The Nigeria Employers’ Consultative Association (NECA) has strongly criticized the Financial Reporting Council of Nigeria (FRC) for imposing what it describes as “outrageous” annual dues on private and non-quoted companies.
In a statement, NECA warned that the new financial burden could cripple businesses and stifle economic growth, calling for an urgent review of the policy.
Sharp Increase in Annual Dues Sparks Backlash
The controversy stems from the Financial Reporting Council Amendment Act 2023 (FRC Act), which expanded the FRC’s regulatory reach and significantly raised annual dues for private companies.
- Previously, private firms paid N1 million in annual dues.
- Under the new structure, companies must now pay hundreds of millions of naira, depending on their turnover.
- Meanwhile, publicly listed companies’ dues remain capped at N25 million.
NECA’s Director-General, Adewale-Smatt Oyerinde, condemned the move as unjust and contradictory to the government’s efforts to improve Nigeria’s business climate, attract investment, and create jobs.
Impact on Businesses: A Threat to Survival
Oyerinde warned that private firms—already burdened by multiple taxes, regulatory hurdles, and soaring operational costs—could face closures or mass layoffs due to these excessive fees.
“This policy contradicts the Ease of Doing Business agenda and sends a negative signal to investors,” he said.
He stressed that many businesses, especially in manufacturing, trade, and essential services, operate on thin profit margins. The arbitrary increase in financial obligations could lead to job losses, business closures, and a broader economic downturn.
Furthermore, Oyerinde highlighted that regulatory unpredictability discourages both local and foreign investments, weakening Nigeria’s global competitiveness.
“If regulatory agencies can impose arbitrary levies without consultation, it erodes investor confidence and pushes businesses to the brink,” he added.
NECA’s Demands: Immediate Suspension & Policy Review
To prevent further economic strain, NECA urged the Federal Government and the National Assembly to:
- Immediately suspend the enforcement of the new levies.
- Revert to the previous N1 million fee structure until a proper review is conducted.
- Amend the FRC Act to remove ambiguities and ensure fair and transparent oversight.
Oyerinde also called for urgent dialogue between the government, the Ministry of Industry, Trade & Investment, and key stakeholders—including NECA, the Manufacturers Association of Nigeria (MAN), and the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA)—to develop a sustainable and justifiable compliance framework.
“The private sector is the backbone of our economy. Policies that stifle its growth will ultimately harm national development. The government must prioritize economic sustainability over excessive regulation,” he stressed.
With growing discontent over multiple taxation and excessive levies, pressure is mounting on the Federal Government to reconsider the FRC’s new financial demands before they further weaken Nigeria’s fragile economy.