The Presidential Enabling Business Environment Council (PEBEC) has called for an amendment to the Financial Reporting Council (FRC) Act to reduce the council’s oversight powers over companies operating in Nigeria.
The Director-General of PEBEC, Zahrah Audu, made the call while speaking with journalists in Abuja on Friday.
Ms Audu said the current provisions of the law grant the Financial Reporting Council excessive regulatory authority over virtually every registered company in the country.
She said PEBEC, a federal agency responsible for promoting reforms that improve the ease of doing business, would continue to push for amendments to the law, particularly provisions she described as overly broad in defining the council’s oversight responsibilities.
“I am still going to push,when the next administration comes in, God willing, for us to have a bill that amends some parts of the Financial Reporting Council, because when I looked at it, categorically, there are some parts of it that we just couldn’t justify.
“There are some elements within the Financial Reporting Council Acts that were a bit over the top. I think the language that was used within the bill made it appear that they had the right to have some level of oversight over almost every company in Nigeria, because it said something along the lines of every legal entity.
“As long as you have a CAC registration, you’re a legal entity. So that language was a bit… you know. So, some of those things, we will not just stop where we are. We will continue to push until we get it right. So these are things that we are looking at,” she said.
She also disclosed that PEBEC recently intervened to halt the implementation of new levies proposed by the Financial Reporting Council on businesses.
The DG said her agency engaged stakeholders after complaints from the private sector and succeeded in getting the proposed charges suspended.
“The Financial Reporting Council, which came up abruptly with some new levies that they wanted to charge the businesses, PEBEC intervened, and swiftly we were able to truncate that, we were able to hold several stakeholder engagements, assess the whole situation, and it was suspended,” she said.
The Financial Reporting Council Act established the Financial Reporting Council of Nigeria to regulate accounting, auditing and corporate governance standards in the country. The law, first enacted in 2011 and amended in 2023, empowers the council to develop, publish and enforce accounting, financial reporting and auditing standards for public interest entities.
It also monitors compliance with the Nigerian Code of Corporate Governance, oversees the activities of accounting and auditing professionals, and conducts inspections to ensure that financial statements meet prescribed standards.
One of the council’s core responsibilities is regulating Public Interest Entities (PIEs).
Section 77 defines the PIEs to include; companies listed on a securities exchange, non-listed public companies, banks and other financial institutions and Insurance companies.
Others are pension fund administrators and custodians, government-owned entities, charities and not-for-profit organisations meeting prescribed thresholds, concessionaires and regulated utilities and other entities as may be determined by the Council from time to time.
These entities are required to file their annual financial statements with the council within 60 days after approval by their boards and are subject to regulatory reviews and compliance monitoring. Failure to comply attracts administrative sanctions and penalties.
However, the scope of the council’s authority, particularly the provision allowing it to designate additional entities as PIEs from time to time, has generated debate in recent years. Critics argue that the clause grants the council broad discretionary powers to bring more entities under its regulatory oversight.
The Act also empowers the council to collect annual dues and levies from registered Public Interest Entities. Critics contend that the imposition of additional fees and compliance charges could increase the cost of doing business and place further financial burdens on companies operating in the country.
PEBEC highlights reforms in MDAs
Speaking on the agency’s mandate, Mrs Audu said PEBEC’s reforms are improving transparency, reducing bureaucracy and making government services more efficient for businesses.
She said the agency operates a performance tracker that monitors the activities of ministries, departments and agencies (MDAs), with institutions assessed based on transparency, efficiency and service delivery
The director-general stated that the Nigeria Customs Service recorded significant improvements in simplifying cargo clearance procedures for businesses.
She added that the Nigerian Ports Authority, National Information Technology Development Agency, National Pension Commission, National Agricultural Quarantine Service and the Nigerian Communications Commission were among the agencies that have also performed well in implementing reforms aimed at improving Nigeria’s business environment.
