By Cyril Ilayah
The entrenchment of good corporate governance standards and practices has continued to gain global recognition and acceptance as the bedrock for corporate success and business sustainability. Thus, the need for compliance to corporate governance code in an industry like the Nigerian telecom industry, which is an enabler of other industries cannot be overemphasized.
The telecom industry is re-engineering the Nigerian economy, helping other industry like the manufacturing, commerce, transportation governance to work effectively. In fact, with the aid of telecommunications, jobs are being created directly and indirectly even in the gaming industry, with the likes of bet9ja bonus helping the youths to be gainfully engaged.
The industry has matured and have prospects for more growth, compared to 2001 when the telecom industry was liberalized. Recent information from the Nigerian Communications Communications (NCC) shows that the Nigerian telecom industry has really experienced massive growth and development from every indication, contributing N1.9 trillion, which represents 10.11 percent to the country’s Gross Domestic Product (GDP).
According to the figures reeled out by the telecom regulator, investment in the Nigerian telecom industry presently stood at $70 billion. In the voice segment, Nigeria has 173 million lines as of March 2019, which translates to of 91 percent.
In broadband, Nigeria has recorded a remarkable penetration of 32.48 percent as at December 2018. Thus, surpassing the strategic national broadband plan, which prescribed penetration of 30 percent by the end of 2018. In March 2019, broadband penetration stood at 33.22 percent compared to 8.50 percent in 2015.
In 2001, Nigeria has less than 500 connected telephone lines; the Internet was also a scarce resource.
But today, the story has changed, with calls for more investment becoming more compelling, given that the telecom industry is a capital intensive. “No industry with these characteristics such as ours can be sustained over a long period of time without a corresponding injection of more investment,” the Executive Vice Chairman of NCC, Prof. Umar Danbatta argued, while giving a welcome address at a recent event.
Hence, there are concerns from stakeholders for the need to revisit the Corporate Governance Code for the telecom industry officially launched by the Nigerian Communications Commission in July 2014.
Speaking last week at the Nigerian Telecom Leadership Summit at Eko Hotel in Lagos, Prof. Fabian Ajogwu (SAN), argued that the Code of Corporate Governance will ensure that the highest standards of industry transparency, due process, data integrity, disclosure requirements, accountability, and ethics are maintained without impeding enterprise and innovation.
Arguing from the angle of law, Prof. Ajogwu, who made a presentation titled: ‘The role of the mandatory code of corporate governance in the Nigerian telecom industry’, explained that the code adopt the principles, standards and laws laid down in existing statutes in Nigeria, particularly the Companies and Allied Matters Act (CAMA), and the Nigerian Communications Act.
“This Code adopts the provisions of CAMA as it relates to directors and officers responsibilities in the licensee as baseline where the stipulations of the statute are not declaratory.In the event of conflicts between the provisions of this Code and provisions of other Regulations, the stricter provisions should be applied,” he emphasisied.
He insisted that the application of the Code must be made mandatory for all licensees that meet criteria such as spread of operations of the licensee covers a minimum of 3 geo-political zones; turnover of the licensee is in excess of one (1) billion naira; the number of staff employed is in excess of 200 and where the licenseehas a subscriber base of 500,000.
The Nigerian Communications Commission had launched the Code of Corporate Governance for the industry with the intention to present to present a win-win model of inter-relations predicated on openness, accountability, transparency and integrity.
Governance practices have evolved over time to stem the tide of emerging risks in managing businesses and to safeguard investor capital and enhance stakeholder values. In inception, compliance with the provisions of the Code was made voluntary,aimed at availing sector operators’ adoption and adaptation over time.
“We made the Code of Corporate Governance voluntary in the first instance. However, after two years of adoption of the Code, it became imperative to carry out a study to ascertain the level of adoption and compliance with the provisions of the Code,and to have key elements of the Code reviewed in the light of observed peculiarities and current international best practices” the EVC of NCC, Prof Umar Danbatta said.
He disclosed the outcome of the survey revealed that there were significant deviations from the key principles contained in the Code. A situation he noted calls for the urgent need for all operators to fully align with these principles in order to ensure that the industry moves on the same trajectory.
“It is against this background that it became imperative to move from a voluntary to a mandatory regime,” he added.
To consolidate on the gains of the telecoms sector to the nation’s economy and gain stronger stakeholders’support, the revised Code of Corporate Governance would not only assist in enhancing business prosperity and corporate accountability, but would help promote friendly investment climate.
It seeks to foster good corporate governance practices by Telecommunications entities (Licensees)operating in Nigeria. The provisions of the Code are also based on international best practices.
Other features of good corporate governance are, it provides proper incentives for the board and management to pursue objectives that are in the interests of the Company and its shareholders and should facilitate effective monitoring. It is believed that this Code of Corporate Governance will facilitate pursuit of objectives that are in the interest of the licensee, shareholders and other stakeholders in the industry.