The Business Facilitation (Miscellaneous Provisions) Act, 2022: A Guide to the Changes in Nigeria's Business Environment.

The ease of doing business in Nigeria has been a major concern for entrepreneurs and investors for years. In response to this, the Nigerian government enacted the Business Facilitation (Miscellaneous Provisions) Act, 2022 to promote transparency, efficiency, and productivity in the country. This new law, which came into effect on the 8th of February 2023, contains various provisions aimed at simplifying the process of doing business in Nigeria, especially for small and medium enterprises (SMEs).

The primary objectives of the Act are to eliminate bottlenecks and promote the ease of doing business in Nigeria. It also seeks to amend relevant legislation to promote the ease of doing business in Nigeria and institutionalize all the reforms to ease implementation. By achieving these objectives, the Act aims to attract more local and foreign investment, create jobs, and improve the overall economic performance of Nigeria.

The Act applies throughout the Federal Republic of Nigeria, meaning all businesses operating in the country, whether they are local or foreign, are subject to its provisions. Additionally, the Act applies to all Ministries, Departments, and Agencies (MDAs) of the Federal Government that provide products and services to businesses.

This article provides an overview of the key provisions of the Act and their implications for businesses in Nigeria. It highlights the significance of the Act for promoting the ease of doing business in Nigeria, creating a favorable business environment, and improving the country's economic performance. With this new law in place, businesses in Nigeria can expect to experience improved efficiency, transparency, and productivity in their operations.

KEY PROVISIONS OF THE ACT AND THEIR IMPLICATIONS FOR BUSINESSES IN NIGERIA.

Transparency Requirement for Ministry Department and Agency (MDA): One significant provision of the Act is the transparency requirement for MDAs. All MDAs that provide products and services must publish a complete list of requirements to obtain the products and services, including all processes, documents, fees, and timelines required for the processing of applications. The list of requirements must be published on the website of the relevant MDA and be available at the customer help desk or other designated office. The head of the MDA must ensure that the list is verified and kept up-to-date at all times. This provision promotes transparency and efficiency in the process of obtaining government services.

Default Approvals: ?Another significant provision of the Act is default approvals. The Act reiterates that if the relevant MDA fails to communicate approval or rejection of an application within the stipulated timeline, all applications for products and services not concluded within the timeline shall be deemed approved and granted. This provision eliminates delays in the processing of applications and ensures that businesses can proceed with their plans without unnecessary delays.

One Government Directive: This provision aims to eliminate duplication of efforts by MDAs and streamline the process of obtaining government services for businesses. When an applicant requires service from an MDA, the MDA shall conduct the necessary verification or certification from relevant agencies, and the applicant shall not be required to repeat the same process to obtain similar service from another MDA.

Service Level Agreements: The Act requires MDAs to enter into service level agreements (SLAs) with businesses. These agreements specify the level of service that the business can expect from the MDA and include clear timelines for the delivery of services. The SLAs must be made available to the public, providing businesses with a clear understanding of the level of service they can expect from the MDA and enabling them to plan accordingly.

Single-Window System for Port Operations: Under the provisions of the Act, there is a requirement for the Nigerian Ports Authority (NPA) to establish and maintain a single-window system for all port operations. This system aims to improve the efficiency of port operations and simplify the process of importing and exporting goods.

Automation of Application Processes: The Act makes it mandatory that the Registrar-General of the Corporate Affairs Commission (CAC) must ensure that all application processes are automated within 14 days of the Act's commencement. This provision promotes efficiency and transparency in the process of registering businesses and obtaining relevant certificates.

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The Act also amends several existing laws related to business operations in the country and including the Companies and Allied Matters Act, the Financial Reporting Council of Nigeria Act, the Foreign Exchange (Monitoring and Miscellaneous Provision) Act, and the Immigration Act, etc.

Companies and Allied Matters Act: ?The Schedule to the Act outlines the amendments to the Companies and Allied Matters Act of 2020, which pertain to share capital, transfer of shares, company debts, etc.

Section 78 of the CAMA has been amended to include a new paragraph (c), which exempts companies from certain provisions of the act if they are already exempted under another Act of the National Assembly. This change provides some relief for companies that may be subject to overlapping regulations. Also, section 127 was amended to allow companies to increase their issued share capital by allotting new shares either in a general meeting or by resolution of the board of directors. This change gives companies more flexibility in raising capital.

Section 142 was amended to clarify that the provision for the sale of shares in a company only applies to private companies. Additionally, the amendment adds a new paragraph (c), which specifies that if an offer to purchase shares is not accepted within 21 days, it will be deemed declined. This change provides more certainty for companies and shareholders in the sale of shares. Moreover, section 149 specifies that the power to allot shares of a company must be vested in the board of directors either through the company's articles or a resolution passed in a general meeting. This change makes it clear that the power to allot shares cannot be exercised by directors unless explicitly authorized.

