Nigeria was ranked 169th out of 190 countries in the World Bank Ease of Doing Business Report released recently. Obviously dissatisfied with its position on the index, the Nigerian government triggered a flurry of activities aimed at ensuring that the country moves up in the ranking.
Fast forward to today. The Presidential Enabling Business Environment Council (PEBEC) is charged with the task of ensuring this happens, and has as its vision the rapid improvement in Nigeria’s business environment to ensure the country moves up the ranking to a target minimum position a of 100th in the World Bank’s ‘Ease of Doing Business’ index by 2019. The council’s goal is to make it easier for Micro, Small and Medium Enterprises (MSMEs) to do business in Nigeria. As straight forward as this may sound, there are quite a number of issues to be tackled to achieve the desired result.
The PEBEC, in promoting its drive of improving the business environment in Nigeria, on February 21, 2016, approved a 60-Day National Action Plan on the Ease of Doing Business with clear deliverables and timelines for the Ministries, Departments and Agencies (MDAs) responsible for implementing the items in the Plan.
The National Action Plan focuses on the following key areas:
The Enabling Business Environment Secretariat EBES identified 6 challenges that affect the ease of doing business in Nigeria. These include the following admissions:
To effectively address the challenges above, the National Assembly and some specific MDAs formed key strategies targeted at articulating and reducing the processes as well as the cost and time of doing business in Nigeria. The Corporate Affairs Commission is a stakeholder and has a major role to play in seeing that the time, process and cost of starting up a business in Nigeria is streamlined.
AMENDMENTS TO COMPANIES REGULATION 2012
As part of measures to begin the climb up the Ease of Doing Business rankings, the Corporate Affairs Commission (“CAC” or “the Commission”) recently introduced amendments to The Company Regulations, 2012. The amendment is aimed at increasing the ease with which business is done in Nigeria. The amendments swiftly introduced, thanks to the exercise of powers granted in Sections 16, 585 and 609 of the Companies and Allied Matters Act 2004. The Honorable Minister for industry trade and investments approved the amendments to Companies Regulation 2012 on the 5th day of April 2017, introducing marked changes in the way and speed with which the CAC would discharge its core duties going forward.
To summarize, the key changes introduced are bifurcated into two broad categories: (i) changes related to timelines for the business and service delivery by officers of the Commission and (ii) changes that focus on procedures for the delivery of applications to the Commission
Changes related to timelines for business and service delivery by officers of the Commission:
Changes that focus on procedures for the delivery of applications to the Commission
Changes pertaining to Fees:
The reforms do not just stop in the redesign of forms. The CAC offices are now open for service from the hours of 9am to 7pm daily. This means that more people can be attended to and more processes undertaken in a day.
These changes to the regulations mean that there would be a significant reduction in the time frame for registration of companies. Hopefully, the Commission’s objective of achieving the registration of companies, business names and incorporated trustees within 24 hours of submission of the application can now be achieved.
Furthermore, applications for new registration can be made to the CAC by electronic should put an end to the drudgery that plagued the process of registration of companies in the era of paper-processing. E-transacting is now a reality with the CAC and delivery of paper originals to the CAC is now required to be made only upon completion of the registration process.
Interested people can now approach the CAC to set up companies/business names/incorporated trustees without hiring the services of a go-between, as used to be the case. This is of course open to people with a specific relationship with the entity sought to be registered as already stated earlier.
Overall, the Companies Regulations as amended should help facilitate business and take the PEBEC a giant step closer to the objective of providing a friendly business environment thereby making it easier for Micro, Small and Medium Enterprises (MSMEs) to do business in Nigeria, and ultimately progressing upscale in the Ease of Doing Business Rankings.
Beyond rankings and positions, many readily agree that an improved business environment will not only encourage domestic investment in different sectors of the economy, but will also attract foreign direct investment into the Nigerian market.