FORTY-FOUR of the largest listed companies in the Nigerian equities market have spent a total of N234 billion on professional fees. Compared to the previous year, it increased by a whopping 50.6 per cent in contrast to N155.4 billion recorded in 2022.
These professional fees included payments for legal, consultancy, non-audit and advisory, amongst other services. UBA, MTN and Seplat led the list of the biggest spenders on professional services. Organizations in Nigeria allocate substantial budgets to professional fees, and this trend is driven by several key factors, including the need for specialized expertise, regulatory compliance, strategic advisory, risk management, and the evolving business environment. For example, some firms outsource their tax management to other firms, in a bid to ensure effective tax advisory services.
In the same vein, other outsourced services include actuarial, assurance, management consulting, and business consultancy. These services are crucial for businesses to optimize their operations at various stages. Numerous companies in Nigeria offer professional services across different sectors, including legal, tax, consulting, risk advisory, financial advisory, and management consulting, ensuring that businesses can access the expertise they need to thrive.
Most accounting firms have restructured their business model beyond conventional accounting services like audit and tax advisory services to include other major non-conventional financial services. These include financial advisory, risk advisory, assurance services, consulting etc. Some of the major legal, advisory, and consulting firms in the country include Aluko and Oyebode, Templars, Deloitte, KPMG, PWC, EY, Phillips Consulting, Workforce Group, and Ascentech Services amongst others. Last week, Nairametrics presented the list of big ticket audit accounts in the country as well as the audit market share in Nigeria.
In this series, we analyse the biggest companies investing in professional services. FBN Holdings, the parent company of Nigeria’s premier bank, First Bank of Nigeria spent a sum of N18.28 billion on legal and professional services in 2023, to rank as the fifth largest spender on our list.
The professional service expenses for 2023 increased by 32.7% when compared to the N13.78 billion recorded in the previous year.
