The federal government has demonstrated its determination to improve the way businesses are being done in Nigeria.
Stakeholders have described this step as one in the right direction considering the fact that the country is viewed by many as that with enormous opportunities and business potentials. The sheer size of the country’s population, human and natural resources as well as its diverse culture place the country in a class of potentially great nations. It is therefore a sad narrative when the challenges faced by businesses and entrepreneurs are considered. According to the World Bank Doing Business Report 2017, Nigeria is ranked 169 among 190 economies in the ease of doing business.
However, in the wake of the recession, which the country slipped into in the second quarter of 2016, the federal government has adopted a number of measures to try to curb economic decline and engineer growth. One of the most remarkable is the effort to improve the ease of doing business.
In July 2016, President Muhammadu Buhari established the Presidential Enabling Business Environment Council (PEBEC) with a mandate to remove bureaucratic and regulatory constraints to doing business in Nigeria and improve its global business rating. The Council is chaired by the Vice President, Yemi Osinbajo
A major component of this reform is in business registration. Today, this has witnessed much improvement with the new model adopted by Corporate Affairs Commission (CAC) under the leadership of Mahmud Bello.
It was gathered that the CAC has been in the forefront of strengthening ease of doing business through its plethora of initiatives including the Company Registration Portal (CRP).
Since the launching of the CRP, company registration activity has witnessed progressive increase. Worthy of note, is the fact that the feedback which the CAC gets from its customers and other stakeholders has over time helped to further enhance the workability of the on-line registration experience and operational needs required for a perfect registration process which the Commission is committed to provide.
Findings have shown that the CRP is not only user-friendly, but also affords customers on-line real-time access to the services of the CAC from the comfort of their offices or homes, using different e-payment platforms such as inter-switch, e-transact, MasterCard, Verve card and Visa card to effect payments for their registration. This has made it possible for potential investors to register companies without necessarily hiring the services of a lawyer or lawyers. The CRP has also been found to have significantly impacted on the time cycle for company registration, thereby leading to the achievement of the Commission’s 24 hours registration target. This is undoubtedly a huge leap for Nigeria in terms of one of the key components of the World Bank’s ease of doing business assessment criteria, ‘Starting a Business’.
Beyond the CRP, however, the CAC’s current dynamic management led by Barr. Bello Mahmud had also envisioned other initiatives which have helped immensely towards ease of doing business in Nigeria. For some time now, the Commission has maintained a desk at the One-Stop Investment Centre (OSIC) being hosted by the Nigerian Investment Promotion Commission (NIPC), which is a platform to carter for foreign investors coming to register and do business in Nigeria.
The CAC’s OSIC desk has been empowered to conclude company registration activities within 24 hours. Another laudable initiative by the Commission has been the creation of a public search window which allows members of the public to view all existing and approved names online free of charge before they choose names for reservation. Hitherto, this was only being done physically by lawyers on behalf of potential registrants after payment of a sum as search fees.
Equally invaluable to its clients, the CAC has established a 24/7 Call Centre which is domiciled in its Public Affairs Department, with four dedicated telephone lines and an email account, for the public to make enquiries and complaints resolution.
Also, as part of the federal government’s initiatives to ease doing business, the Minister of Industry, Trade and Investment, Mr. Okechukwu Enelama recently approved timelines and extended working hours for the Commission. The CAC now closes by 7pm to the public. These, among numerous other initiatives, are sure measures towards not only fast-tracking quick start of business in Nigeria, but also ensuring that the Commission evolves into a world class companies Registry.
It was revealed that in the new dispensation, founding a business in Nigeria now simply starts with a person or a group of persons choosing a desired business name and approaching the CAC for its availability on their platform. Approval for reservation of a name shall be completed within 12 hours from inception. If such a name is free for registration, the Commission approves and reserves it for the promoter[s] for a period within which the process of formal registration is expected to have been completed or in some cases, should have been in progress.
The Commission has uploaded the names of all registered Companies, Business Names, Incorporated Trustees and those undergoing registration on its website. The information is updated daily –to enable members of the public to confirm the name, registration number and date of registration for every Company, Business Name and Incorporated Trustees at no cost. The public search window can be accessed directly at publicsearch.cac.gov.ng or through the Commission’s website cac.gov.ng.
The current guidelines for the process is contained in the Commission’s Companies and Allied Matters Act provisions of 2012, which contains the required forms and documents that the registration seekers must provide, and also the various fees they should pay to the government through the Commission.
Before now, it was compulsory that promoters of a business name engage the services of either a CAC accredited chartered accountant, chartered secretary, or a lawyer to register such a company on their behalf. But in the new order, promoters of business names can are now permitted to register their businesses at the Commission directly by themselves provided they have valid identifications such as the permanent voter’s card, international passport, national ID, or driver’s licence.
