His Excellency, President Muhammadu Buhari, GCFR, signed the Business Facilitation (Miscellaneous Provisions) Act 2023, ("the Omnibus Act" or "the Act") into law on 14 February 2023 as part of the Federal Government's initiatives to foster an enabling environment for micro, small, and medium-sized enterprises (MSMEs) in Nigeria.
The Omnibus Act, which is a legislative intervention by the Presidential Enabling Business Environment Council (PEBEC), was presented as an Executive Bill to the National Assembly to amend 21 business-related laws, and remove bureaucratic barriers to conducting business in Nigeria.
We have highlighted below some of the key provisions of the Act as follows:
a) Service Level Agreements
Ministries, Departments, and Agencies (MDAs) are required to prepare Service Level Agreements (SLAs) which would contain a list of products and services they render, documentation requirements, timelines for processing applications, applicable fees, application procedures, redress mechanisms, and such other requirements, as the MDA may consider necessary. Products and services covered in the Act include permits, licences, waivers, tax-related processes, filings, approvals, registration, certifications and other products and services in line with the functions of the relevant MDA. The SLA of an MDA would be binding on the MDA in the processing of applications. The SLA is expected to provide clarity to the public on the functions of the relevant MDAs and their operational procedures.
b) Transparency and Efficiency Requirement
The Omnibus Act mandates MDAs to publish a complete list of requirements for obtaining any products and services offered by the MDA within 21 days from the commencement of the Act. MDAs must also publish the list on their websites and make it available at their helpdesks and other designated offices of the MDAs.
The Head of an MDA has the responsibility of ensuring that the published list is verified and updated. In any instance where there is a conflict between a published and an unpublished list of requirements, the published list would be applicable. Further, the Act mandates MDAs to stipulate the time period for the provision of their services and products. Where an MDA fails to communicate its approval or rejection of an application within the time stipulated in the published list, the Act provides that the application would be deemed approved and granted.
c) Automation of Corporate Administration Processes
The Act mandates the Registrar-General of the Corporate Affairs Commission (CAC) to ensure that all application processes at the CAC are fully automated, from start to completion, within 14 days of the commencement of the Act.
d) Amendment of Companies and Allied Matters Act (CAMA)
The recently-enacted CAMA 2020 repealed the erstwhile CAMA 1990. However, some of the provisions of CAMA 2020 required clarity or revision. It appears that the National Assembly has deftly seized the opportunity presented by the Omnibus Act to make some minor but critical 'course corrections' to CAMA 2020 to ensure that it complies with global best practices. Some of the amendments introduced under the Act include the definition of cash, financial instruments and security interest, clarification on increment of issued share capital, and provisions relating to individuals who are directors in more than 5 public companies, etc.
e) Amendment of the Industrial Training Fund (ITF) Act
The Omnibus Act stipulates that all employers with 25 or more employees are now required to contribute 1% of their payroll to the ITF. This provision amends the previous position in the ITF Act that mandated businesses with 5 or more employees, or which generate more than ₦50 million in annual revenues, to contribute to the Fund. The Act also exempts employers, which are registered as an approved entity in any of the free trade zones, from ITF contributions. This should help to refocus the ITF regime on employee empowerment by including only organizations which should be inclined to participate by virtue of their sizes.
f) Amendment of the Nigerian Investment Promotion Commission (NIPC) Act
The Omnibus Act now mandates Nigerian companies, which subsequently acquire foreign participation after the commencement of business, to register with the Commission within three months of such acquisition. This should close the gap that hitherto existed whereby only companies with foreign shareholding as at time of incorporation were registered at the NIPC, instead of all companies with foreign participation.
g) Amendment of the National Housing Fund Act
The Act has made revisions to the provision on who can contribute to the Fund. The amendment provides that any employee earning the national minimum wage and above in the public sector or that is self-employed shall contribute 2.5% of monthly income to the National Housing Fund. However, employees in the private sector may choose to contribute to the Fund.
h) Amendment to the Immigration Act
The amendment requires non-Nigerians to obtain a written consent from the Comptroller General (CG) of Immigration before they can practice any profession, establish or acquire any business or a limited liability company. Prior to now, it was the Minister of Interior that would grant such approval. In addition, the notice of any change to business permit must be given to the CG. The amendment has now limited the responsibility of the Minister to policy making while the Immigration Service is responsible for granting all relevant approvals in respect of entry for business purposes.
i) Amendment to the Industrial Inspectorate Act
The Act revised the minimum capital expenditure threshold for existing and new businesses to process and obtain Certificate of Acceptance of Fixed Assets (CAFA) to ₦5 million or as the Minister of Industries may prescribe through a Regulation. Therefore, effective from the commencement date of the Act, companies will only be required to process and obtain CAFA for fixed assets additions valued at ₦5 million and above.
j) Amendment of Other Acts
The Omnibus Act further amended Section 1 of the Export (Prohibition) Act, empowering the Minister of Finance to amend the list of goods exempted from export from Nigeria. The Act also amends the provisions of the Investment and Securities Act, the National Office for Technology Acquisition and Promotion Act, and the Pension Reform Act, amongst others, to address sundry issues relating to the ease of doing business and ensuring a conducive operating environment for businesses in Nigeria.
We commend the Federal Government for the introduction of the Omnibus Act. Some of the key issues addressed in the Act are in line with Executive Order 001 of 2017 –'On the Promotion of Transparency and Efficiency in the Business Environment'. The Act should eliminate critical bottlenecks, promote the ease of doing business in Nigeria, create an enabling business environment and stimulate investments and economic growth in Nigeria.
The Act also complements the objectives of the recently-enacted Nigeria Start-up Act 2022 in improving the investment climate and business environment in Nigeria.
The world is interconnected, and there is a global competition for allocation of resources. Therefore, it is important for Nigeria to make herself attractive to prospective investors by removing bureaucratic bottlenecks which could hinder efficient interface of MDAs with businesses, and ensure throughput. The aspirations of the Act are commendable in that regard. It is expected that the Act, when fully implemented, will achieve its mandate to hold MDAs accountable for efficient services delivery and herald new possibilities for businesses in Nigeria. Hopefully, the Act will not join the list of well-intentioned Nigerian pieces of legislation that are not enforced and have, therefore, fallen into oblivion.
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.