Regulatory agencies in Nigeria face several challenges: from gross underfunding, to interference by supervising ministries, to unhealthy relationships with the agencies they are supposed to be regulating
By Tolu Ogunlesi
In the last week we have witnessed an outpouring of sadness and rage – sadness at the lives cut short in the Dana plane crash, and rage at a country whose efficiency lies solely in its ability to sacrifice its citizens.
This incident has got me thinking about the issue of “regulation” inNigeria. A functioning state is expected to operate efficient and adaptive mechanisms of regulation and accountability, for no responsible state can afford to leave the quality of its most vital services to the whims and caprices of self-regulation, market forces and / or human consciences. The state’s monopoly on violence ought to play out again and again in its readiness to prevent abuse of licenses, concessions, privileges and public trust, and to mete out tangible sanctions to offending institutions. In the absence of deterrence, what one gets isNigeriaas we have it today: a jungle, where lawlessness is the supreme law.
In 2009 NEXT newspaper published an exposé on the then CBN Governor, Charles Soludo, in which it noted: “Mr. Soludo is seen as especially close to some of the most powerful bankers in the land… Mr. Soludo inaugurated a ritual of hopping in and out to open every bank branch in London, and accepting awards like a chieftaincy title.”
The regulator forgot his role and fell into bed with the regulated. We all know how the story ended.
The Dana crash should compel us to shine a light on the state of regulation inNigeria; from aviation to banking to food & drugs to corruption. Yes, corruption. Even corruption requires regulation, and that’s why I believe we’ve got the EFCC.
More often than not our regulators seem intimidated by the institutions they’re supposed to be regulating. What, for example, empowers the Nigerian Communications Commission (NCC) to stand up to the endless cash reserves and publicity-machine of, say, an MTN? What systems are in place to enable the NCAA prevent an airline from intimidating a pilot or flight engineer into putting a malfunctioning plane in the air? Shall we simply depend on a pilot’s instinct for self-preservation? Is that enough?
Regulatory agencies in Nigeria face several challenges: from gross underfunding, to interference by supervising ministries, to unhealthy relationships with the agencies they are supposed to be regulating. The report of the malfeasance at the Nigerian Stock Exchange under Dr. Okereke-Onyiuke’s watch is evidence of the havoc that is possible when regulators fall asleep. Judging from the impunity with which stockbrokers and the stock exchange management perpetrated gross abuses at that time, the SEC of that era might as well not have existed.
One of the revelations of the recent (botched?) capital market probe is that the commission recruited two members of staff from a leading commercial bank listed on the stock market which she is supposed to regulate. These individuals were recruited on secondment basis, which means that they remain staff of the bank, whilst working for the Commission. This instantly raises ‘conflict-of-interest’ questions, which require convincing answers.
More than anything else the regulatory landscape in Nigeria requires total transparency. The appointment of regulators ought to be subjected to proper scrutiny. My recommendation is that all persons appointed to the management of regulatory agencies inNigeriamust declare all assets and business interests at the beginning and end of their tenures.
As citizens have a role to play. We should ‘mark’ our regulators closely; in the style of no-nonsense football defenders. We also need the National Assembly to urgently pass the Whistle-blower bill (which has now scaled second reading in the House of Representatives) into law.
No doubt there is a thin line between regulation and ‘suffocation’, but I have reason to doubt that we’re anywhere near that line in this country. Instead what we currently have is a largely unregulated landscape; an array of regulators themselves in dire need of regulation.
Unless regulatory reform takes place in this country, fake drugs, failed banks, substandard degrees, dropped calls, and dropping planes will continue to be the rule, and not exceptions.
Editor’s note: Op-ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija.