REGULATORY REGIME INHIBITS PRIVATE SECTOR GROWTH
Regulatory functions should be harmonised for better output to support industries, argues Rilwan Fash
The Bola Tinubu administration has since assumption of office been making pronouncements and effecting changes in several Ministries, Departments and Agencies (MDAs) of the federal government in furtherance of its electoral promises to provide enabling environments for private sector operators to lead the charge in revamping the nation’s economy.
While these changes are expected to ignite positive strides in regulatory functions to provide necessary encouragements to existing and prospective investors in the nation’s economy, it is also important that activities of MDAs align the economic environment to local and international best practices.
Given that a quarter of the administration’s four-year tenure is already gone, it would not be out of place to begin to examine how regulatory activities of the MDAs at the federal and state levels are impacting on the growth or otherwise of the private sector and conversely the socio-economic well-being of the people in general.
One recurrent complaint of the organized private sector in Nigeria and possibly several other African nations are ‘overregulation’ by governments and their agencies which are often linked to price increases as the perceived costs of regulation are easily passed on to the eventual consumers of goods and services.
Analysts have sometimes linked the perceived overregulation to attempts by MDAs to substantially increase their internally generated revenue due to continuous reduction in government funding year-in year-out; others point to ambiguity or overlap in legal instruments setting up the MDAs as well as overzealousness on the part of officials of regulatory institutions in carrying out their respective mandates.
Given the speed at which geographical jurisdictions are continuously getting intertwined due to globalization, it goes without saying that regulatory functions especially in developing economies like Nigeria need to the harmonized and rationalized for more efficient output to support the growth of industries in order to promote increased capacity utilization, quality and competitive products and services, thus providing the much talked about employment opportunities for the teeming youths. This no doubt will stem the tide of restiveness, the possibilities of being recruited into negative endeavors and the brain drain (Japa) syndrome.
Recent occurrences in some sectors of the economy suggests that not much has changed in wide gaps between policies objectives and implementation by regulatory authorities. Take the issue of pre-paid meters in the electricity sector as an example, differing tunes are being sung by the different DISCOs in Nigeria while the regulatory authorities seemed unable to stand their ground in ensuring that consumers get the best services possible. Efficient and effective metering should be a sine qua non, following the privatization of the sector, if the players are to properly account for services rendered against charges applied to the consumers.
Another critical area to look at is the regulation of quality of goods where the leading agencies, like Standards Organisation of Nigeria (SON), National Agency for Food and Drug Administration and Control (NAFDAC), the Nigeria Customs Service and lately the Federal Competition and Consumer Protection Commission (FCCPC) among others hold sway.
In spite of the continuous calls by organized private sector groups like the Manufacturers Association of Nigeria (MAN), the National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Lagos Chamber of Commerce and Industry (LCCI) amongst many others for harmonization of regulatory functions to reduce the burden on industry and subsequently consumers, not much seemed to have changed. These regulators are from the federal, state and even local government authorities.
Regulatory requirements demanded of industry by each of these agencies need to be harmonized including non-duplication of such essential activities like laboratory tests and analysis. The cumulative costs incurred by manufacturers in trying to meet the regulatory requirements set out by each of the agencies is enormous and need to be reviewed in the overall interest of the consumer and the nation’s economy.
I read the other day about a regulatory agency’s fact finding visits to Steel manufacturing plants across the nation to investigate perceived infractions relating to poor quality and anti-competitive behaviour following intelligence and surveillance reports. This writer learnt that not only samples of the products in question were taken but computers and even telephone handsets of operatives of the steel companies, not without obtaining a court order though.
What the regulator has done in this instance can be referred to as tactically shutting down the steel companies’ production processes which presumes guilt rather than innocence until proven otherwise as provided in Nigerian legal jurisprudence.
Regulatory activities should balance meeting standards, quality, safety, regulatory, environmental and socio-economic requirements with the provision of job opportunities and the attendant impacts down the social ladder.
The investigation being carried out on the Steel companies in this writer’s opinion, should be done in close collaboration with SON, especially issues relating to verifying the quality of the product samples taken in order to save scarce government resources.
Regulation of anti-competitive behaviour by industry should be done with care and diligence so as not to get drawn into dirty fights among industry players in trying to outplay and outwit each other.
The federal government over the decades is said to have invested billions of Naira in building laboratory competencies in such agencies as SON, NAFDAC, FIIRO, NAQS, etc., with some of them already attaining ISO/IEC 17025 (Standard for Testing and Calibration Laboratories) accreditation and international recognition status.
Thus, any of the MDAs requiring Laboratory tests and analysis in the course of carrying out its mandate should essentially patronize existing infrastructure with requisite competence as a matter of first choice, except in cases where the competency for testing a particular product is non-existent locally. This will not only save scarce resources but ensure that these existing infrastructure are put to maximum use in the nation’s interest.
Of the seven NAFDAC laboratories spread across the country, five I learnt have accreditation to ISO/IEC 17025 Standard for Testing and Calibration Laboratories. These laboratories include Food and Drug testing in Kaduna and Agulu, Anambra State; for Food testing in Oshodi, Lagos; for Drug, Vaccines and Medical Devices at Yaba, also in Lagos which also have WHO pre-qualification.
Conversely, the Standards Organisation of Nigeria Food, Microbiology, Electrical and Chemical Technology Laboratories are said to be accredited to ISO/IEC 17025 Standard for Testing and Calibration Laboratories
Also, the Nigerian National Accreditation System (NiNAS) I understand is building necessary capacities for accreditation of laboratories with the required global recognition that goes with it. The nation and especially government institutions and MDAs should therefore patronize such services going forward rather than spend our scarce resources on similar but not necessarily superior services from outside the country.
Another issue in focus is the avoidable amount of government resources being expended on procuring management systems training and certification services from abroad that are readily available in Nigeria both in content and global accreditation and acceptance. One good example is the SON accredited management systems training and certification services in the renowned ISO Quality (QMS), Environmental (EMS), Food Safety (FSSM) and Occupational Health and Safety (OHC Standards, amongst others.
The SON, I understand, has for decades developed competencies including obtaining and maintaining international accreditation and recognition for training and certification to these global standards and even helped to set up standards institutions encompassing training and certification structures in three sister African countries, namely Gambia, Sierra Leone and Liberia.
Given the above, no agency of the federal government should expend resources in patronizing any, other than these accredited competencies nor even attempt to duplicate capacity in any of the existing competencies, thus expending scarce foreign exchange for such services that SON, NAFDAC, FIIRO and other agencies with similar competencies can creditably render.
One of the challenges the current administration of President Bola Tinubu must confront head-on is in harmonizing and rationalizing government regulatory structures to achieve greater efficiency and effectiveness to provide the much needed enabling environment for the private sector to thrive, in furtherance of the Renewed Hope Agenda.
Fash writes from Lagos
