By Providence Ayanfeoluwa

In this interview with the 59th President of the Institute of Chartered Accountants of Nigeria, ICAN Innocent Okwuosa, advised the federal government to ramp up power generation and distribution to at least 20,000kw before aspiring to be a $1 trillion economy, adding that professionals such as chartered accountants and technocrats should be engaged to man certain areas as opposed to politicians. Excerpts:

To what extent has ICAN lent her voice to this administration’s economic policies? , Are the authorities listening?

We have made our voice heard on all government economic policies, we have issued nine position papers addressing the major bold economic policies of this administration ranging from the removal of fuel subsidies, unification of exchange rate or floating of the naira, drive for foreign direct investment, application for rate review by DisCos, Government foreign currency borrowing especially the Nigerian National Petroleum Company Limited, NNPCL $3billion AFREXIM borrowing, the New Minimum Capital Requirements for Banks in Nigeria bordering on capitalization of retained earnings, hike in electricity tariff.

We organized a symposium on economic discourse and the 2024 budget and issued a communique published in the dailies. We have been at the forefront of advocacy for accountability and transparency in public finance management through the ICAN Accountability Index. ICAN-AI.

Are they listening?
Inviting us to present ICAN AI to the National Economic Council NEC means they are listening. On matters of economic policies, you don’t expect policymakers to adopt all your recommendations, hook, line, and sinkers. That some of your recommendations have not been adopted does not mean they are not listening. For example, we started the ICAN-AI in 2018. I can tell you that the public availability of PFM information has increased from an average of 35 percent in the 2019 assessment to over 55 percent in 2021.

We have seen states climb from the bottom position to 3rd position, what we are doing is building institutions of accountability and transparency and I know that creating an institution is a slow and continuous process.

What are your assessment of the economic policies of this administration in the last year and what solutions do you want to proffer?

No doubt the government has done well in churning out policies to address the challenges of the economy. The fiscal and monetary policy interventions are all right economic policies – the removal of fuel subsidy, unification of exchange rate, etc, the presidential committee on fiscal policy and tax reforms recommendations, tight monetary policies, hike in MPR CRR, bank capitalization, and BDC operation.

There is general agreement that there is massive corruption in the administration of fuel subsidies, and multiple exchange rate benefits only a few. I currently score the Central Bank of Nigeria, CBN monetary policy hiking MPR to 26.25 percent. No doubt it will help to fight inflation and attract Foreign Portfolio Investment, FPI even though seen as hot money, serves its purpose, then, of course, the bank capitalization is expected to help propel the one trillion-dollar economy proposed by President Tinubu. These are why as an institute we supported the policies in our position.

Where are they wrong?
Economic policy inadequacies; prioritization and inconsistencies; for example, hike in electricity tariff without addressing the challenges in the electricity generation, transmission, and distribution chain; removal of fuel subsidy and unification of exchange rate without addressing their impact on the economy and the poor and vulnerable citizens. Not seeing security, infrastructure, and human capital as indirect fiscal and monetary policies.

Take power for instance, If you want to have a $1 trillion economy, will this be possible on a 3,000 KW power capacity at the moment? How are you developing the necessary talent to handle that economy, stem Japa syndrome? What is the policy of this administration on the consequences of bad behavior in governance? As accountants, we talk about accountability as holding somebody to account. Policy inconsistencies like suspension of five percent excise tax on telecommunication expatriate quota levy, cybersecurity 0.5 percent levy by banks. Some will say it is evidence of government listening, but it may be evidence of a lack of adequate consultation, so can we consult more before churning out these policies?

Solution
Tackle security challenges head-on to eliminate the activities of bandits, terrorists, and kidnappers. So the economist’s assumption of ceteris parebus can hold. This will ramp up agricultural production, reduce food imports and hence pressure on the exchange rate. It will also eliminate oil theft and ramp up oil expect; Nigeria is not meeting the OPEC quota.

Create a conducive environment for the private sector to be the engine driving the economy and concentrate on regulation that embeds public interest. Ease of doing business not there.
Privatise the refineries, how can you have all the ministries and agencies with their humongous salaries, and yet no single barrel of oil is refined? Good enough, the Dangote refinery has started production. Why have the shares of NNPCL not been listed on the Nigerian Exchange?

Revisit the privatization of the power sector, declare an emergency in the power sector, and ramp up power generation and distribution to at least 20,000 KW, you can’t aspire to be $1 trillion economy and have power capacity of 3,000KW
Restructure and empower agencies for accountability and transparency in governance and ensure there are consequences for bad behavior. I prefer the term agencies for accountability as opposed to anti-corruption agencies.

President Obasanjo saw the need for these and created them, no improvement since then. One improvement I will suggest is that chartered accountants should be appointed to head some of these agencies. You know they are auditors. Rebase the economy, I mean its Consumer Price Index, CPI as this will make Nigeria the biggest economy in Africa once more after the devastating impact of naira depreciation against the dollar. The psychological feeling effect for Nigerians will be a motivation to attract investment. Create a monetary and fiscal policy coordinating committee to be chaired by the Minister of Finance and Coordinating Minister of Economy. When we visited the Minister of Finance, we were informed something like that exists, but we can’t see the committee in action. Let the committee be visible.
Implement the recommendations of the Presidential Committee on Fiscal Policy & Tax Reforms, revise the assumptions of the 2024 budget many of which are no longer realistic, think about oil budgeted production of 1.78 million barrels and actual slightly above 1.5 million barrels and budget exchange rate of N800 to the $1 compared to actual now of about N1, 468 to $1. Engage more professionals (especially chartered accountants), and technocrats to man certain areas as opposed to politicians like Obasanjo did. Consult more before policies are rolled out, and communicate more effectively.

