Good governance crucial to capital inflow, fraud reduction

Efforts by the President Muhammadu Buhari administration to reduce corruption and increase capital inflow into the country may remain a mirage without adequate plans to improve good governance in the country, experts said.

The experts, who gathered in Lagos at a seminar organised by Association of Certified Fraud Examiners, Lagos State Chapter, insisted that there is a need for good governance to boost and retain investment in Nigeria.

Indeed, considering current global economic meltdown, particularly the recession in Nigeria, both domestic and international investors are likely to shy away from countries that do not guarantee investor’s rights nor provide for adequate corporate disclosures or ensure sound board practices, the experts said.

President of the association, Godwin Oyedokun, said the public would continue to lose trust in government if the act of governance in the country is not all-inclusive, transparent and accountable, especially in the current anti-graft war.

Oyedokun said the need for good corporate governance in Nigeria, extends beyond resolving problems stemming from the separation of ownership and control, stressing that the country cannot differ in ensuring compliance in corporate governance.

“Until recently, corporate scandals were unheard of in Nigeria, and even where they were reported, no known deterrent sanctions have been meted out on the culprits. This is because Nigeria lacks the necessary political and institutional framework to enforce good corporate governance,” he said.

Deputy Director, Strategy, Organisation Research and Policy, at the Financial Reporting Council of Nigeria, Iheanyi Anyahara, said the informal nature of businesses and the high level of government ownership of enterprises pose challenges to the practice of corporate governance in Nigeria.

According to him, one of the challenges of the enforcement of corporate governance in Nigeria is the interwoven relationship between the public regulators and the private sector.

Lamenting the institutionalisation of corruption in Nigeria, Anyahara said: “For there to be effective enforcement of corporate laws, sanctions should be imposed accordingly without prejudice.”

Anyahara, who further blamed poor practice of corporate governance on poor corporate governance culture, laxity on the part of regulators, multiplicity of codes and conflicts, multiple directorship and others, said government must address the country’s weak regulatory mechanisms.

“Governance structures may exist, numerous laws and regulations against graft may also exist – though necessities – but fraud may also exist in greater quantum.

“However, only individual and collective resolve to be highly ethical and commitment can guarantee victory over the fight against fraud. Perhaps, until we all see ourselves as faithful stewards.”

One of the members of the association, Edobor Pius, noting that good governance is hard to achieve, however argued that the country must take deliberate steps to improve its practices.

Pius called on government to put in place strong controls, sound financial management and wealth maximisation techniques.