INTRODUCTION
The Business Facilitation (Miscellaneous Provisions) Act 2023 ("BFA" or the "Act") was signed into law on the 14th day of February 2023. The Business Facilitation Act (BFA) 2023 was introduced mainly to promote the ease of doing business in Nigeria and in doing so, to eliminate bottlenecks hindering productivity, to amend relevant legislations and to institutionalise all the reforms to ease its implementation. . The Act is a legislative intervention by the Presidential Enabling Business Environment Council (PEBEC) which codifies Executive Order 001 and made consequential amendments to 21 business related legislations to remove bureaucratic constraints of doing business in Nigeria.
This Article will succinctly discuss the highlights of the Act which include the legal provisions of Executive Order 001 (as codified), and notable sections of the various pieces of legislation that were amended by the Act.
The Act has played a significant role in promoting transparency across various sectors, fostering collaboration among Ministries, Departments, and Agencies (MDAs) in their operations. The transparency requirements for MDAs of the Federal Government aim to enhance accountability and efficiency in the delivery of public services. To reduce ambiguity and tackle difficult processes, the government ensures that citizens are informed of what is required of them by mandating MDAs to publish and update a complete list of requirements for obtaining various products and services. The said products and services include permits, licenses, waivers, tax-related processes, filings, approvals, registrations, and certifications to be to be performed or conducted in accordance with the functions of the relevant MDA.
Additionally, MDAs are required to communicate the approval or rejection of an application within t a stipulated timeline. Where an application for a product is not concluded within the stipulated timeline, such will be deemed approved and granted. They must also inform applicants of the grounds for rejection where applicable.
NOTABLE AMENDMENTS MADE BY THE ACT TO SUBSISTING LEGISLATION
A. COMPANIES AND ALLIED MATTERS ACT (CAMA) 2020
- Increase of Issued Share Capital: The Act amended section 127 of CAMA to provide that a company can increase its issued share capital through the resolution of the Board of Directors subject to conditions that may be imposed by its Articles of Association or the company in General Meetings.
- Pre-Emptive Rights: The Act amended section 142 of CAMA by limiting preemptive rights of existing shareholders in a company to private companies. Previously, this provision applied to both private and public companies. In addition, the Act amended the applicable time limit for existing shareholders to accept the offer from 'reasonable time' 'to twenty-one (21) days.
- Power to Allot Shares: Previously, under section 149(1) of the CAMA, the power of the company to delegate allotment of shares to the directors was only applicable to a private company. However, the BFA amended the section to reflect that the power of the directors of a public or private company to allot shares must be vested in them by the company in a General Meeting or by the company's Articles.
- Return as to Allotment of Shares: The Act amended section 154(1) of the CAMA to reflect that a company limited by shares shall register its allotment of shares with the Corporate Affairs Commission (the "Commission") within 15 days.
- Introduction of Electronic Share Certificate: The Act amended section 171 of CAMA by introducing the issuance of a share certificate in either electronic form in addition to the issuance of a physical form.
- Introduction of Virtual Meetings for Public Companies, Electronic Notices, and Electronic Voting: The Act provides that both private and public companies can hold their General Meetings virtually, provided it is in accordance with the relevant company's Articles of Association. Additionally, the Act amends sections 244 & 248 of CAMA to permit a company to issue notices via any electronic means, and to allow for electronic voting at General Meetings, respectively.
- Increase in the Number of Independent Directors: The Act has amended sections 275 (1) and (2) to increase the number of independent directors in public companies from a minimum of three (3) to one-third of the total number of its directors.
- Conformity of Financial Statements Solely to The Standards of The Financial Reporting Council of Nigeria: The Act amended section 378 of the CAMA to provide that a company's financial statements prepared under section 377 of CAMA must comply with the accounting standards issued by the Financial Reporting Council of Nigeria.
- New Threshold for Determining Insolvency: The Act amended section 572 of CAMA to include that the monetary threshold for determining insolvency is to be determined by a regulation issued by the Commission. Previously, the threshold for insolvency was a sum of Two Hundred Thousand Naira (N200,000.00) only.
B. NIGERIA EXPORT PROMOTION COUNCIL ACT (NEPCA) 2004
The Act amended Section 2 of the NEPCA 2004 to provide that the Chairman of the Governing Board shall be a person with cognate experience in industry, commerce, finance, international trade or export promotion. It also lists members of the Governing Board of the Council. The amendment to the composition of the Board removed a representative of the Association of Nigerian Exporters and of the Farmer's Association as members of the Board as previously provided by the NEPCA 2004.
C. CUSTOM AND EXCISE MANAGEMENT ACT (CEMA)
The Act amended the CEMA by providing a clear definition of 'single window' to mean a platform or facility that allows parties involved in trade and transport to lodge trade-import, export or transit-data required by government departments, authorities, or agencies through a single-entry point interface to fulfil all import, export, transit related and other regulatory requirements.1
D. EXPORT (PROHIBITION) ACT
The amendment of this Act by the BFA allows the Minister of Finance to vary the goods that are prohibited from being exported outside Nigeria by an order.2
E. FINANCIAL REPORTING COUNCIL OF NIGERIA (FRCN) ACT
The Act amended section 59 of the FRCN Act to introduce a new subsection (3), which provides that all general-purpose financial statements prepared by companies and government organisations are to be prepared in accordance with standard regulations, rules, and pronouncements issued and adopted by the FRCN.
