‘Changing societal values, demand bane of growth-led leadership’
Tajudeen Akande is the Senior Partner, PKF Professional Services, Nigeria, a global firm of chartered accountants. With over 29 years’ experience, he had worked with other competing firms before joining PKF to become its helmsman in Nigeria. In this interview with CLARA NWACHUKWU, he talks about how current economic crisis and societal demands are putting much pressure on firms and individuals. Excerpts:
Please tell us about you and what you do for PKF Global?
I am Tajudeen Adegboyega Akande. I am a chartered accountant. I have been in the profession for the past 29 years. I started my career with a competitor DELIOTTE, in 1988, and move to KPMG in 1993. I have had to learn the ropes from ticking and bouncing. I have been in advisory services, and as a senior partner, I run the administration in Nigeria, and I represent the firm’s at the international level.
You said you’ve been working for 29 years, and looking at the profession, what are the things that have changed negatively or positively over the years?
The changes have been positive. Technology has changed the way we do things, although the principle remains the same. Accounting is about financial reporting, it is about giving stakeholders a report of what is committed to you, and to accumulate and present transactions to stakeholders. The other is from the practitioner end of it, which is about auditing. A set of accountants accumulate and present numbers, and another set checks to be sure that the numbers represent what they say it does, that is what I have been doing all my life.
I am happy you talked about what the figures represent, but these days most of the figures don’t represent what they say they represent, so what is happening to the profession?
Well, I don’t think it is strange because if these things have not been happening there would be no need to train people to check. The tendency is there in the human nature to present things and make it look either bigger or smaller than it is. The history of accounting is evolutionary; it means when some people have invested and others are managing, then you need to report and to make sure that things are correct. Of course now some figures may represent what it is not. But if we are doing our jobs efficiently the incidence of that would be very minimal.
You speak about separating the management from the shareholders, but increasingly, we are having collusion on the figures that don’t match, why is this on the increase, or is corruption taking the lead now?
It is about leadership. Good leadership is about integrity. People who want others to follow them must have integrity. The issue has to do with compromise. But this is may be linked to pressure. There are pressures here and there. The way the world system is parked could be a reason. You have people who are given jobs to do and are also given targets, which are unrealistic. From the marketing executives to the CEO, are compelled to meet certain targets. Most shareholders expect so much profit and dividends. Sometimes, when the numbers do not represent what they are supposed to represent, it is not in all cases that they are pure misappropriations, some are just window dressing the numbers, and it is fraud. It is just to show results that are rosier than the actual performance. This has to do with societal pressure and the value system where everybody just wants to be known. We need to do something about our value system. Do we want means or money? Leaders must prioritise ethics and leadership and there must be monitoring system.
Do you think there are enough sanctions or deterrence in the system?
To be honest, I don’t think we have enough. What I have seen is too much celebration of discoveries; I don’t see how that will serve as deterrent. A person is accused of doing something wrong and instead of dealing with the person, the person moves to something else. We are not doing enough to be honest. We must impose sanctions, and the process must be transparent because every single issue is quickly politicised. Professional bodies, culture, legal system must be transparent so that when the person gets the sanction, there are no doubts that the person actually committed that infraction.
Do you think the new whistle blowing thing is actually going in the right direction?
I think it is a very good thing, but we must understand how the system works. The system must be robust enough and the whistle-blower must not be known or else you are in danger. You just spoke about collusion, when we were trained, the training is to introduce controls, and one of the most effective controls is segregation of duties. The essence is that if you allow one person to control and conduct transactions, it is so easy to manipulate. But if a transaction process goes through two or more people, it is more difficult. For that to happen, you need to agree to commit that irregularity and we are now talking about when such things happen on a regular basis. What are the incentives that are making people to risk discussing such issues with another person? With collusion, such misbehaviour will be a lot more difficult to detect. Every infraction is committed with the intent to cover the tracks, the only other way is to have whistle-blowers, because everything that has been processed into the system someone must know about it, and that is the whole idea of whistle blowers. But when you hear that a whistle-blower has been sacked, how do they even know who the whistle-blower is? That is dangerous and would do more damages than what we are trying to do.
