Passage of 2018 CAM bill in sight as reforms boost friendly business environment
The Federal government is poised to removing bottlenecks in business environment through legislative reforms to harmonise the Company and Allied Matters (CAM) bill and pass it to enhance ease of doing business in Nigeria.
Part of the legislative reforms being pursued in conjunction with other stakeholders is the CAM bill, which has passed the third reading at the Federal House of Representatives. The bill, which was passed by the Senate in 2018 is the largest business reform bill to be passed in Nigeria in over 28 years, as it represents the re-enactment of the existing Companies and Allied Matters Act 1990 (CAMA).
According to Dr. Jumoke Oduwole, the Secretary of PEBEC and Senior Special Assistant to the President on Industry, Trade and Investment, the bill, which had been heavily constrained by several provisions in the old 1990 Act, signifies meaningful progress towards aligning business practices with global standards as it speaks to all matters affecting a company, from incorporation to winding up and insolvency. The bill directly affects the influx of foreign direct investment (FDI) into Nigeria due to its relevance to the ease of doing business and investing in companies in Nigeria.
The new bill has new features that will make doing business in Nigeria a lot easier. A key thrust of the Bill, for example, is aimed at simplifying the process of starting and growing a business in Nigeria by abolishing the requirement for a company to have authorized share capital, enabling a single person to form a private company, introducing for the first time a business rescue process, and introducing the concept of limited liability partnership.
It also ensures more appropriate regulation for micro, small and medium scale enterprises, by making it optional for smaller companies to have a company secretary or hold annual general meetings, as well as making it easier for smaller companies to comply with accounting requirements and introducing separate models of articles of association for private companies.
Another legislative reform of the PEBEC is the Omnibus Bill on business facilitation. The first of its kind in Nigeria, the bill seeks to amend provisions in over 30 existing legislations. It is aimed at being a single encompassing bill to institutionalize business climate reforms already achieved by PEBEC, codify new rules and directives for agencies; amend provisions of the present legislative framework that have been identified as bottlenecks for the business climate reforms; and introduce new business-friendly provisions that would accentuate business climate reforms.
The Enabling Business Environment Secretariat (EBES) has concluded engagements with stakeholders broadly, in a bid to ensure that the Omnibus bill adequately addresses legislative hiccups that continue to affect businesses and in line with PEBEC mandate. According to Oduwole, these legislative interventions are a strong demonstration of the Administration’s commitment to improving the business environment, and ultimately Nigeria’s competitiveness, which is a critical pillar under the Economic Recovery and Growth Plan (ERGP).
The Council also commenced a regulatory reforms pilot project with National Agency for Food, Drug Administration and Control (NAFDAC) and National Insurance Commission (NAICOM). A technical working group (TWG) was set up to review the key concepts, issues, procedural rules and processes involved in developing a national regulatory framework, and draft guidelines and an operational framework for regulatory agencies in Nigeria.
Regulatory reforms will seek to eliminate cumbersome regulatory procedures, minimize duplicative costs as multiple agencies regulate the same product, and fully streamline regulatory procedures for relevant agencies online, among others. Having commenced in 2018, this year the regulatory reform project will be broadened to other regulators nominated by the private sector.
The Council has already successfully achieved the the establishment of the Small Claims Court in Lagos and Kano states, where commercial disputes of five million naira and below can be quickly and easily resolved by small businesses. This reform initiative, driven by the Lagos State Judiciary and the Kano State Judiciary in collaboration PEBEC, also included the training of magistrates and court officials to handle specialized small claims in the two states. Already this reform is bearing fruit as “After the establishment of fifteen Small Claims Courts in Lagos in April 2018, 90 percent of judgments delivered from May to September 2018 were delivered within the 60-day timeline in compliance with the Lagos State Magistrates’ Courts Law (Practice Directions on Small Claims) 2018,” PEBEC stated.
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