The economic prosperity of any nation is dependent on the availability of infrastructure and services that make up the various assets owned and operated by public and private entities. These assets comprise services with economic values. Against this backdrop, speakers at the just-concluded 53rd annual conference of the Nigerian Institution of Estate Surveyors and Valuers (NIESV) in Ilorin, the Kwara State capital, stressed the need for the effective use of asset valuation and declaration in eliminating corruption in Nigeria, OKWY IROEGBU-CHIKEZIE reports.
Asset valuation can be used to fight corrupt practices such as misappropriation of funds. Asset recovery is a powerful tool in the fight against corruption. It is noteworthy that globally, corruption costs about $1 trillion yearly. Hence, asset recovery is an overlooked means of returning money to countries and people from whom it was stolen. It can be used to provide development funds in impoverished countries like Nigeria and among nations most impacted by corruption.
Corruption has been generating concerns in the nation as assets worth millions of naira are disposed as scraps and sold for peanuts. Professionals in the real estate sector say asset valuation borders on the best ways of resolving the problems impacting on the economy.
These were the focus of the Nigerian Institution of Estate Surveyors and Valuers (NIESV) 53rd annual conference held in Ilorin, the Kwara State capital, last week.
In a keynote address at the conference, a former President of Ghana, John Dramani Mahama, identified asset declaration by public officers as a potent tool for tackling corruption in the public sector.
He said corruption was a global challenge that hinders economic development, diverts investments from infrastructure, institutions, and social services, and undermines efforts to achieve other country-specific development goals and targets.
Mahama added: “The international community has embarked on a global anti-corruption fight across several sectors, including real estate.
“Real estate asset and property valuation are a critical factor in asset investment decision-making and a vital tool for the global fight against corruption.
“Considering the enormity of the consequences of perversely attributed values to assets, asset valuation deservedly demands and requires increased attention from critical actors such as the Nigerian Institution of Estate Surveyors and Valuers.
“Our fragile financial intermediation systems’ security and growth face the significant risks from poorly-done asset valuation. To remain relevant in pursuing economic and social progress and distributive justice and equity, you as professionals must rise to the occasion and create a more-responsive regime to aid Africa’s renaissance and growth.
He urged estate surveyors and valuers to work to build Africa as a centre of excellence in the asset valuation space.
NIESV First Vice President Mallam Bature Ali Muhammad said his paper entitled “Asset Valuation As Anti-Corruption Tool: The Nigerian Experience”, was aimed at examining the concept of asset-based valuation from economic views, to determine its potency as an anti-corruption tool.
He said: “The integration of economic and accounting principles of valuation to asset management is primarily focussed on estimating the true value of assets based on either historic cost or open market value using appropriate methods.
“Asset management aims directly at improving values envisaged to be derived from potential services provided by an asset though it is challenged by emerging issues of corruption which are mostly social, economic, and political in nature.
“This disturbing pattern of corruption has generated concerns bordering on the best possible ways to resolve the daunting problems impacting negatively on the economy as a result of the misappropriation of public funds. The entrenchment of asset valuation in both the public and private sector will, without doubt, prove its potency as an anti-corruption tool,” he stressed.
On how to arrive at appropriate consideration of asset, Muhammad said the financial position of any operational business is arrived at through appropriate consideration of the monetary value of tangible or intangible resources listed in the balance sheet.
Assets, he stated, are recognised by numerous attributes which make them unique from other things, some of the features include the ability for economic benefit to accrue, the possibility of ownership and control by an entity, and assets as an outcome of transactions.
On classification of assets, he said: “The economic worth of an asset is ascertained by considering the nature of the use to which it is put. Estimation of value depends essentially on the form in which an asset exists and the class to which they belong. Apparently, different asset commands different value when placed side by side in comparison.”
Stressing the importance of asset valuation in achieving a corruption-free or minimal corruption in the polity and also achieving economic growth, the NIESV boss said the aggregation of certain potential services, which represent economic elements common to assets makes them worthy of being desired.
