Strategies businesses can adopt to minimise regulatory risks in Nigeria

Some of the key strategies to reduce regulatory risks said to be one of the top 10 business risks in Nigeria include appointing a compliance officer to engage with regulators, carrying our periodic risk assessments and developing a risk protocol to handle regulatory issues.

A survey conducted by KPMG in Nigeria on top risks in the Nigerian Business environment, of which chief financial officers of top companies in Nigeria were respondents, found that regulatory risk is one of their topmost concerns.

Ajibola Olomola, partner & head, deal advisory, tax, regulatory and people service, KPMG in Nigeria, in a keynote address at the Franco-Nigerian Chamber of Commerce & Industry breakfast meeting held in Lagos on July 12, said that the demand for regulatory compliance is rapidly increasing and so are the risks associated with failing to meet these demands.

“A recent survey showed that there are over one million businesses registered in Nigeria but only about 30,000 are reportedly filing their tax returns. So the tax authorities would be better served widening the tax net to include more Nigerians rather than imposing new taxes. This will mean that more regulatory actions would be taken to make more companies comply,” said Olomola.

According to Olomola, businesses in Nigeria have to contend with different regulatory agencies including the Central Bank of Nigeria (CBN), Department of Petroleum Resources (DPR), Securities and Exchange Commission (SEC), Financial Reporting Council (FRC), and many other agencies.

Olomola further said that Nigeria is working hard to improve its ease of doing business and creating more incentives for companies to thrive. This therefore will make it important for many companies to ramp up level of compliance

A panel discussion on improving the regulatory compliance moderated by Ijeoma Emezie-Ezigbo, associate director, deal advisory practice in KPMG in Nigeria, which had Ajibola Olomola, Ayo Salami, Tayo Ogungbenro, Temi Adepoju, all partners at KPMG in Nigeria, concluded that businesses ought to wake up to the reality of complying with regulation as the regulations would only get more intense.

“Companies have to get make sure they do a thorough analysis to challenge some rulings, if we do not have the Transfer Pricing in place, a lot of subjectivity will go on but this regulation has helped to sanitise the tax system and it has brought transparency,” said Tayo Ogungbenro.

The panel members said that it is time companies invest in compliance officers who are versed in regulations affecting the business environment and who are skilled in engaging regulators. Where the capacity is lacking in-house, companies were urged to outsource the function.

In his remarks at the event, Laurent Polonceaux, the French Consul General, said through a representative that the French government is determined to assist Nigeria in developing small business and the fight against terrorism.

Moses Umoru, acting director general of the CCFI said discussing regulatory framework was important now as Nigeria is keen on improving ease of doing business through various reforms.

ISAAC ANYAOGU