The Business Facilitation (Miscellaneous Provision) Act, 2023 (the "Act") was signed into law on 14 February 2023 to enhance the ease of doing business in Nigeria. This article examines key provisions and consequential amendments introduced by the Act and comments as appropriate.
Provisions relating to Ministries, Departments, and Agencies of the Federal Government (MDAs)
Part of the objective of the Act is to institutionalise all the reforms to ease implementation. Hence, the Act directs MDAs to, within 21 days from the commencement of the Act, publish a complete list of requirements, including timelines and fees, to obtain products and services on their website and customer help desk (the "List").
The failure of an MDA to communicate approval or rejection of an application within the timeline published in the List shall be deemed approved. MDAs are also mandated to have a service level agreement that shall provide information contained in the List as well as a summary of the application procedure, redress mechanisms, and other necessary requirements.
Further, the Acts amends certain existing laws (consequential amendments) with the aim of furthering its purpose. Some of these consequential amendments include:
Companies and Allied Matters Act 2020 ("CAMA")
- Within 14 days of the commencement of the Act, the registrar-general of the corporate affairs commission (the "CAC") is obligated to ensure that application processes are fully automated.
- The Act has amended the list of foreign companies exempted from incorporating a Nigerian entity to carry on business in Nigeria by adding foreign companies exempted under any other extant Act of the National Assembly to the list.
- Before this amendment, a company may only increase its share capital during a general meeting. Now, a company may also increase its shares by a resolution of the board of directors.
- The pre-emptive right of shareholders has been limited to the shareholders of private companies. The Act has added the word "private" to section 142(1) of CAMA thereby not making public companies under CAMA mandated to first offer existing shareholders newly issued shares. Also, the time within which to accept new shares is now 21 days and no longer within a reasonable time, thereby introducing certainty. Likewise, a company limited by shares now has 15 days to make a return on allotment as against 1 month.
- The Act has also included more technology-related provisions in CAMA such as clarifying that certificates issued under CAMA may be in physical or electronic form. Also, electronic general meetings can now be held by all companies and not just private companies. This also extends to voting during any general meeting of a company.
Customs and Excise Management Act (CEMA)
The Act introduced a technology-based platform, a single window, to be established and maintained by the Customs, Immigration and Prisons Services Board for all required documents regarding importation, exportation and, transit to be submitted to and made available. The Act also amended the Nigerian Ports Authority (Authority) Act with similar provisions.
Export (Prohibition) Act
The Act amends this Legislation by empowering the Minister of Finance with the power to vary the absolutely prohibited goods set out in the Schedule.
Foreign Exchange (Monitoring and Miscellaneous Provisions) Act ("Foreign Exchange Act")
Prior to the Act, Section 6(1) of this legislation provides that the Central Bank of Nigeria may revoke the appointment of an Authorised Dealer or an Authorised Buyer on the ground of national interest. The Act has however amended the said provision by replacing the ground of national interest with 12 other grounds such as failure to utilise the licence within 30 days.
Industrial Inspection Act
The threshold to give notice of intention to incur capital expenditure has been increased from twenty thousand naira to five million naira. Hence, any person proposing to start a new undertaking or to incur additional capital expenditure of not less than five million naira shall give notice of intention in the form specified in the First Schedule.
Investment and Securities Act ("ISA")
Prior to the amendment of Section 67 of the ISA, the position of the law, as provided under section 22 (5) of CAMA, was that private companies are prohibited from inviting the public to subscribe to their securities unless authorised by law. Now, a private company can allot its securities to the public through any lawful means as the Securities and Exchange Commission may prescribe by regulation.
National Housing Fund Act
The Act has amended the expression "basic salary of N3,000" to the "minimum wage". Going forward, only workers who earn the minimum wage shall contribute 2.5% of monthly income to the Fund.
National Office of Technology Acquisition and Promotion Act
Companies within their first two years of operation are now exempted from late registration penalties where the contract is registered before the end of their second year of operation.
Nigerian Investment Promotion Commission (NIPC) Act
Section 20 of the NIPC Act has been amended such that enterprises that have commenced business but subsequently secured foreign participation must register with the NIPC within three (3) months of such acquisition. Prior to this, the NIPC Act only mandates companies that secure foreign participation before commencement to register with the NIPC.
Pension Reform Act
Previously, Section 89(1)(c) of the Pensions Reform Act outrightly prohibited a Pension Fund Administrator from applying pension fund assets as loans and credits or as collateral for loans taken by a holder of retirement savings. However, with the amendment by the Act, pension assets are eligible for securities lending and a Pension Fund Administrator is allowed to issue a percentage of the pension assets in the retirement savings account for securities lending. Ultimately, this will lower the cost of borrowing for holders of Retirement Savings Account and could further deepen our capital market.
Standards Organisation of Nigeria (SON) Act
Prior to this amendment, the Director General could exercise his powers in relation to hazardous products without obtaining an order of the court (save for the power to forfeit products). With this amendment, the powers of the Director General in relation to hazardous products can only be exercised upon an ex parte application to the court.
Amendment of the Trade Marks Act
The Act has amended the Trade Marks Act to include services when referring to goods. Going forward, any reference to goods under the Trade Marks Act now includes services thereby widening the scope of the Act beyond tangible goods.
The Act is a welcome development in the business landscape in Nigeria, particularly for achieving more ease of doing business in the country. Interestingly, the Act made a number of attempts to promote the use of technology within the operations of MDAs. The jury is still out on whether the Act will be operationalised to its letter and achieve its laudable objectives.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.