Following the sudden re-awakening of regulatory enforcement in the country, analysts are warning that, unless transparent due process is observed, the recent wave of enforcement involving Oando, MTN, and DAAR Communication may be construed as official tyranny.
Analysts at Financial Derivatives Company (FDC) Limited , while brainstorming during a breakfast session at Lagos Business School (LBS), were unequivocal, when the declared that, “regulatory enforcement could easily be misconstrued as official tyranny if due process is compromised”.
According to them, tyranny is defined as the cruel and arbitrary use of power.
The recent targets of regulatory enforcement in Nigeria – Oando, MTN, DAAR, have sought judicial remedies.
But some analysts Blue Print spoke with were quick at pointing out that, the case of MTN may be different. According to them, scores of MTN customers have complained of paying for MTN fines through the little value they are now getting from data services recently.
Also, the revocation of mining licenses in the upstream petroleum sector by the Department of Petroleum Resources (DPR) has raised eyebrows.
“Whilst some citizens and investors alike have (mis) judged the regulators to be unfair and the revocation of OML licenses as biased, others are of the view that if there was no wrongdoing there would be no sanctions. Nevertheless, investor protection remains the primary responsibility of capital market regulators”, said the Bismarck Rewane-led FDC.
According to Lawrence Summers (Harvard economist) and Alberto Alesina, ‘monetary discipline associated with central bank independence reduces the level and variability of inflation’. Therefore, Trump’s misguided tweets in the interest rate decision of the Fed as well as South African parliament’s decision to broaden the central bank’s mandate to encroach on fiscal roles could have unintended consequences in the long run. Central Banks must dispel any questions raised as to their independence and autonomy from both the executive arm of government and crony capitalist meddling.
Any interference in the mandate of the CBN and other regulators could have significant macroeconomic consequences and dampen investor sentiment.
