speak for ICAN and I will want to say this, that our educational system/standard at ICAN, is not necessarily set by ICAN, ICAN belongs to the International Federation of Accountants, the world governing body that has well over 250 professional accountancy bodies from over 120 countries in that body, they have statement of membership obligation and one of the statements has prescribed minimum educational standards that they expect from member-bodies.

We have revised our syllabus to conform with the minimum standards of the International Federation of Accountants, that is the least we can do, if we say we want to be a global body, if we say Nigeria is going to be among the first 20 economies by year 2020, we must be able to speak internationally recognised language, we should be able to publish our accounts in acceptable formats and standards to other investors. People accuse ICAN of setting too high standards, for passing only very few people, I will accept that accusation as genuine.  If quality now becomes a disadvantage, if your desire to comply or meet with international standards now becomes a liability to you, we have accepted that as a liability, but we are not going to compromise our standards because we are a global player.

IFAC and other bodies constantly monitor our level of performance, they look at our audit firms, they look at our educational system, to make sure that they comply with the minimum standards, and this will enable us remain as members of that body, so if we do not meet with such standards, there is no way we can see ourselves as a global body, so that is what ICAN does. ICAN is not interested in who  becomes an accountant, we have gone far beyond that. Nigeria as you said, has 150 million people, it is too large, if the legislative bodies want to graduate okada riders as accountants, we’ll graduate them as accountants, if you want to bring vulcanizers and call them Nigerian Institute of Vulcanizers and Accountants Limited, we will accept them, ICAN has gone beyond that level, we now want to put our foot down, we want to stamp our authority as an internationally recognised accountancy body, not only in the West African sub_region where ICAN is the dominant member, but also in Africa and throughout
the world. We have gone beyond how many accountancy bodies should be approved in Nigeria, I think we are getting it wrong.

Going forward, what other things will ICAN be doing to enhance its contributions and  influence in the country in the next 50 years?

The Nigerian nation, politically and economically, in the next fifty years is going to be a very well informed nation, and a very economically vibrant nation, and the  economy is going to be learning- based, in other words, we must have highly skilled and professionally trained manpower. And for our members, we have established six faculties and these faculties are centers of excellence and learning, we have a faculty for audit and forensic accounting, we have taxation faculty, we have public finance faculty, and so on.

Our members  after qualifying as general accountants, the next level is that of specialization. The specialisation enables our members to be thoroughly informed about new best internationally accepted best practices, new technologies, new innovations, new accounting principles and so on.  If you are in the audit and forensic faculty, it is no longer the traditional assurance job to certify  the account, you now move to the next level of forensic accounting, going beyond the level of certifying accounts, finding out why certain breaches of corporate governance has affected the future and well-being of the business entity. You have public finance faculty which focuses on attention on building capacity for the public sector whether at the federal, state or local government level so that our accounting system in the three tiers of government will comply with internationally accepted public finance accounting system.  So that when we speak, we are speaking a global language that donor nations, countries or entities interested in doing business will be able to read our published accounts and understand the financial statement so as to make informed decision whether to come into our economy or not.

There have been agitations for a whistle blowing act as a way of encouraging people to report corrupt practices but given the level of insecurity and compromise in the country, there are concerns for the identity and safety of whistle blowers..
The issue of whistle blowing,  I will liken this your question to the earlier question about whether ICAN as a body can make comments on political statements and economic statement, is a tall order. When an individual blows whistle, people will read meaning into it and say he did it  because I am from this tribe or this religion; that is why they want to remove me, all those things are politically motivated. That does not in any way remove the issue of political undertone. I think it is a gradual, slow and painful process. Now, when you blow this whistle, will the participants in the arena listen to you? Will the law enforcement agencies listen to you? Are there two sets of laws? One for the sacred cows and one for the masses, these are the fundamental issues we have to grapple with.

