Manufacturers seek harmonisation of regulatory agencies

Manufacturers, on Thursday, called for an end to the activities of multiple agencies hurting their businesses, urging the government to fix the overlaps by harmonising regulatory compliance.

Member companies of the Manufacturing Association of Nigeria, Ikeja Branch, in a meeting of CEOs and MDs on Thursday, presented their demands for harmonisation to the federal and state governments.

The manufacturers dialogued with the Lagos State Government through directors representing the state government’s Ministers of Commerce and Industry, and Environment and Water Resources.

In his keynote speech, the CEO of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said one of the biggest risks that businesses have to cope with in the Nigerian economy is regulatory risk that comes in the form of overlapping regulatory agencies.

He said, “Regulatory risk could manifest in the form of overlapping regulatory regimes, too many regulations, sporadic and frequent regulatory changes, poor interpretations of regulations and the absence of dispute resolution mechanisms between businesses and the regulators.”

Yusuf stated that instances of overlaps exist in the regulatory functions of quality and standards, environmental issues, transportation and logistics, taxation, and international trade.

He said the agencies with an overlap of quality and standards functions include the Standards Organisation of Nigeria, the National Agency of Food Drug Administration and Control, Plant Quarantine, Weights and Measures and the Nigeria Drug Law Enforcement Agency.

He decried some agencies that he claimed forced business owners to pay for flight tickets for their agents to visit foreign suppliers whose goods are imported into Nigeria for certification.

“Some of them (agencies) practically have the power of life and death over investors. Which is why engagement with the regulators is often very challenging. Some of them can be very overbearing, intimidating investors and sometimes extorting them,” the CPPE boss said.

Yusuf said the overlap in environmental issues is found among agencies including the Federal Environmental Protection Agency, The Lagos State Environmental Protection Agency and other subnational equivalents, the Ministry of Environment at the federal and state levels.

Others are the National Environmental Standards and Regulations Enforcement Agency, Lagos Waste Management Authority, and Local Government Environmental Unit.

Further, Yusuf said an overlap of functions happens in logistics and transportation, through agencies such as the Vehicle Inspection Office, Police, Federal Road Safety Corps, Lagos State Traffic Management Authority and other state traffic management agencies; Local Government Traffic officials and Task Force.

For tax administration, Yusuf said there was an overlap between the Presidential Committee on Fiscal and Tax Reforms and the other major institutions in the tax environment including the Federal Inland Revenue Service, State Internal Revenue Service, Nigeria Customs Service and Local Government Tax Units,

The CPPE CEO said the Presidential Committee on Fiscal and Tax Reforms was mandated to prune down the number of taxes to less than ten, as there are 40 different kinds of taxes and levies exacted from Nigerians currently.

Yusuf said regardless of the presidential provision, non-state actors and other regulatory agencies also impose different fees and that the Economic and Financial Crimes Commission and the National Assembly sometimes get involved in tax audits and investigations.

“All these are very burdensome to businesses. Meanwhile, practically all government agencies now have revenue targets. It aggravates costs and causes distractions for investors,” the CPPE CEO added.

Yusuf said the overlap of functions in international trade regulations is found in the Nigeria Customs Service, NAFDAC, SON, NDLEA, State Secret Service, Police, Navy, and the Office of National Security Adviser which issues End Users Certificates for a wide range of products.

Yusuf added that the Central Bank of Nigeria has its trade portal determining the value of goods, while Nigeria Customs keeps a Pre-Arrival Assessment Report.

Yusuf urged the regulatory agencies to reorient themselves and shun a culture that makes life difficult for investors by abiding by principles of good regulatory governance including integrity, accountability and transparency.

“Regulators should engage systematically with stakeholders through transparent, formal mechanisms that guard against ‘regulatory capture’ by one or more stakeholders. Compliance mechanisms should ensure that the regulator has adequate opportunities to obtain key data and opinions to underpin decision-making”, he counselled.