Section 154 reduces the timeframe for filing returns from one month to 15 days. This change aims to ensure that companies are more compliant with their reporting obligations. Section 171 includes a new subsection (7), which clarifies that a certificate can be in physical or electronic form. This change acknowledges the growing trend toward digitalization and provides more flexibility in issuing certificates.

Section 181 requires that when a holder of shares in a company wishes to transfer only a part of the shares represented by one or more certificates, the relevant certificates must be delivered to the company along with the instrument of transfer. Additionally, the amendment allows for certificates to be issued in electronic form, providing more flexibility in share transfers. Section 207 gives holders of a fixed charge priority over other debts of the company, including preferential debts. This change gives more protection to creditors with fixed charges.

Section 222 was also amended to provide definitions for key terms related to financial collateral arrangements, including "cash," "financial collateral," "financial instruments," and "security interest." This change clarifies the meaning of these terms and helps to ensure consistency in their interpretation. Section 240 removes the requirement that certain provisions of the act only apply to private companies. This change removes a potential source of confusion and ensures that the provisions of the act apply uniformly. Section 244 allows companies to give notice to their members either personally, electronically, by post, or to an address supplied by the member to receive notice. This change provides more flexibility in the way companies communicate with their members.

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Financial Reporting Council of Nigeria Act: The Act mandates that general-purpose financial statements be prepared in accordance with standards issued by the Council, regardless of any existing laws on financial statement form and content. The amendment to the Foreign Exchange (Monitoring and Miscellaneous Provision) Act grants the Central Bank the power to revoke licenses for authorized dealers or buyers who fail to comply with various conditions.

Immigration Act: The amendment requires entry visas to Nigeria to be issued or rejected with reasons within 48 hours and requires that all requirements, conditions, and procedures for obtaining visas be published on all immigration-related websites and Nigerian ports of entry. Additionally, the amendment allows for the establishment and use of electronic systems for the filing of immigration-related documents and grants the Service the authority to regulate such systems.

Investment and Securities (ISA) Act, No. 29, 2007: ?Section 67 of the ISA was amended by introducing a new subsection that specifies that no allotment shall be made of any securities of a company offered to the public for a subscription unless the minimum amount stated in the prospectus, which is required to be raised by the issue of share capital to provide for certain matters, has been subscribed and the sum payable on application for the stated amount has been paid to and received by the company in the case of a public company. For private companies, the Commission may prescribe lawful means of raising the minimum amount.

Industrial Inspectorate Act: Section 3 of the Act has been revised to raise the inspection fee expenditure threshold to either five million naira or the amount specified by the Minister. Additionally, the Industrial Training Fund Act has undergone an amendment, and section 6 now mandates employers with a workforce of 25 or more to contribute 1% of their annual payroll to the fund. Moreover, suppliers, contractors, or consultants with a staff strength of over 25 must fulfill their statutory obligations regarding employee training contributions.

National Housing Fund Act: ?Section 4 of the legislation has been modified to mandate employees who earn the national minimum wage and above to pay 2.5% of their monthly income into the Fund, while self-employed individuals who earn the equivalent of the national minimum wage and above must also contribute 2.5% of their monthly income. These contributions will earn an annual interest rate of 2%, and the Federal Government is permitted to provide financial assistance to the Fund. Additionally, Section 9 has been revised to specify that the minimum wage is the baseline for contributions.

The Nigerian Export Promotion Council Act: The Act outlines the establishment and maintenance of a single window to enable traders to submit documentation and data for importation, exportation, or transit to a single-entry point using information and communications technology. The documentation and data maintained in a single window will be made available to relevant authorities or agencies for examination. The inspection or examination of goods under the Act or any other law will be scheduled to ensure that the inspections or examinations by any officer and other relevant authorities are coordinated and, if possible, carried out at the same time. These amendments are expected to improve trade and make it easier for businesses to export from Nigeria.

National Office for Technology Acquisition and Promotion Act: ?The Nigerian National Office for Technology Acquisition and Promotion Act, Cap. N62, Laws of the Federation of Nigeria, 2004 has undergone an amendment that affects how companies register their technology transfer agreements.

Section 5 of the Act has been changed, specifically subsection (2), with the addition of a new phrase. The change states that companies in their first two years of business operation will not face penalties for late registration of their technology transfer agreements if they register before the end of their second year.

The amendment allows businesses a grace period during which they can register their technology transfer agreements without facing any penalties. This is significant because such agreements are pivotal in facilitating the exchange of knowledge and skills among companies and fostering technological progress.

