Umar Danbatta, the Executive Vice Chairman of Nigerian Communications Commission (NCC), said that the liberalisation of the telecoms industry in Nigeria has opened investment opportunities for both local and foreign companies and has so far contributed about N1.4trillion to the country’s Gross Domestic Product in the first quarter of 2016.
According to him, the industry contributes too much to the nation to be ignored and so compliance to the Industry Code is now compulsory and stricter for all network operators.
Danbatta said this during the commission’s Corporate Governance Forum on Review of the Industry Code in Lagos, where he mentioned that apart from attracting Foreign Direct Investment in excess of N38 billion and reflating the economy, the telecoms value chain continued to create significant number of job opportunities for the youth population in the country.
According to him, the telecoms sector is also leading the pack in the Federal Government’s diversification program and so it was deemed necessary for a strict implementation of the industry’s code.
“Years of operating a mono product economy driven mainly by oil revenues coupled with dwindling earnings from that sector and vicious attacks on oil installations are pushing the economy to the brink.
“Sadly, the common thread that runs through these failures, whether at the national or cooperate level is the absence of an effective corporate governance framework,’’ he said.
Tony Ojobo, Director of Public Affairs, NCC, told BusinessDay that the commission was determined to regulate the industry properly seeing that the economy is looking more towards the ICT sector and the rapid growth of telecommunications and technology is contributing a whole lot to Nigeria’s GDP.
“The code of ethics must be strictly adhered to by all operators in this industry because there will be huge penalties and punishment that will be a disincentive for anyone operating in this environment who does not abide by the rules.
“If the penalty is too low, then people can just go ahead and have infraction and keep paying the penalty,” he said
Adebayo Shittu, Minister of Communication, in his address urged telecoms industry to abide by the Industry Code, saying it would boost investors’ confidence.
He said that the main focus of the code was not to punish erring companies but to ensure coordination within the industry and abide by global practices.
“It is to ensure investors trust, corporate success, and proper incentives for stakeholders that the NCC came up with this code.
“The code will also enhance productivity, reduce to nearest minimum the corporate management risk,” he added.
Lending his voice to the importance of strict implementation of the industry code, Fabian Ojogwu, a Senior Advocate of Nigeria (SAN) said that the inability of companies to imbibe corporate governance had been consistently linked to the fact that the NCC’s code was voluntary with little or no mechanism for monitoring.
He said that the need for good corporate governance was borne out of the weak internal controls, passive stakeholders, and ineffective management of information system and power of controlling shareholders.
Ajogwu said that for applicability of the code, the commission would apply it to all public companies listed and unlisted, as well as private holding companies.
According to him, others are public entities as defined by Section 77 of the Financial Report Council of Nigeria Act.
He recommended that for success of corporate governance, emphasis should be on behavioral governance, which would help to forestall a lot of problems.
JUMOKE AKIYODE
