Enhancing Corporate Transparency Through Mandatory Identity Revalidation
Background
In Nigeria, the opaque nature of company ownership, particularly involving serving public officers, poses significant risks to accountability and anti-corruption efforts. The widespread use of cronies, relatives, and other proxies to hide beneficial ownership undermines governance and restricts fair access to public contracts.
Policy Recommendation
The Corporate Affairs Commission (CAC) should initiate a mandatory revalidation of all registered companies. This process must require each company director and beneficial owner to submit:
National Identification Number (NIN)
Bank Verification Number (BVN)
Physical Biometrics
Cross-referencing these identifiers with national databases will help identify and eliminate false or proxy ownership.
Objectives
Identify true beneficial owners of Nigerian-registered companies.
Discourage public servants from illegally maintaining stakes in private companies.
Integrate with ongoing tax reforms to ensure that ownership data aligns with exemption and tax records.
Lay the groundwork for a centralized, cradle-to-grave citizen data system.
Expected Outcomes
Reduction in conflict of interest and illicit enrichment among public officers.
Improved public procurement integrity and better-targeted taxation.
Harmonized citizen data across agencies and regulatory bodies.
Safeguards and Considerations
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Individuals whose NIN data indicate that they are underage should be automatically flagged, and their nomination for directorship rejected without immediately dissolving the company.
Companies found to be in violation should be placed under regulatory review, not arbitrarily dissolved.
Digital audit trails and AI detection systems should be used to flag suspicious patterns in director changes and identity overlaps.
A near Zero-discretion model should be adopted to limit human interference and intervention to reduce bias.
Implementation Framework
Legislative Amendment: Modify CAC regulations and related corporate laws to provide legal backing for biometric and identity revalidation.
Public Engagement: Launch a national campaign to educate businesses, investors, and the public on the importance and benefits of the revalidation.
Enforcement Rollout: Begin with companies involved in public sector bidding, then scale gradually.
Ongoing Monitoring: Establish a compliance and red-flag unit within CAC with strong investigative and enforcement powers.
Policy Flexibility
This proposal recognizes that no solution is final. Human systems are dynamic and subject to local complexities. The revalidation program should, therefore, be treated as a continuous, iterative process with room for evolution rather than a one-off enforcement action.
Conclusion
By mandating biometric and identity-based revalidation of company ownership, Nigeria will take a bold step toward curbing corruption, safeguarding public trust, and enhancing corporate integrity. Though not without challenges, this reform is essential and timely.
Dr. Yusuf Lawal fsi, FNIM
Senior Lecturer, University of Abuja, Abuja, Nigeria
