Funmilayo Odude, Partner, Commercial and Energy Law Practice (CANDELP)
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- Law and Society
The legislative successes of the Buhari administration 18 Apr 2023
The ninth National Assembly and the President Muhammadu Buhari administration have enacted some very important pieces of legislation. The general and industry-specific legislations are bound to have direct impacts on businesses and, therefore, the economy. The impacts of the new laws on the Nigerian business climate are likely to be positive.
Some of the general legislations include the Companies and Allied Matters Act (CAMA) 2020, signed on 7 August 2020; the Business Facilitation (Miscellaneous Provisions) Act 2023, recently signed on 10 February 2023. The legislative enactments for specific industries include the Petroleum Industry Act (PIA) 2021, signed in August 2021; the Start up Act 2022, signed on 19 October 2022; the amended Banks and other Financial Institutions Act (BOFIA), signed on 13 November 2020; not to mention the different Finance Acts which amended different tax laws in the country.
The administration cannot take all of the credit for the eons of work done on the Petroleum Industry Bill (PIB). But it is creditable for completing the task by passing the bill into law after the previous administrations had failed to do so. With the PIA came the reorganisation of the regulatory framework for the oil and gas industry. It created the Nigerian Upstream Petroleum Regulatory Commission; the Nigerian Midstream and Downstream Petroleum Regulatory Authority; the conversion of the national oil corporation into a limited liability company with commercial objectives; new impetus for gas utilisation; robust legal framework on environmental issues, such as decommissioning and abandonment of assets; host communities as key stakeholders, and legislative structure for the removal of subsidy.
The administration is also credited for the amendment of the companies law after over 20 years of the old legal regime, with provisions targeted at Micro, Small and Medium Enterprises (MSMEs), recognition of single-shareholder companies, creation of other corporate structures such as limited partnerships and limited liability partnerships, and provision of business rescue arrangements for insolvent companies. The Start up Act creates a legal framework for the start up ecosystem in Nigeria and is expected to drive growth in the tech industry upon full implementation.
The Business Facilitation (Miscellaneous Provisions) Act advanced some of the several policies implemented by the Presidential Enabling Business Environment Council (PEBEC). Its provisions remove bottlenecks in the bureaucratic processes in dealing with government ministries, departments, and agencies (MDAs) with a view of improving public service delivery. The new legislation amends about 21 business-related laws with a view of improving efficiency. Some of the provisions deserve to be highlighted here as they introduced changes that will impact how the bureaucracy functions amid doubts about the prospect of their successful implementation.
The success of the Act depends on the extent to which MDAs are willing to create, innovate, and implement efficient processes to comply with the provisions of the Act. Therefore, the Act ingeniously creates mechanisms for its own implementation. One of the innovative ways it does this is the automatic approval of applications that have complied with the stipulated processes and have not received any response within the stipulated timeframe.
Under the Act, MDAs of the federal government who provide products or services, such as permits, licenses, waivers, tax related processes, filings, approvals, registration, certification etc., must publish a complete list of requirements to obtain the products or services, including the prescribed fees and timelines for processing of the applications for such products and services. The requirements are to be published on the website of the MDA and also be made available at the customer help desk or office designated for that purpose at the MDA. Governmental establishments are also required to maintain at least two modes of communication of its official decisions to applicants, including publishing same decisions on their website.
The Act expressly provides that where there is a conflict between a published and an unpublished list of requirements, the published list shall prevail. The Act enjoins the heads of MDAs to verify the published lists and keep them updated.
The Act also provides for automatic approval of an application where the relevant MDA failed to communicate an approval or rejection of an application within the timeline stipulated in its published list. An applicant may in such a situation notify the relevant MDA for the issuance of a certificate or document in evidence of the grant and the MDA is mandated within 14 days to issue the certificate or document. Where the MDA fails to issue the certificate or document, the notification to the MDA for the issuance of the certificate or other document evidencing the grant shall be construed as a certificate or document in evidence of the grant. Furthermore, the Act makes the failure of an officer in an MDA to act on an application within the timeline stipulated without lawful reason a ground for disciplinary measures for misconduct.
These provisions, though not without implementation challenges, are creative ways of ensuring compliance by officers in MDAs and protection of applicants by creating the right of automatic approval of applications.
Another innovative aspect of the Business Facilitation (Miscellaneous Provisions) Act is the creation of a single interface for multi-department engagements. These one-stop shop provisions simplify processes and would greatly reduce corruption and touting. The Act provides that: “For the purposes of one government, where an applicant requires service from an MDA, the MDA shall conduct the necessary verification or certification from relevant MDAs, in respect of the applicant.” This would definitely require further collaboration and creation of systems and processes between MDAs to ensure implementation . It would, however, have an enormous impact on transparency and efficiency of processes upon implementation, and would thus be worth the efforts to create such systems and processes.
The Act provides that: “All relevant MDAs at the airports shall within 30 days of the commencement of this Act, merge their respective departure and arrival interfaces into a single customer interface.” For the ports, the Act provides that: “All agencies present in Nigerian ports shall, within 60 days from the commencement of this Act, harmonise their operations into one single interface station domiciled in one location in the port and implemented by a single joint task force at all times, without prejudice to necessary procedures which may be utilised at the backend.” This new single interface station at each Nigerian port “shall capture, track and record information on all goods arriving and departing from Nigeria and transmit captured information to the head of the relevant offices and the head of the National Bureau of Statistics on a weekly basis.”
The Act further mandates the Registrar-General of the Corporate Affairs Commission (CAC) to, within 14 days of the commencement of the Act, ensure that all application processes at the CAC are fully automated from the start to completion. It is safe to say that the CAC is well on its way to a fully automated end-to-end process. It has successfully achieved this for pre-incorporation and incorporation applications and a number of post-incorporation applications.
The implementation of the Business Facilitation (Miscellaneous Provisions) Act would be a game-changer in transparency and efficiency of processes at governmental agencies. State governments seeking to attract investments into their jurisdictions should domesticate the provisions of the Act to create efficient systems and processes within their parastatals and agencies.
Shortly before the submission of this article for publication, President Buhari on 17 March 2023 signed 16 constitutional amendment bills into law. Notable amendments in the fifth alteration to the constitution include the bill on financial independence of State Houses of Assembly and State Judiciary. The bill to provide similar financial and legislative autonomy for local governments did not pass the required votes from the state assemblies.
The fifth alteration also moved some items from the exclusive legislative list to the concurrent lists, thereby giving state assemblies the power to legislate on them. The term ‘prisons’ in the exclusive legislative list has been deleted and “Correctional Services” has now been introduced in the concurrent legislative list. The item “railways” has also been moved from the exclusive legislative list to the concurrent legislative list. The amendment also allows states to generate, transmit, and distribute electricity in areas covered by the national grid.
The fifth alteration also mandates the president and governors to submit the names of persons nominated as ministers or commissioners within 60 days of taking the oath of office for confirmation by the Senate or State House of Assembly. These are progressive provisions.
President Buhari also signed the Copyright Bill into law in March 2023. However, it is disappointing that the fifth alteration missed an opportunity to settle the Value Added Tax (VAT) controversy.
In conclusion, these laws provide a strong legislative framework for improving the country’s business environment. While there is still work to be done in infrastructure development, human capital development, security, access to credit, and dispute resolution, development of legislative frameworks ensures continuity of policies across administrations.
Funmilayo Odude is a Partner at Commercial and Energy Law Practice (CANDELP).