Politicians need to be financially literate, says Nigerian accounting leader

10 Jul 15

The former president of Nigeria’s accounting institute has called for a strategy to ensure politicians and other decision makers can understand financial statements.

Speaking at a panel session at CIPFA’s international seminar on July 7, Chidi Ajaegbu, an ex-president of the Institute of Chartered Accounts of Nigeria, told delegates it was “critical” to get politicians in particular, to understand the ins-and-outs of financial statements.

“The most important stakeholders are those that need information from the reporting accounting chain to make decisions and how it will impact on public finance.

“Most times they’re politicians and it’s actually really difficult to get them to sit down to understand the different numbers.

“So, I think it’s something we should focus on. It’s critical because if you are preparing a very good and credible financial statement and those that are to use it and make decisions can’t understand it then it’s as good as not been very useful. I think we would have to look at that.”

Fred Moore, chief executive officer of the Institute of Chartered Accountants of Ghana, also addressed delegates.

He offered an example of how the accounting profession could engage with the government, revealing that ICAG was in talks with one of the major media houses in Ghana to sign a Memorandum of Understanding. The aim of the partnership is to get a panel together at the end of every quarter to review the government’s plan against the budget they have set themselves, “taking the politics out of finance”, Moore said.

However, Ajaegbu questioned whether this could actually work and how both sides – the accounting institute and the government – would stay committed, saying it took governments “a long amount of time to come up with their quarterly figures”.

“In some cases it takes months and months, before you know it’s a bit late to start computing the variances,” he said.

Moore said, however, that the panel would look at the budget and what the government has actually been able to achieve, not focusing solely on the numbers as to what has been spent and not spent in the absence of full accruals.

He said this would hopefully encourage some debate as to where government should be going.

“Because what you find more often than not is that the end of the year happens, the accounts are not prepared for another six months, by the time you’ve made any informed decisions, the bus has already bolted.”

The seminar also featured presentations on the economic benefits of recruiting accounting professionals in government, by Sidwell Mofokeng, vice president of the Institute of Municipal Finance Officers in South Africa, and Arjuna Herath, president of the South Asian Federation of Accountants of Sri Lanka.

  • Judith Ugwumadu
    Judith Ugwumadu

    Judith writes about public finance, public services and economics across Cooking Recipes International and Cooking Recipes. She previously undertook reporting stints at Financial Adviser, Global Security Finance and The Sunday Express.

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