On February 14, 2023, His Excellency President Muhammadu Buhari, GCFR, signed the Business Facilitation (Miscellaneous Provisions) Act 2023 into law. This Act, also known as the “Omnibus Act,” is a crucial part of the Federal Government’s efforts to bolster the growth of MSMEs in Nigeria. The Nigerian government has taken a significant step towards improving the country’s business environment by enacting a law that reforms 21 business-related laws and reduces bureaucratic obstacles. This Act aims to enhance the ease of doing business in Nigeria and create a favourable environment for businesses to thrive.
In this article, we will delve into the provisions of the Act that apply to business owners and the implications of the new provisions. We will highlight some of the laws that have been amended to make it easier for small and medium-scale business owners to operate in Nigeria.
1. Importance of Service Level Agreement: One of the significant provisions of the Omnibus Act is the requirement for Ministries, Departments, and Agencies (MDAs) to create Service Level Agreements (SLAs). The SLAs must include a list of the goods and services provided, the documentation required, the deadlines for processing applications, any fees that may apply, the application process, redress mechanisms, and any other requirements that the MDA deems necessary. An MDA would be required to process applications in accordance with its SLA. The SLA is intended to make the public aware of the roles played by the pertinent MDAs and their operational processes. This provision is a welcome development as it makes it easy for people to know the processes involved in getting a license or permit.
2. Transparency and Accountability: Another significant provision of the Omnibus Act is the requirement for MDAs to publish a comprehensive list of prerequisites for using any goods or services at the MDAs’ designated offices and helpdesks, as well as on their websites. The confirmed and updated publication of the list is the duty of the Chief of an MDA. In case of any conflict between a published list and an unpublished one, the published list takes precedence. Additionally, MDAs must specify the period for the delivery of their services and goods. If an MDA fails to notify the applicant of its approval or rejection of the application within the specified period, the application is deemed authorized and granted.
3. Automation of Processes at the Corporate Affairs Commissions (CAC): The Registrar-General is to ensure that all application processes at the CAC are fully automated, from beginning to end, within 14 days of the Act’s entry into force. This automation of processes at the CAC will streamline operations and improve efficiency.
4. Amendment of the Companies and Allied Matters Act, 2020 (CAMA): The National Assembly has taken advantage of the Omnibus Act to make some crucial course adjustments to CAMA 2020, bringing it in line with international best practices. Notable provisions of the amendment to the Companies and Allied Matters Act include:
- reducing the time frame for submitting a return on share allotment to the CAC from one month to fifteen days;
- allowing for electronic voting or a show of hands to decide a resolution placed to a vote, and
- enabling firms to electronically serve notice to any member, not just limited to email.
5. Amendment of the Industrial Training Funds Act: The Act has modified the Industrial Training Funds Act, requiring all businesses with 25 or more employees to pay 1% of their payroll into the ITF. This replaces the previous requirement for companies with five or more employees, 50 million, or more in yearly revenue to contribute to the Fund. However, businesses registered as approved entities in any of the free trade zones are exempt from ITF contributions. This change aims to refocus the ITF regime on employee empowerment by engaging firms that should be willing to join due to their sizes.
6. Amendment of the Nigerian Promotion Commission Act: The NIPC Act has been altered to require Nigerian businesses to register with the Commission within three months of acquiring foreign participation after starting their operations. This change aims to close the gap that previously existed between the NIPC’s registration of all companies with foreign involvement and the registration of just companies having foreign shareholding at the time of incorporation.
7. Amendment of the Trademark Act.: The Trademark Act has been amended to include a definition of goods that also includes services to the definition section. This change explicitly acknowledges the use of trademarks to protect goods, which extends beyond tangible commodities to include services delivered. The Act also redefines trademark, which would help business owners with laying claims to the right to infringement.
8. Amendment of the Immigration Act: One of the most notable changes to the Immigration Act is the requirement for non-Nigerians to obtain written permission from the Comptroller General (CG) of Immigration before engaging in any profession, starting a business, buying a limited liability company, or engaging in any other activity. Previously, the Interior Minister had the authority to grant such approval. Additionally, the CG is to be notified of any changes to the business permit. This modification has limited the Minister’s authority to policymaking, and the Immigration Service is now responsible for issuing all relevant approvals for admission for business purposes.
9. Amendment of the Standard Organization of Nigeria (SON) Act: The Act gave the organization the power to investigate products sold in Nigeria and those imported into the country. The organization can now create and publish an inventory of items that need to be standardized, and register all regulated products.
10. Amendment of the National Office for Technology Acquisition and Promotion (NOTAP) Act: The NOTAP Act was modified to require every contract or agreement involving the use of trademarks, patented inventions, the provision of technical expertise, or the provision of basic or detailed engineering, entered into by a person in Nigeria with a person outside Nigeria, to be registered with NOTAP within 60 days of execution. However, firms in their first two years of operation will not be subject to late registration fines if such contracts are registered before the end of the second year of their commercial operation.
Overall, it has been a positive year for business owners in Nigeria, with the passage of the Startup Bill and now the Business Facilitation Act. The Act’s main goal is to simplify procedures for small and medium-sized business owners, which is a commendable aim. It is essential for Nigeria to attract investors by reducing bureaucratic obstacles that hinder the effective interface of government agencies with businesses. The Act’s objectives are laudable, and it is hoped that it will be fully implemented to hold government agencies accountable for efficient service delivery and create new commercial opportunities in Nigeria. However, it is crucial that the Act does not end up on the list of well-intentioned Nigerian laws that are not implemented and, as a result, are forgotten.
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