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Accounting Firms and Local Content Act(AllAfrica Via Acquire Media NewsEdge) A group of accountants under the aegis of local/Nigerian certified and originating accounting firms recently filed a suit to challenge the domination in our country of five companies in what they consider a total breach of the Local Content Act 2010. The firms which they accuse of "parading themselves as indigenous Nigerian firms when what they are at best franchises of foreign professional firms" are: KPMG, PriceWaterhouseCoopers, Accenture, Deloitte, and Ernst & Young. The local accounting firms are also challenging government agencies such as the Securities and Exchange Commission, Nigerian Stock Exchange, Institute of Chartered Accountants of Nigeria, Corporate Affairs Commission, Central Bank of Nigeria, Nigerian Deposit Insurance Corporation, Office of the Auditor General, Financial Reporting Council, Bureau of Public Procurement, National Assembly, Department of Petroleum Resources, Nigerian National Petroleum Corporation, Nigerian Communications Commission, Federal Inland Revenue Service, etc., for allegedly breaching the law. Their argument is premised on the fact that the preamble to the Local Content Act, 2010, says very clearly: "This Act provides for the development of Nigerian Content in the Nigerian Oil and Gas Industry, Nigeria Content Plan, supervision, coordination, monitoring and implementation of Nigerian content." The purpose of that provision, according to the accountants, "is to develop local skills, facilitate technology transfer, ensure optimum use of local manpower and local manufacturing in the Nigerian Oil and Gas sector. While the mechanisms for ensuring that these objectives are met have been put in place, the degree of implementation on the other hand has however been low." They argue further that the Nigerian government set a minimum local content target of 40 per cent by 2007 and 70 per cent by 2010 for all works and contracts to be undertaken in or on behalf of all oil and gas companies operating in the Nigerian oil and gas industry, a target that has been met in breach. We agree with these accountants who run indigenous firms that the provisions of the Local Content Act are being breached by many government institutions. Unfortunately, the problem is not restricted to the accounting profession as many other professionals face similar situation. We therefore call on the relevant authorities to ensure compliance with the law. It is even more unfortunate that the oil industry where officials make a song and dance about the act is actually where it is breached the most. Yet Section 11(1) particularly states: "As from the commencement of this Act, minimum Nigerian content in any project to be executed in the Nigerian oil and gas industry shall be consistent with the level set in Schedule to this Act." Against the background that the aim of the act is to protect Nigerian indigenous companies that are in competition with foreign companies, including those with subsidiaries in Nigeria, the idea of providing the requisite opportunity for the growth of local/indigenous firms and businesses is gradually being defeated. The aim of protecting the indigenous firms from the dominance of foreign entities is also becoming a mirage, essentially because of the failure of the relevant agencies to implement the spirit and letter of the law. It is indeed noteworthy that other countries have similar protective legislations for their indigenous and local firms/businesses. The purpose of the act, according to the accountants "is to protect as a firm or company formed and registered in Nigeria, wholly owned by Nigerians and trading in its own name without any foreign affiliations, alliances, membership or any such inferences and, association or any other such inferences". To the extent that we agree with them, it becomes indefensible that only the five listed accounting firms presently audit all the banks as well as most government institutions to the exclusion of the local/ indigenous firms in Nigeria. Copyright This Day. Distributed by AllAfrica Global Media (allAfrica.com). |