Uncapped
Nigeria's manufacturers criticise the Financial Reporting Council of Nigeria Amendment Act, 2023, for imposing uncapped annual charges.
The Manufacturers Association of Nigeria (MAN) has criticised the Financial Reporting Council of Nigeria Amendment Act, 2023, for imposing uncapped annual charges on non-listed companies and significantly increasing fees for listed firms. MAN’s Director-General, Segun Ajayi-Kadir, warned that the law’s strict penalties could deter investment and worsen economic challenges. He urged the FRCN to suspend implementation and align with tax reforms. Meanwhile, China and India remained Nigeria’s top trading partners in Q4 2024, with China leading at 27.80% of imports (₦4.61 trillion), followed by India at 11.43% (₦1.90 trillion), supplying key industrial and consumer goods.
Nigeria's manufacturing sector, already battling foreign exchange volatility, high costs, and infrastructure gaps, faces further strain from the FRC's expanded powers. The FRC, seemingly engaged in a regulatory sanction race, has broadened its remit beyond traditional financial oversight. This expansion, enabled by the 2023 Amendment Act, includes a dramatic fee increase for listed companies, from ₦1 million to ₦25 million, and a wider definition of "Public Interest Entities." These changes, coupled with stringent penalties and auditor oversight, threaten to stifle businesses, particularly SMEs, potentially leading to closures and job losses.
The Act's punitive measures contradict the government's ease of doing business agenda, risking both local business scaling and vital foreign investment. The Manufacturers Association of Nigeria's call for suspension is understandable, advocating for aligned, reasonable compliance costs. This concern is heightened by Nigeria's persistent import dependence on China and India, as evidenced by Q4 2024 trade data. Heavy reliance on foreign goods, particularly essential inputs, suggests that further financial burdens on domestic manufacturers could severely undermine their competitiveness.
Instead of punitive measures, the government should prioritise policies that bolster local production, reduce import reliance, and foster business growth. This includes infrastructural improvements, access to finance, and regulatory predictability. A tiered fee structure, alongside a recalibration of the FRC Act and broader trade policy, is crucial. Regulatory oversight should support, not stifle, businesses navigating challenging economic conditions. The FRC's expanded powers may soon face legal challenges, highlighting the need for a balanced approach to regulation that fosters, rather than hinders, Nigeria's industrial development.