National Planning Commission Act: The amendment has introduced a new paragraph to section 3(2) of the Act, which includes the Director-General of the Infrastructure Concession Regulatory Commission as a member of the National Planning Commission. The inclusion of the Director-General as a member of the National Planning Commission signifies the government's commitment to streamlining infrastructure development and planning processes in Nigeria. By bringing together the expertise of both bodies, the country can better plan and implement infrastructure projects that will have a positive impact on economic growth and development.

Nigerian Customs Service Board Act: ?The amendment was made to section 3 of the Principal Act, emphasizing the need for modernization and efficiency in the Service's activities. The amendment specifically adds a new subparagraph, labeled "(iii)," to paragraph (b) of section 3. This subparagraph requires the Nigerian Customs Service Board to adopt modern means of operationalization and develop regulations for the Service's activities.

The inclusion of this new subparagraph is a positive step towards enhancing the Nigerian Customs Service's operations. It highlights the importance of utilizing modern technology and practices in carrying out the Service's activities. This will help to improve efficiency, reduce operational costs and provide better services to stakeholders.

The Nigerian Investment Promotion Commission Act: The Nigerian Investment Promotion Commission Act has been amended to require enterprises registered in Nigeria, which subsequently acquire foreign participation after the commencement of business, to register with the Commission within three months of such acquisition. Additionally, the Commission has been empowered to specify priority areas of investment and negotiate specific incentive packages for strategic investments.

?Nigerian Oil and Gas Industry Content Development Act: The Nigerian Oil and Gas Industry Content Development Act has been amended to incorporate the definition of "Nigerian Independent Operators." The amendment provides a clear definition of Nigerian Independent Operators, which are companies that are incorporated in Nigeria and have at least 51% of their share capital owned by Nigerians. The inclusion of this definition in the Act aims to promote local participation in the industry and enhance the development of indigenous capacity.

This amendment is a positive step towards achieving the objectives of the Nigerian Oil and Gas Industry Content Development Act, which seeks to promote local content, create employment opportunities, and boost the economy. It will also help to attract more investments into the oil and gas sector in Nigeria.

The Nigerian Ports Authority Act: The Nigerian Ports Authority Act underwent amendments that had an impact on several sections of the Act, most notably section 7. The amendment of section 7 incorporated the use of information and communication technology (ICT) into port operations. Additionally, the amendment added three new paragraphs to this section, which include the requirement to remove unauthorized personnel from the ports, the provision of facilities for the establishment and maintenance of a single window for all operations required by the law of all government authorities and agencies in any part of Nigeria, and the harmonization of operations required by the law of all government agencies in any port in Nigeria through the single window domiciled within the ports.

The Patents and Designs Act: The First Schedule of this Act has been modified to include a new paragraph 13A, which mandates the Minister to regulate the procedure for the application, grant, use, and withdrawal of compulsory licenses.

The Pension Reform Act: ?Section 89 has been amended to allow pension assets to be eligible for securities lending and permits Pension Fund Administrators to apply a percentage of the pension assets in the retirement savings account towards payment of equity contribution for payment of residential mortgage by a holder of Retirement Savings Account and for the purpose of securities lending.

The Standards Organization of Nigeria Act: Standards Organisation of Nigeria Act has also been amended to require the organization to undertake investigations into the quality of facilities, materials, and products imported into Nigeria, establish a quality assurance system, compile and publish an inventory of products requiring standardization, and undertake the registration of all regulated products. Section 29 of this Act has been modified to grant the Director-General power to make an ex parte application to the court for an order to seize and detain hazardous products for a reasonable period not exceeding 30 days.

The Trademarks Act: Trademarks Act, has undergone modifications to include the definition of goods as including services and to redefine the words trademark.

In conclusion, the Business Facilitation (Miscellaneous Provisions) Act, 2022 represents a significant measure taken by the Nigerian government to enhance the transparency, efficiency, and productivity of the country's business landscape. The Act's goal of simplifying business operations in Nigeria and removing hindrances is aimed at attracting both domestic and foreign investments, generating employment opportunities, and enhancing Nigeria's overall economic performance. With the Act's applicability to all businesses operating in Nigeria, it is a crucial tool for creating a favorable business environment.

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?About the author:

Morohunfola Aisha is a lawyer who provides corporate advice to companies. With a legal background and expertise in corporate law and Energy law, Aisha is able to advise companies on various legal matters related to their business operations, including but not limited to compliance with regulations, contract negotiations, and dispute resolution. As a lawyer, she understands the legal complexities and challenges that businesses may face and provides practical and effective solutions to help them navigate these challenges.