F. FOREIGN EXCHANGE (MONITORING AND MISCELLANEOUS PROVISION) ACT
The Act amended the FEMMP Act by replacing the ground of national interest with twelve (12) other grounds for revocation of the appointment of authorised dealers or buyers licensed to deal in foreign exchange. 3
G. IMMIGRATION ACT 2015
The Act improves the Immigration Act positively by amending section 20 to provide a stipulated time frame for the acceptance or rejection of travel visas. Also, it mandates the Immigration Service to provide every requirement needed to obtain visas on its website. Additionally, section 36 was amended to ensure electronic facilitation in the operation, accessibility, technical and service requirements of the Immigration Service.
H. INDUSTRIAL INSPECTORATE ACT (IIA) 2004
The IIA was amended by increasing the threshold of qualifying capital expenditure from Twenty Thousand Naira (20,000.00) to Five Million Naira (5,000,000.00).4
I. INDUSTRIAL TRAINING FUND (ITF) ACT
The Act amended the ITF Act by replacing section 6 with a new section 6, which provides that any employer with 25 or more workers in his/her establishment and operating outside the free trade zone shall, in respect of one calendar year, contribute at least one percent of his or her annual payroll to the Fund. The implication of this amendment is that employers with fewer than 25 employees and companies operating within the free trade zone are exempted from making ITF contributions. Previously, the threshold was 5 or more employees.
J. INVESTMENT AND SECURITIES ACT (ISA)
The Act amended section 67 (1) of the ISA to introduce a new sub section 1, which allows private companies to allot their securities to the public in a manner regulated by the Securities and Exchange Commission, and in the case of a public company, prohibits allotment of securities where the offer does not meet up with the minimum sum needed to carry out the projects listed for offering in the Prospectus.
K. NATIONAL HOUSING FUND (NHF) ACT
The Act amended the provisions of section 4 of the NHF Act to mandate employees earning the national minimum wage or its equivalent and above in the public sector and those who are self-employed to contribute 2.5% of their monthly income to NHF but excludes employees in the private sector from the compulsory contributions.
L. NATIONAL OFFICE FOR TECHNOLOGY ACQUISITION PROMOTION (NOTAP) ACT
Section 5(2) of the NOTAP Act provides that every contract or agreement entered by any person in Nigeria with another person outside Nigeria in relation to the transfer of foreign technology to Nigerian must be registered with the NOTAP not later than sixty (60) days from the execution or conclusion of the contract or pay a fine of N100,000 for late registration. The BFA has amended this section to the effect that companies in the first two years of business operations shall not be liable to penalties for late registration provided such contracts are registered before the end of the second year of their business operation.
M. NATIONAL PLANNING COMMISSION (NPC) ACT
The Act amended section 3(2) of the NPC Act to include the Director-General of the Infrastructure Concession Regulatory Commission as a member of the NPC.
N. NIGERIAN CUSTOMS SERVICE BOARD (NCSB) ACT
Section 3 of the NCSB Act was amended to provide that the Board shall adopt modern means of operationalisation and develop regulations for carrying out the activities of the Service.
O. NIGERIAN INVESTMENT PROMOTION COMMISSION (NIPC) ACT
The Act amended section 20 of the NIPC Act to include a new sub section 3 which provides that any enterprise registered in Nigeria, which subsequently acquires foreign participation shall within three (3) months of such acquisition register with the NIPC. Furthermore, section 22 provides that the NIPC will clearly state all the requirements needed to qualify for strategic investment and negotiate incentive with the company or investor where the company qualifies for a special incentive.
P. NIGERIAN OIL AND GAS INDUSTRY CONTENT DEVELOPMENT (NOGICD) ACT
The Act amends section 106 of the NOGICD Act to include the definition of 'Nigeria Independent Operators' to mean a 'Nigerian Company'.
Q. NIGERIAN PORTS AUTHORITY (NPA) ACT
The Act amended section 7 of the NPA Act by directing the Authority to provide facilities for the use of information and communication technology across all operations in the ports.
R. PATENTS AND DESIGNS ACT
The Act amended the First Schedule to the Patents and Designs Act by adding a new Paragraph 13A, which expressly empowers the Minister of Trade and Tourism to regulate the process for application, grant, use and withdrawal of the compulsory licenses.
S. PENSION REFORM ACT
The Act amended section 89 of the Pension Reform Act by providing that pension funds are eligible for securities lending as the National Pension Commission approves it. Previously, pension funds were prohibited from being used for security lending.
T. STANDARD ORGANISATIONS OF NIGERIA (SON) ACT
The Act amended section 5 of the SON Act to ensure that the organsation investigates quality products imported into Nigeria, not just products already in Nigeria. Also, the Act amended section 29 to mandate the Director-General to approach the court to obtain an ex-parte order before entering any premises to seize products.
U. TRADEMARKS ACT, 2004
The Act has amended the definition of 'goods' under the Trademarks Act. Also, the definition of "trademark" has been expanded to include 'shape of goods', 'their packaging', and 'the combination of colours'.5
CONCLUSION
The enactment of the Act shows a significant development in Nigeria's business environment as it specifically addresses challenges faced by businesses and promotes economic growth by improving working relationships with regulatory agencies. These changes show that the government is intentional about making Nigeria more business-friendly to both local and foreign entrepreneurs. It is important to ensure adequate implementation of these amendments to enable the Federal Government achieve its purpose.
Footnotes
1 Section 2, Custom and Excise Management Act
2 Section 1, Export Prohibition Act, 2004
3 Section 6, Foreign Exchange (Monitoring and Miscellaneous Provision) Act, 2004
4 Section 3, Industrial Inspectorate Act, 2004
5 Section 67 of the Trademarks Act, 2004
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