The need for nonprofit organizations in Nigeria to stick to their core mandate and avoid the temptations of being wittingly or inadvertently used for illicit activities, came to the fore recently in Enugu, Enugu State, during a two-day regulatory compliance clinic for nonprofit organizations in the Southeast region.DAMIAN DURUIHEOMA, reports.
Non-Governmental Organizations (NGOs) and Non-Profit Organizations (NPOs) play a vital role in promoting social welfare, humanitarian aid in high-risk environments, and development worldwide. As they provide public benefit, NGOs and NPOs also work diligently to respect the dignity and human rights of all people.
However, their very nature, which is relying on donations and operating in high-risk environments, makes them vulnerable to exploitation by terrorists and illicit actors, who are seeking to finance their nefarious activities, including terrorism financing and money laundering. These acts pose significant threats to societal security, stability, and the integrity of the financial system.
Across the globe, cases abound where NGOs and NPOs, unwittingly or otherwise, became conduits for illicit funds. This, expectedly undermines credibility of such organisations and not only compromising their essential work but that of others.
Worried by the severe consequences of NGOs and NPOs possibly being compromised, one of the leading civil society organisations in the country, the Spaces for Change (S4C), in collaboration with the South Sahara Social Development Organization (SSDO), held a two-day regulatory compliance clinic for nonprofit organizations in the Southeast geopolitical zone.
The two-day retreat, which was held in Enugu, between October 17 and 18, drew representatives from various sectors, including health, education, research, community development and the media. Also participated included the representatives from regulatory bodies in attendance such as, the Corporate Affairs Commission (CAC); financial institutions and the Special Control Unit Against Money Laundering (SCUML) of the Economic and Financial Crimes Commission (EFCC).
The event brought together 45 participants from 35 organizations to sharpen their skills in legal and regulatory frameworks.
It also covered a wide range of regulatory issues, from taxation and pensions to healthcare, and explored the vulnerabilities of NGOs and NPOs to terrorism financing and money laundering. It furthermore discussed practical strategies for strengthening their resilience as with other governance-related matters.
The Executive Director of Spaces for Change, Victoria Ibezim-Ohaeri, explained that the clinic was designed to help nonprofits, both national and international, to navigate the complexities of regulatory compliance in Nigeria.
The clinic, according to her, served as a crucial platform for nonprofits in the Southeast region to enhance their operational standards, ensure compliance with regulatory bodies and improving transparency and accountability among non-government organisations.
“The essence is to equip organizations with the resources, skills, and knowledge they need to run efficient, transparent, and accountable institutions,” she said.
She explained that the participants, largely made up of non-governmental organizations (NGOs), were eager to strengthen their internal control systems and gain a deeper understanding of the legal and regulatory requirements applicable to their operations.
“They want to know the laws and adhere to those regulations, so they will be capable and strong enough to continue delivering their charitable and humanitarian activities.
“Complying with these regulations is not easy—it comes with costs, burdens, and human resource challenges.
“We want to understand these challenges so we can provide feedback to regulatory bodies and find ways to address them.”
Ohaeri emphasized that many NGOs often make compliance mistakes out of a lack of knowledge.
“The gap in knowledge is why the clinic was developed. Many of the mistakes some organizations make are innocent mistakes, coming from not knowing the right thing to do.
“By realizing the right steps and starting to follow them, we are addressing the issue,” she noted.
On her part, the Finance and Administration Manager of South Sahara Social Development Organization, Udoamaka Okoye, highlighted the importance of such events in educating NGOs about compliance.
“Today, we are collaborating with Spaces for Change to gather NGOs in the Southeast and talk about the importance of compliance and legal requirements as it relates to NGOs,” she said.
Okoye shared her organization’s recent success in meeting regulatory standards, saying, “We went through the assessment of the Enugu State Internal Revenue this year, and by the grace of God, we scaled through with no legal issues whatsoever.”
She also pointed out the lack of awareness among some NGOs about the requirements they must fulfill.
“There is a gap in understanding what they need to do in terms of documentation, filing, and paying taxes, among other things.”
One key question raised during the clinic was how to differentiate genuine NGOs from fraudulent ones.
Addressing the question, Okoye emphasized the role of the Corporate Affairs Commission (CAC) in ensuring transparency.
“If an NGO is not on the CAC portal, you know that the person is just a fraudster.
“For any donor to give you money as a nonprofit, you need to have systems in place to account for those funds. If you fail to do so, you will be blacklisted from receiving future donations from international organizations and philanthropic bodies”, she said.
As Okoye put it, “The importance of this seminar is to make us aware of the implications of not being compliant. That is why we are here today.”
One of the guest speakers, Mrs. Ibinabo Mary Amachree of the Special Control Unit against Money Laundering(SCUML), Abuja the programme was necessary at a time when Nigeria was putting all hands on deck to ensure that the country was not in the Financial Action Task Force (FATF) list.
She mentioned that the event was one of the activities that would showcase strong collaboration between competent government authorities and self-regulating bodies, such as NGOs and NPOs, to address the issues of money laundering and terrorist financing.
Speaking on the risk-based supervision and monitoring of at-risk NPOs, Ibinabo noted that SCUML had already introduced regulations to supervise and monitor Non-Profit Organizations (NPOs) at risk of terrorism financing abuse.
She added that the objective of the new regulation is essentially to prevent exploitation of NPOs for terrorism financing and money laundering.
While identifying high-risk NPOs based on location, activities, funding sources and governance structure, Ibinabo emphasised that it is compulsory for all NPOs to register with SCUML.
While noting that the Southeast geopolitical zone does not have at risk NPOs, the SCUML official however stressed that they need to imbibe the overall regulations because as NPOs and NGOs, they can move from one point to another.
“It is very important to note that you ad NGOs and NPOs must ensure that the work you do, your goodwill and everything is not being used to support and fund terrorism and money laundering,” she said.
Similarly, speaking on regulatory compliance under the Companies and Allied Matters Act(2020), Mr. Auwal Sani of the Corporate Affairs Commission (CAC), advised NGOs and NPOs ensure early filing of their returns and any changes as well their biannual reports and disclosure of beneficial ownership of their entities.
Non-compliance to some of the regulations, Sani warned, would result in inactive status of their organizations, a development, he said usually leads to loss of business opportunities and recognition, among others.
On the formation of trustees, he emphasised the need for vision bearers to bring people that share similar aspirations and goals on the board, warning, “Don’t attach emotions in the choice of your BOT so that you won’t have the need to remove him or her, an attempt that is usually very difficult.
“Again, filing of whatever returns or report is not an option but a necessity. So, you have to do it and the safest way to do it is to have a functional secretariat,” he said.
One of the participants, Executive Director, Women Empowerment and Peace Building Initiative (WEPBI), Ijeoma Joy Oguadimma, commended the organisers of the programme and the guest speakers for enriching their knowledge.
“The Regulatory compliance clinic is such a wonderful training. There are lots of things I didn’t know before now, especially as it has to do with the regulations by the CAC ”, she said.
Speaking on importance of the clinic, she added, “There are lots of regulatory compliances to go home with, because during the training, one of the speakers spoke extensively on compliance.
“A lot of things I wasn’t doing rightly before now, but I will go and work on them. I will make sure I do a step down to training.
“Again, I never knew we can easily be used for money laundering and even terrorism financing. I think I’m now in a better position to adopt more operational safeguards to avoid being caught up in that web”