This new order ensures that expenses incurred by business registration seekers are reduced. Besides this, almost all the fees charged by the Commission for its services have been reduced by half.
Our correspondents learnt that in order to get the optimal benefits of the Companies Registration Portal and further ease the process of company registration, the Commission has integrated it to the Electronic Stamp Duty Portal of the Federal Inland Revenue Service (FIRS). It was disclosed that the e-stamping system has cancelled the physical submission of documents to FIRS for assessment and manual stamping at the various Stamp Duty Offices across Nigeria.
The director-general of CAC, Mahmud Bello has said that once the stamp duty is paid through an e-platform, customers fill in the application form and the Memorandum and Article of Association on the CRP.
“They are then required to download and print the certificate of stamp duty as well as the Memorandum and Article of Association together with the application form for submission.
“Upon such execution, the documents are then scanned and uploaded through the document upload interface together with all relevant documents including the means of identification of the individual subscribers/Directors and their proficiency certificate – if required. These scanned documents are then uploaded via a link to the Company Registration Portal that enables customers to upload their registration documents from the comfort of their homes or offices.
“By this new procedure, there is no more need for physical submission of documents by customers for new and post registration filings, as they can easily do so through the interface. To ensure seamless operation of the portal and zero downtime, the Commission has concluded arrangement for external hosting of its main database and operating software. This will ensure availability of the site by customers 24/7 – thus ensuring efficient registration services,” he said.
In furtherance of federal government’s commitment and determination to improve the business environment, also turned the light on the states.
Enelamah disclosed that the 36 states of Nigeria and the Federal Capital Territory were being assessed on the basis of the ease of doing business in each location for the period 2014 to 2018. This is in preparation for rankings due to be released in the first half of next year.
According to them, the subnational rankings are being undertaken by the World Bank Group, in collaboration with the EBES and the Nigerian Investment Promotion Council (NIPC). The EBES and NIPC would assist state governments in the implementation of their priority reforms.
The states and FCT will be ranked based on 11 indicator areas, which include four World Bank indicators and seven additional areas of interest that are governed or implemented by the state governments. The World Bank indicators are; starting a business, enforcing contract, registering property, and dealing with construction permits.
The seven additional indicator areas comprise: trade/investment and marketing; infrastructure; access to landed property; regulatory environment; institutional support and business resources; transparency and accessibility to information; and security.
While the global World Bank Doing Business Rankings evaluate countries based on the performances of one or two major cities, generally using Lagos and Kano as representative centres for Nigeria, the subnational assessment would rank all the states and the FCT. The government says the aim is to bring out local peculiarities, help states to compete on the basis of their comparative advantage, and highlight good practices and success stories that can be replicated.
Experts hail the looming state-by-state rankings as an exercise that would engender healthy competition among the federating units.
Speaking on this initiative, president of Manufacturers Association of Nigeria, Dr. Frank Jacobs, “Such an exercise would engender competition among the federating states in terms of who would be the best in the ease of doing business.
“If that happens, it will create a better business environment and it is going to increase the ease of doing business among the states.
That will be to the benefit of the manufacturing sector.”
Jacobs explains, “We believe that it is a step in the right direction. It is something that should be encouraged, in fact, not just in the states alone, but also in the local governments. It will make the business environment attractive and more investment will go into business, thereby creating jobs and wealth for the country. That would improve the economy of the country.”
However, experts noted that there are serious structural issues that need to be addressed before the intentions of the state-by-state ease of doing business rankings can really be realised.
With the retention of Monetary Policy Rate at14 per cent, which has been operational since July last year, alongside all other policy parameters, this position of the monetary committee contradicts that of many experts, who have maintained that lowering the interest rate would reduce the cost of funds and give both government and private investors more access to loans to expand infrastructure and production.
Economist Henry Boyo said, the high cost of funds, double-digit inflation rate, and CBN’s monopoly of the foreign exchange market are problems that must be addressed before Nigeria can truly attract both local and foreign investment.
Many have also said that the pseudo-federal nature of Nigeria, which is anchored on a unitary-style central sharing of revenues, would always neutralise any pressure on the state governments to take concrete steps to encourage ease of doing business within their territories.
They stated that the current momentum of business reforms initiated by the federal government is commendable.
“Further, the step towards enforcing compliance with these reforms through issuance of executive orders is a step in the right direction. Nonetheless, it is instructive to note the attendant challenges in the implementation of the orders,” they said.
They envisaged that with the success recorded so far, Nigeria will move up in the World Banks’ next rankings in the Ease of Doing Business Report.
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