Why foreign investment is lagging in Nigeria -ACCA

The Association of Chartered Chartered Accountants (ACCA) said that Foreign Direct Investment (FDI) in Nigeria has not increased in recent times due to the delay in issuing financial statements by many public sector agencies.

The ACCA National Head, Mr. Tom Isibor disclosed during the Learning and Practical Development Program, on the topic: “Timely Submission of Financial Statements by Ministries, Departments and Agencies (MDAs) which was organized by ACCA in collaboration with the Financial Reporting Council (FRC) of Nigeria and the Office of the Accountant General of the Federation (OAGF) on Thursday at One Man Village, Nasarawa State.

“The delay or non-submission of financial statements has great implications for foreign direct investment (FDI) in Nigeria,” Isibor said.

According to the ACCA Country Head, Nigerian public sector actors should prepare themselves as since the outbreak of COVID-19, there had been new demands on public sector organizations and public financial management to improve transparency, accountability and sustainability.

He said: “And this is mainly coming from investors, people, individuals, organizations and governments who want to bring money into the Nigerian economy, but they want to see how we manage our public accounts and want to see what our spending pattern is before they feel confident and comfortable bringing money into the economy.

Meanwhile, a total of 120 public institutions comprised of parastatals, agencies and government business entities filed their financial statements with the FRC in 2021.

The Executive Secretary/Chief Executive of the Financial Reporting Council (FRC) of Nigeria, Mr. Shuaibu Ahmed, who revealed it at the event, described it as modest progress.

Ahmed said the FRC was working with the National Assembly and other relevant agencies to establish a rule that budget proposals from public sector entities that failed to complete their annual financial statements (AFS) for the previous year would not be not reviewed and approved for the coming year.

He said, however, that plans had been reached to impose more fines and penalties on agencies that failed to comply with financial regulations in accordance with the provisions of the FRC law and its rules.

He added that most of the financial statements filed with the board are not timely.

Isibor said the program seeks to find solutions to all the issues that militate for the timely return of audited financial statements among public institutions.

But the FRCN boss said a situation where critical government institutions, some of which are top regulators, are more than two to three years behind in their audited accounts will no longer be tolerated in the future.

He, however, noted that the council was not indifferent to the difficulties faced by MDAs in timely accessing their monthly bank statements with the Central Bank of Nigeria (CBN) since the launch of the Treasury Single Account (TSA).