With clarity around internal governance and controls, banks and other financial institutions have been favourably disposed towards lending to smaller companies. Small and medium companies typically struggle to comply with regulatory and governance requirements and do not establish certifiable internal processes.

Business Action Against Corruption (BAAC) – Nigeria provides the tools and templates to help businesses set up their internal policies and procedures to COSO 2013 international standards, which are recognised by banks and other financial institutions. This also applies to SMEs wanting to play in the supply chain of larger companies that care about their ethics, governance and corruption risk exposure.

The cost of employing consultants to develop policies and procedures and establish governance and controls could be pretty steep but BAAC provides access to tools, templates and guides all within an SME’s annual subscription. BAAC also puts companies in touch with vetted service providers that can assist the SME further for a small fee.

Fact is, businesses would all benefit from reduced corruption in the environment, but it has an associated cost that makes it implausible that any individual business in Nigeria will undertake to solve it alone. Collective Action helps businesses belong to a larger group that can engage more powerful actors in the environment for the benefit of all.

Very often Nigerian companies feel they are at the mercy of powerful forces working against their growth and survival and feel there is nowhere to turn to. In the end, this feeling makes them give in to corrupt demands and to using corrupt means to get ahead. BAAC is a collective action platform using member thematic groups to identify key problems and pain points of members which the secretariat then sets out to address.

In 2018, the secretariat spent about N800m on various projects to resolve complex business problems. In 2019, the budget is N1.1bn. Wouldn’t you rather belong to a group with the knowledge and capacity to engage powerful actors in the environment towards reducing the challenges to your business growth and compliance?

Due to unbridled regulatory pressure, a number of large companies faced mission critical risks in 2017 and 2018. One of our member companies, MTN Nigeria was pressured with an $8.1bn and a separate $2bn demand whilst their bankers (Diamond Bank, Stanbic IBTC and Standard Chartered Bank – two of which are our members) were debited a total of N5.1bn at source. This was resolved in the end with MTN agreeing to pay $53m however the demands could have forced the closure of the company which we do not believe was the intention, but the share value and credibility of the company could arguably have taken a hit in that period.

Regulatory actions in Nigeria are typically not coordinated, evidenced by the conflicting instructions coming from different bodies and they are typically inconsistent in application. Rules and standards are not always applied fairly nor are they always targeted at solving problems in ways that minimize unintended consequences. Communication from regulators is not always open and honest and they tend not to be accountable in their actions as they typically resist public scrutiny, often unwilling to justify actions. Regulatory frameworks are also not flexible enough to keep up with the pace of development of the industry they supervise.

Business Action Against Corruption (BAAC) has instituted a Regulatory Conversations series in which it takes up dialogue with regulatory bodies around issues of great concern to its members. BAAC acted with the series to push for a clear philosophy of regulation to be established in Nigeria. We also assist companies with corporate risk and provide a platform for assessment of corruption risk specifically which comes with subscription. Members have the opportunity to have their internal governance and controls as well as their corruption risk prevention certified by independent external assessors.

Operating in an environment where corruption is endemic, pervasive and systemic means that there is very real risk to your brand reputation. Very often those who would like to do business with you have to be extra cautious. They typically go through extended due diligence processes and require various forms of certifications from you as proof of your compliance.

Companies wishing to raise capital, do business or who for various reasons wish to signal that they comply with standards internationally are finding that they need to put in a lot more effort than the local laws or regulatory environment demand from them in Nigeria. Listed companies have typically used the Corporate Governance Rating System (CGRS) developed by us and for non-listed companies we have provided internal governance and controls, corruption risks, anti-bribery and anti-corruption (abac) certifications.

Our international linkages and networks mean that our work over the last 29years has been very widely seen and respected around the globe enabling partnerships that give international significance to the standards and certifications our members gain through us. This year we are partnering with the Center for International Private Enterprise (CIPE) an affiliate of the US Chambers of Commerce on their Ethics 1st Programme creating a database of compliant companies in Africa and the UK Government’s Business Integrity Initiative to harmonize responses to the challenge of corruption in Africa and beyond.