‘Competition and consumer protection bill will break monopolies when passed into law’
Economies are ranked on their ease of doing business, from one to 189. A high ease of doing business ranking means the regulatory environment is more conducive for the starting and operation of a local firm. The rankings are determined by sorting the aggregate distance to ‘frontier’ scores on 10 topics, each consisting of several indicators, giving equal weight to each topic. The distance to ‘frontier’ score aids in assessing the absolute level of regulatory performance and how it improves over time. This measure shows the distance of each economy to the ‘frontier,’ which represents the best performance observed on each of the indicators across all economies in the Doing Business (DB) sample since 2005. This allows users both to see the gap between a particular economy’s performance and the best outing at any point in time and to assess the absolute change in the economy’s regulatory environment over time as measured by Doing Business. An economy’s distance to frontier is reflected on a scale from zero to 100, where zero represents the lowest performance and 100 represents the frontier. In this interview with JOSEPH ONYEKWERE, the vice chair, the Nigeria Bar Association Section on Business Law (NBA-SBL), Mr. Seni Adio (SAN- designate) says Nigeria’s performance on the ease of doing business is unacceptable, adding that the enactment of better legislation would improve the ranking substantially.
On the ease of doing business, what is the position of Nigeria?
Currently, Nigeria’s ranking is very poor. I think we are ranked number 169 out of 189 countries, which is not acceptable. But a lot is being done to remedy that abysmal record. Among other things, the NBA-SBL is working in tandem with the Nigerian Economic Summit Group (NESG) and a multilateral agency, namely ENBLE2, which is one of the developmental programmes under the auspices of DFID, UK to rectify the situation. Notably, the National Assembly, under the leadership of the Senate President Bukola Saraki has engaged experts as consultants to work on reviewing current laws and also bills pending before the National Assembly towards implementing legislative reform either through amendments and in certain cases, repeal and re-enactment.
The purposes include creating an attractive and enabling environment to engender and enhance both domestic and foreign direct investment, as well as ease the regulatory burdens and bottlenecks on the crucial but often overlooked Micro Small and Medium Enterprises (MSMEs) which, unbeknownst to most people, actually account for approximately 85 per cent of employment opportunities for the populace and almost 50 per cent of our nation’s Gross Domestic Product (GDP). Invariably, with the advent of the ongoing law reforms including the enactment of certain ground-breaking legislations, such as the pending Competition and Consumer Protection Act, I am quite optimistic that Nigeria will fare much better in subsequent rankings on the ease of doing business and, more importantly, the business community will experience an appreciable positive impact in economic regeneration.
What was our problem before now? Is it that we don’t have the laws or it is the issue of regulatory challenges?
It is a combination. Certainly, we have an abundance of laws and regulations. The problem is that many key statutes require substantial amendments and in certain cases wholesale repeal and re-enactments to make them suited to current modes of transacting business in digital-oriented economies. To give certain examples, we need a comprehensive law on data protection. This is crucial. Likewise, the bedrock statute on company formation, the Company and Allied Matters Act (CAMA) requires far-reaching amendments and, in fact, a repeal and re-enactment.
There is no reason why you must have at least two parties to incorporate a limited liability company. Nowadays, in many jurisdictions, one person can incorporate a limited liability company as a director and shareholder. Likewise, company incorporation should not take more than 48 hours. With respect to the issue of the time it takes to incorporate a company or register a business name, I must commend the efforts of the Corporate Affairs Commission (CAC) and, in particular, the Registrar General, Mr. Bello Mahmud. The CAC has come a long way towards automating its processes including enabling legal practitioners to conduct various incorporation/registration processes online. There is still a lot of work to be done, but the progress should be recognized and commended. Still on the issue of ease of doing business, with regard to MSMEs, it is quite onerous to require them to file annual returns in the first instance in order to have the CAC attend to their requests, such as change of shareholders or directors, increase in share capital and other matters.
In sum, our laws need to be entrepreneur-friendly including making it easy to access credit at affordable interest rates. We also need to enact legislations specially geared towards making it possible to access credit at affordable rates. This would also have an attendant derivative of reducing the rate of loan defaults. Oftentimes, the only way most MSMEs can access credit is raising soft loans from friends and family. In many cases, the only source of collateral that the promoters have is land. However, land as collateral also poses a myriad of issues, including the prohibitive cost of registering title to land and the absence of a national digitized data base to conduct searches to determine ownership, tenure of rights, and whether already encumbered or otherwise.
Are those not problems created by the land use Act?
The Land Use Act (LUA) was enacted in 1978 – that is almost 40 years ago! The inability to readily adapt the LUA to current economic dynamics is due primarily to the fact that its provisions are enshrined in the Constitution, meaning that even the National Assembly cannot amend it as a matter of course and, certainly, the States are completely constrained. That said, there are certain palliative initiatives that the States can take including simplifying the process for obtaining Certificates of Occupancy, (C of O)drastically reducing registration fees, adhering to a reasonably brief period for completing the registration process, whether sales or mortgages, etc,. as well as providing a reliable digitized process for conducting searches. The drawbacks in this area cannot be overstated and, in fact, this is one area that the country’s score was most abysmal in the World Bank’s Report on the ease of doing business here.
The NBA-SBL is an integral part of the entities enabling these law reforms towards enhancing the ease of doing business. Are you envisaging in your interventions a one-stop-shop?
To a certain extent, there have been a lot of efforts made in that regard. If you go to the Nigerian Investment Promotion Commission (NIPC), you should be able to accomplish a lot. They have the Federal Inland Revenue Services (FIRS) desk and various other desks there. It is just that the system has not worked as well as it should have. So, these are some of the things to be looked at, to make sure that regulatory agencies actually deliver on the predicate of their founding.
But there are those who argue that our businesses are over-regulated. Do you agree with that?
It is true that in certain instances lines are blurred leading to potential acrimony between agencies wanting to protect their perceived turfs. These areas also need looking into. This is particularly the case with respect to areas of jurisdiction among certain agencies in the privatization arena. This area is crucial because we cannot afford to replace public monopolies with private monopolies or oligarchies.
There is effort to amend CAMA at present. Would that be sufficient or we need more laws to ease the process of doing business in the country?
I don’t want to preempt those who are working on the bill right now. However, I can tell you authoritatively that there is a lot of work that is ongoing in this regard among, the NBA-SBL, CAC, NESG and ENABLE 2. The current bill is being looked at very critically. My sense is that what is going to happen is that the current CAMA will not just be amended but repealed and re-enacted.
What in your opinion will be the implication of establishing special courts for the trial of corruption cases?
Quite candidly, I have not given it a lot of thought. I know there are disparate views on the issue. I am also aware that the differing views include very eminent legal practitioners. I think we have to wait and see what is ultimately presented and then react accordingly. In the meantime, we should allow a modicum of trust that both sides are engaging based on objective convictions.
I didn’t ask for your trust on them. All I asked is what in your opinion would be the implication of such courts on the existing ones?
I don’t know for example whether they would be special courts completely or just divisions of existing courts. If they are to be special courts completely, then that would require some kind of constitutional amendments or provisions for those courts to be set up. But if they are going to be divisions of the existing courts, then they would just be akin to what we already have in some states – commercial division, fast-track, land division, family and probate division, etc. We will have judges who are rather adept in those practice areas sitting in those divisions, so they would be expected to readily adjudicate on cases that come before them.
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