The issue of whistle blowing in other climes is a very welcome issue, and they take it seriously, and there is protection for the whistle blowers but here, if  there is such an instance, the person will thank his God if he breathes the next day. So we are evolving, these are the teething problems we have that are inherent in economic and national growth of a nation. I believe that at a time some of these issues will reach saturation points that everybody on their own volition will say we have had enough, let us go back to the basics.

Looking at the response of countries like the United States to the global financial crisis and the measures they have evolved to prevent future crisis, would you say we have done same thing vis_à_vis our response to the crisis?

If America after 200 years of independence still has these problems in its system, and they have not been able to adequately build a water-tight system that prevents abuse of positions and ensures good corporate governance, I think we are overindulging ourselves to expect that we can put in place a comprehensive and efficient system that will ensure that in future we do not have breaches in corporate governance and abuse of position.

That does not mean we should sit down and say God willing, there will be no incidence like this. We have tried and we are trying and the various regulatory authorities are learning by the day what defects exist in their existing processes and procedures and they are improving. I am thrilled by a few standards which the Central Bank has come up with, that no bank chief executive should be there for more than ten years, that no audit firms should audit a client especially banks for more than ten years, after ten years, it must be expected to resign, they can reapply after ten years.

All these are measures aimed at evolving a culture of good corporate governance and they don’t come overnight.  The gestation period is very long to ensure that we have tried the issue of time-lines for Bank Chief Executives, for audit firms we have observed that there are one or two flaws, so we go back to the drawing board and improve on it. The government is doing its best, the regulatory authorities are trying, we must have the political will also to enforce discipline on those who commit serious infractions without any sacred cows.

Has the Institute made recommendations or submissions to the regulatory authorities on these?
The issue of rotation of auditors has always been in our professional code of ethics, ours is even five years, that auditors should be rotated maximum of five years to avoid the risk of patronizing and risk of not coming out boldly to report on infractions. We have MCP programmes that is, members continuous professional education, during which we educate our members on global best practices.

Like I said, whenever there is a public issue that requires ICAN to respond to at the National Assembly, if there is open hearing and ICAN is invited, we will go there, make our contributions, but where you now want to assume the position of a teacher, you want to tell various agencies and government what they should do, they will say this is aimed at maligning, truncating, undermining their  person, that it  is politically motivated. So you  must strike a balance by your desire to contribute positively and effectively to evolving national and economic growth and at the same time, you have to look at the risk of being labelled by those who feel you are a detractor to their well achieved
and acclaimed  reputation.

The Institute will soon be holding its annual accountants’ conference, what is the focus of this year’s conference?
It boils down to the question you asked me again at the beginning of this interview, at 50 what do I think of the Nigerian political entity and her economic development?

When the chairman of the accountants conference asked me for a theme for the conference, I thought,  we have over-flogged  the issue of global economics and crises and strategies for recovery, at 50 what do we expect,  it is time for stocktaking, and I feel we need  to have an objective and independent-minded assessment of ourselves, we don’t want anybody from the establishment who will come and sing praises in honour of the various governments that have run this country. If we have achieved our targets, the issue of decayed infrastructure and low academic standards, wouldn’t arise, which means there is a problem there, so we don’t need anybody from the establishment to come and be the main paper presenter of this lecture.

Equally, we don’t want somebody from the extreme left who will say everything the government has done is wrong because he is not in power, even the oxygen we breathe, the government should have given us mask to go through filthy and dirty areas as an evidence to show that the government is responsive,  we want somebody who has gotten international acclaim for his objectivity and fairness and of course, honesty in criticism, who has remained virtually untouched by all the ills of the society, and when we look around, we say yes, Wole Soyinka fits into that description and so we invited him and discussed with him and he graciously accepted to be the lead paper presenter.

There is going to be lots of expectations that if somebody of Wole Soyinka’s stature should be the lead paper presenter in ICAN’s 46th annual accountants’ conference, he’s going to come up with very interesting and insightful discourse on Nigerian politics. I hope so but I don’t want to pre_empt  him.  He is at liberty to tell us what we are; I believe that Wole Soyinka will remain the same man I read about in my school days.