He also noted that it is evident that all assets contain services that contribute to the creation of value. According to him, the control of an asset is such that requires an entity to exercise a certain degree of rights to its services because the value placed on an asset is generally perceived in terms of the monetary equivalent of its service potential.
On the rationale for asset valuation, he said the optimal management of an asset is best when the value of services provided is accurately estimated using quantitative models rooted in the principles of accounting and valuation. The specification of value by an organisation must be efficiently determined using the best methods and procedures in the management of assets to obtain optimum value in total, Muhammad said.
He argued that the application of valuation techniques in asset management is of great importance considering the service value of an asset and the need to quantify their economic worth in monetary terms. The valuation of an asset is undertaken in the bid to serve a specific purpose or multiple purposes at a given period. The valuation of assets owned by an entity aids the management in having a true value of their asset as the valuation of a company’s asset extends to the point where consideration is taken for depreciation and also an appreciation of the subject asset in question.
The execution of the valuation is driven towards the determination of value which serves as a decision-making tool for a pre-determined purpose, he stated.
However, Muhammad lamented that corruption, despite being a worldwide phenomenon, is predominant in Third World countries, notably in Africa and particularly Nigeria where corruption is endemic and has resulted in an upsurge of service value, and assets under the control of public entities have been frequently misappropriated by the unlawful acts of fraud, embezzlement, and other related crimes.
Also, Kwara State Governor AbdulRahman AbdulRazaq said the theme of the conference was apt as it keyed into the main focus of the All Progressives Congress(APC)-led administration in fighting corruption, an endemic problem confronting the nation.
“The theme of this year’s conference, “Asset Valuation as Global Anti-Corruption Tool: The Nigerian Experience”, is apt as it keys into the main focus of the APC-led administration in fighting corruption which is an endemic problem confronting our corporate existence as a nation. It is also a testament to the commitment of NIESV as a worthy partner of the Federal Government in the quest to enthrone a corrupt-free society through active citizen’s participation and engagement.
“Estate surveyors and valuers are experts, professionals/consultants helping citizens of a particular country understand what space there is and how it can be best developed in order that all people can live happy and productive lives.
“Specifically, the mode in which land is held, utilised, and managed in any society influences considerably the development of the society. Hence, estate surveying and valuation as a discipline or a profession is concerned with the judicious use and administration of the real estate as well as the value associated with land and the appurtenances.”
The governor, who was represented by his deputy, Mr. Kayode Alabi, said: “Since its formation about six decades ago, members of NIESV have been involved in the valuation of assets for varying purposes across the country. As such, the profession is eminently qualified to stimulate national discourse on issues involving real estate assets and the consequences for the fight against graft.
“Determination of declared values of assets is the professional responsibility of estate surveyors and valuers. It is pertinent, therefore, that estate surveyors and valuers are key players in the quest to rid Nigeria of corruption.
“As a sub-national government, the Kwara State Government under my leadership has zero tolerance for corruption. Hence, our activities in the last four years have been geared towards eliminating wastages and profligacy in governance as well as curtailing corrupt practices within our realities.
“We shall continue to partner with NIESV in the area of asset valuation, including the management of government-owned land properties in a bid to fully exploit the full potential of the membership of the profession and enjoy their professional expertise and value-adding capabilities,” AbdulRazaq added.
Earlier in his opening remarks, NIESV President and Chairman of Council Johnbull Amayaevbo said the theme of the conference was carefully chosen.
He stated that governments alone cannot succeed in preventing and fighting corruption and corrupt practices without the cooperation of the private sector.
He noted: “The importance of this year’s conference has to do with its theme. This theme is, particularly, relevant as the world continues to confront the phenomenon, which distorts policy decisions, weakens economic growth, deters investment, undermines human development, derails a country’s progress, runs counter to the basic interests and needs of the society, poses a frightening threat to economic development and social stability, with Nigeria as a perfect example.”