What role has ICAN, professional accountants played in driving the economic development of this country?

The real role that professional accountants should play in governance of Nigeria is to ensure that there is accountability and transparency in what political office holders do. Chartered accountants are the gatekeepers and custodians of accountability and transparency in governance and by extension the entire economy. The most important profession in governance and the economy of a country is the accounting profession. This is because the private sector is structured for better efficiency than the public sector, accounting is the language of business, and no other profession speaks this language except accountants. If this language is employed in politics and governance, then politics and governance will begin to mirror the efficiency of the private sector.

Any country whose public sector fails to attract some of the best professional accountants is doomed to fail in its governance. One of the problems in this country is that the chartered accountant is not given his/her rightful place in public sector and governance.
Chartered accountants are the chief financial officers, CFOs in all the listed companies in Nigeria and hence the engine of the private sector economy. Similarly, in the public sector, the few chartered accountants that are attracted there are the engine of public finance management and project execution, they do the hard work and that is what distinguishes the chartered accountant from other accountants. Private and public sector drive the economic development of this country. I will say professional accountants are the engine of economic development in Nigeria not economists. Whenever a chartered accountant is called to service, he gives his best. For example, the committee that produced the popular report on rationalization of MDAs was chaired by a chartered accountant, Mr Oransaye, the first time that Nigerian produced a balanced budget was when a chartered accountant was Minister of Finance, Chief Michael Ani, a past president of the Institute.

Today, ICAN is making a huge contribution in driving the economic development of the country through the ICAN AI. The index is a framework for assessing accountability and transparency in the management of public finance in Nigeria and ranks the performance of the 36 states. Imagine the monumental economic development that could flow if all the tiers of government adopt the ICAN-AI. Similarly, we have extended this accountability and transparency to the private sector through the ICAN-NGX Corporate Reporting Award.

What challenges are you confronted with in the accounting profession globally and locally, how is ICAN supporting its members to overcome these challenges?

The accounting profession is undergoing a rapid transformation driven by technological advancements and foundational thought. For technology, one key challenge is the impact of artificial intelligence, AI and blockchain on accounting practice. They create skill gaps, requiring accountants to develop new skill sets to stay relevant in this evolving landscape. One of the things we have done in this is to partner with Microsoft to equip our members with development in this field.

So we organized a joint webinar with Microsoft, we hope deepen and extend this partnership. Another foundational challenge confronting the professional accountant is being called to lead the world in sustainability which makes the capital market and investors to think about the social and environmental impact of their operation. In this we have a saying that “only the accountant can save the world”. Because accounting is the language of business, accountants are not expected to convert sustainability issues into a language that investors and capital market can understand thereby helping them to consider these impacts and save the planet. Sustainability information therefore becomes investment decision useful information. This requires a reorientation of the profit maximization and capital that the accountants are used to. It therefore calls for new skills. So new soft and behavioural skills, critical thinking that embeds professional skepticism, and collaborative skills are required of the accountant. As far back as 2010, ICAN commissioned research on the role of professional accountants in sustainability reporting. I serve in the IFAC IPAE leading the revision of the International Education Standard to incorporate Sustainability and I am in the subgroup handling this. I have shared the outcome of our meetings with ICAN and these have been incorporated both at the IPD and CPD.

A recent survey by IFAC and PAFA on sustainability placed ICAN chartered accountants at no. 1, first in terms of sustainability awareness. We have conducted a joint awareness webinar with ACCA. The FRC has announced Nigeria’s adoption of ISSB IFRS S1 and S2 and ICAN is a member of the adoption Readiness Working Group. ICAN pioneered the formation of the Nigerian Integrated Reporting Committee which is now a technical partner to FRC in the implementation of ISSB IFRS S1 and S2 in Nigeria. On 16th and 17th May a PAFA- ICAN Stakeholders Sustainability Round Table was held as part of the information gathering to develop African strategy to support PAOs for implementation of sustainability. You see that ICAN is on top of these developing challenges in the global accounting world.
The most visible local challenge remains the balkanization of the accounting profession and practice. We have deployed engagement of all relevant stakeholders as a strategy for dealing with this. The point is that we have Mutual Recognition Agreement with some international Professional Accounting Organisations. For example, with your ICAN qualification, you can become a member of the Institute of Chartered Accountants in England and Wales, ICAEW. Same for the Chartered Institute of Public Finance and Accountancy, CIPFA, ICAEW expects that in Nigeria, ICAN members should be able to engage in all the practices they engage in UK. Anything short of that is to diminish the accounting practice of ICAN members, we operate in a global world and do compare notes. Another challenge is that most of the practices by our members are Small and Medium Practice, SMP. As such they lack the capacity to win big accountancy jobs and blame the Big 4, which is not correct. The Council through the SMP Committee has come up with many strategies to assist such members in practice. At one point we advocated for joint audit involving SMP and recently we rolled out guidelines for mergers of SMP. We have had a success story in such mergers that have given birth to SIAO. Then there is also the challenge of quacks and unlicensed practitioners. Our Professional Practice Committee has done a fantastic job this presidential year to deal with such issues.

What has been the challenging aspect of your ICAN Presidency and what do you intend to do after handover?

The most challenging aspect of my presidency is trying to let some of my colleagues in the Council see what I am seeing. These may be in the minority, but then they tend to slow your speed. Because most times they don’t see what you are seeing, so as the leader, you try to bend back and put yourself in their position, and then can you understand such behavior that distracts and then focus on what you want to achieve and never be distracted. It can be so challenging.

How will you assess ICAN’s position as a Professional Accountancy Organisation (PAO) in Africa and Globally

That is what makes the ICAN professional accountant different from other accountants.