Mallam Isma’ila Muhammadu Zakari, President, Institute of Chartered Accounts of Nigeria (ICAN), co- founder of Ahmed Zakari & Co, discusses the problems associated with accountability system in Nigeria. In this chat, he tells GEORGE OKOJIE steps that must be taken to solve problem of accountability and other challenges confronting the Nigerian economy.
The Buhari led administration has zero tolerance for corruption and stresses the need for accountability, what is your institute doing to address this problem?
We will tackle the problem of accountability by setting up accountability Rating and Award Index. As you know, ICAN as a leading global body of accountancy profession is dedicated to accuracy and integrity and without accounting there will be no accountability. Therefore, during my tenure, ICAN would be actively involved in evolving various indices for accountability measurement. This will culminate in the rating and assessment of public sector organisations with a view to rating their compliance best practices in public financial management and international public sector accounting standards.
We shall endeavour, on an annual basis, extend the level of analysis to all levels of governance, that is, the federal, state and local government. Emphatically, during my tenure the institute will try to nurture the quality of financial reporting and governance in the public sector establishments like the federal government, state government, and other public sector organisation we are going to set up that index that will target that shows good quality accountability. And we will now rank organizations based on that.
The aim of that is to ensure we improve quality of accountability in Nigeria. We are not interested in government or praising them or whatever. Right now what we are doing is to improve quality of accountability. The standard practice is that that statement of account of government be audited by the Auditor General and the audit must be complete by the end of the month. How many government and parastatal are ready with audited account?
So when we set up that index we will make sure the federal, state, local governments accounts, national and state assemblies are in compliance with international public sector accounting standards (IPSA) as adopted. We want to now be able to measure that because we have the responsibility to ensure that those governing us are accountable. This is ICAN contribution to Nigeria economy.
With your experience in economic management will you say Nigeria is out of recession? If we are still in recession, what economic model do you think Nigeria can adopt to take it out?
My own personal take is that we are not in the same situation that we were in July 2016. As of July 2016 we were really in a serious predicament and how did we go into recession is that we didn’t manage our resources in a more efficient way and then suddenly the oil revenue we relied on which in the past was coming consistently, constantly and progressively increasing and up to a point and the market was stable and at least $100 per barrel.
And the money was coming, we were just sharing and spending the oil revenue and suddenly the market went down below $50 and the revenue went down by half, below $50. That is what has happened, it has imparted, and the government be it the federal state governments who were sharing this money now have so much expenditure to do and they cannot meet up and when there was no liquidity and money in circulation in the economy then we had a problem. And we appear to be a dollar based economy.
Our consumption pattern is that everything we are consuming appears to be something that is imported. We are not producing what we are consuming, everything we are wearing in terms of our clothes, shoes that we wear, the bags that we carry, the cars that we use are all imported, the food that we eat, rice is a more staple food we are importing it, only few people ate the locally produced rice. So our local farmers were not encouraged to produce local food everybody was importing rice.
When the core market is dollar based it means everything we are consuming is dollar based. We were depending on the dollars and when the value of naira crashed against the dollars then we entered into recession. But I believe that we are coming out of it. The president Muhammadu Buhari government is trying to revamp the economy, the Central Bank of Nigerian is responsible for the managing of monetary policy and they are also doing their own bit. The minister of Finance work to coordinate monetary policy with fiscal policy.
Since that time they have also come up with Economic Recovery Growth Plan (ERGP) and I think they are addressing the issue and that is why I am confident that we have come out of the woods and however we have not totally come out of it but there is a clear direction that we are working on an improved trajectory.
Nigeria debt profile has been rising, is this good development for the economy?
Well, the truth is that economically, there is nothing wrong with debt; the issue is the ability to service it. Right now, I think the government has no option than to borrow, they are looking at various options and just last week, the acting President signed an executive order that is encouraging people to do voluntary declaration of assets and income taxes. It is all part of it. Don’t forget also that part of what we are talking about now includes the $I billion Eurobond.
If we are going to get the loans and the cost of servicing the debt and it is within a limit, definitely economists and financial analysts of government should come up with what is called equilibrium, even in businesses there is what we call capital structure and the best capital structure is a mixture of equity and debt. There should be some level of equilibrium and government should be able to carry out that and that is why it is important for the government to implement International Public Sector Accounting Standards (IPSAS) accrual.
Because if you have accrual basis on IPSAS and the balance sheet which is the financial statement position of government, you will see all the liabilities and all the assets. If government is doing the IPSAS you will see everything, people will be able to participate, help to do the calculations, look it from various perspective that will help government. Like I said, the government has no option than to go the borrowing way. If the economy has to get going, the issues of managing repayment and service cost are key. If we do not want to do that, it is to pay our taxes. Now that the economy is recessed if they say they want to tax people there will be problem, it will look as if the government wants to increase peoples burden.
Most of the areas ICAN wants to effect changes has to do with government policies. How do you intend to achieve this?
As the 53rd president of ICAN during my tenure, we shall make sustained efforts towards building a good and harmonious working relationship with the National Assembly. The role of the National Assembly in Law making is of uttermost importance. We shall deepen our relationship and explore ways of partnering towards Law reforms that are in the best interest of Nigerians. We shall make our inputs into matters of national importance especially in the areas of financial reporting and good governance towards a better Nigeria. To achieve this objective, we shall among other measures, take a lead role in influencing public policy, standards and regulations; demonstrate leadership of the profession; engage active sabbatical participants for periodical studies and contribution to national and international debates; be a vital commentator and reliable source of trusted information for our members and the society