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corporate social responsibility (CSR) and
Exploring the Corporate Conscience
Nigeria: Legislating CSR
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By Daniel Chandranayagam
Nigeria might be the first country in the world to
legislate on corporate social responsibility (CSR). A bill,
which proposes that businesses spend 3.5% of its gross
profits on CSR, is making its way through the National
Assembly. While there have been many definitions of
“CSR”, “tax” has never been one of them, for that,
appears to be the essence of the proposed legislation.
Doing business in Nigeria is getting more expensive.
On the face of it, the Nigerian idea of “CSR” appears to
be more philanthropy-based, with some failure in
valuing CSR’s integration through the supply chain
(although labour aspects are covered in the bill). In
addition, the Nigerian government (which has proposed
the bill) seems to have overlooked that CSR means
going beyond compliance.
It has been reported that the motivation for the bill is
because CSR initiatives by companies in Nigeria are
lacking. Apparently, the country’s government has felt
that legislation and a supervisory body to enforce the
laws are adequate solutions. The bill also proposes the
establishment of a commission, whose duties include
providing standards, integrating social responsibility
and international trade issues, conducting research and
investigations into community needs, informing
businesses of requests, and ranking of organisations
according to their CSR initiatives.
The commission will also publish an annual report of
social and environmental impact of businesses’
activities, develop policies to encourage corporations to
become engaged in the community, and ensure that
companies sponsor cultural and educational activities
that add value to Nigeria’s socio-political and
technological development.
On one level, one might offer Nigerian businesses
sympathy, as they might find they have a lot on their
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plate once the bill is passed, and to add salt to the
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 wound, they might find their profits dwindling. In fact, considering that CSR levy
comes from profits before tax, SMEs might struggle to survive in the long-run.

On the next level, one wonders what to which standards the new commission might
subscribe, as many developing countries find the CSR / SRI standards practised and
required by developed nations to be far too onerous to be profitable.

Finally, it must be said that there are always ways around any law.

Criticism of the bill is rife. Nigeria has been reported to have a long list of taxes as
it is. In addition, one critichas said that the Nigerian government should consider
increasing its breadth of taxation rather than depth. Apparently, those who pay tax
in Nigeria are overtaxed, while many others are not required to pay tax at all.
It has been suggested that, rather than legislating, the Nigerian government should
try to promote CSR through persuasion and complementary activities.

Yet, it is likely that many nations are watching Nigeria, and waiting to find out if the
CSR law works. If it does, it is likely that many other countries might find similar
laws proposed and implemented over time.◊
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