How would you access the current situation in the economy?
The current situation is worrisome. It is not what it ought to be but here we are. Why do I say that? We are in an economy that has abundance of resources and should be flying by all parameters. But we are here with very high inflation, high exchange rate, high unemployment, no food etc. This is what you get when the economy is badly structured. Everything is about the structure; if the structure is different, you will get different results. What is bad in the structure of our economy is its over-reliance on a single product. That product produces about 70 per cent of government revenue, and over 90 per cent of foreign exchange earnings. Our consumption pattern is largely import dependent. You need to finance import with foreign exchange. Prices of commodities, especially oil, have come terribly low and you can’t spend the money when it is not available. That is why we have scarcity of FX; people can’t import, and if they have to do it is five times what it was. That is pushing inflation up. Cost of input is high, cost of fund and interest rates are high, businesses are in problem and that means there is constraint. I don’t think that we can continue like this for long.
What do you think is responsible for the disconnect between the monetary and fiscal policies?
You control economy on two sets of policies. The fiscal policy, which is about tax system, budgetary and all that while monetary policy has to do with interest rate, exchange rate, inflation and all that. They are not mutually exclusive. Are you removing tariff, closing borders or what? These plans through the budget put pressure on the economy. The monetary policy is the adjuster. If inflation is rising, and government releases fund, and the banking system would say there are so much liquidity in the system to push the rate up to constrain the ability of financial system. Monetary policy and the fiscal policy must be working together. The deal of having the Ministry of National Planning is to have vision, and the Finance Ministry will now put numbers to it. Then Central Bank of Nigeria (CBN) should be on the table to say, “Oh if you’re going to do much of spending, we don’t have too much.” At the table, that reconciliation should have happened. Of course it has to be balanced. You know the implications of your actions right away, so we can know what it would do to the economy so that we could come on a conserved position. What we have now are policies that are reacting; they come out and then after, we run it for two months and we see the effects, then people shout and the policy is reversed.
Since the democratic dispensation, successive governments have talked so much about economic diversification, yet we have not done anything. What is responsible?
My view is that the issue is simply about leadership. It is only an effective leader that can take you from vision to reality. All those we want to do need a leader who will drive the vision. It is not enough to have a vision; you must have a vision that is shared by everybody. So you cannot as a president and minsters believe in a vision and the people another. Parties are supposed to be based on ideology, but our situation is such that everybody is coming from different angles. Where there is no shared vision and will to carry some of those things that need to be done to get to the promise land, we wouldn’t be where we are.
You will remember Vision 2010, now Vision 20:2020. We are already in 2017, we are 17 years into the plan and those things are still on paper. If we have a blueprint, let us move in that direction. Along the line, you may have turbulence some are predictable with technology but there are still some things that must be addressed, but you can’t continue to blow grammar and expect things to happen.
The Small and Medium Enterprises (SMEs) that are expected to be the engine of growth, nobody seems to be listening to them?
No, people are listening. There have been a number of coordinating agencies for SMEs. The Bank of Industry is focusing on SMEs, and there is a fund set aside for SMEs. The issue has always been taking our vision to the point of reality. Maybe we should request for how many people have accessed the fund since they started. How many of the entities are SMEs. You see just a single person taking about N50 million. The cottage industry has factories everywhere before. Microfinance banks are not to give more than N500,000, yet you see a lot of people getting more than that. The loans given to the SMEs are very low, where people who are not SMEs are celebrated with big loans. We need people that would ensure proper implementation. Implementation is the problem; the SMEs themselves need to be guided, and mentored on what they do access. Some of them don’t have good business plans and corporate structures as well infrastructure for proper regulation. People in the sector must do this kind of thing as CSR.
How do you advice businesses to survive in these trying times?
Businesses must, as a matter of urgency, be ethical in their conduct. They must have proper rules that they won’t allow anybody to violate. The business society must have responsible followership. We must properly screen the people who want to lead the organisations for succession. We that are putting political leaders in position must have the same kind of attributes before we vote. It must not be because of sentiment, religion and tribe.
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