Afam Nwokedi, Principal Counsel and Group Head, Stillwaters Law Firm: Interview

Interview: Afam Nwokedi

How will the Companies and Allied Matters Act of 2018 impact the business environment?

AFAM NWOKEDI: If the amendment is finalised as has been proposed, it will be transformative and far-reaching, impacting the business environment significantly. The amendment sets out some key innovations, including the single shareholder platform. Under current legislation, you need to have at least two shareholders, but with this development you will be able to own a company as an individual. Other crucial innovations include the limited partnership rule, the rules surrounding abolition of sale, and the new audit exemption rules, through which the level of minimum share capital has been increased.

The bill also promotes the use of more efficient technology. While the Corporate Affairs Commission has been developing very effective digital registration methods, these are not yet mandatory. With the new legislation, the government is making it an obligation on the part of the regulator to give members of the public access to the digital platform, which will further boost efficiency in company registration.

What other industries are in need of legal reform?

NWOKEDI: I believe that unbundling the Nigerian National Petroleum Corporation will result in greater efficiency and lower expenses. As for other industries, while there has been a lot of talk about technology, there is currently no legislation on the organisation of start-ups and small and medium-sized enterprises (SMEs), which are crucial to developing the economy. Furthermore, despite the large increase in international investments in tech start-ups in Nigeria, many tech accelerators still require US registration.

The intellectual property framework in Nigeria urgently needs to be updated. This would significantly benefit Nigeria’s ranking in ease of doing business metrics. Changes in the legal framework could align it with international best practices and have an impact across many industries, including oil and gas, technology, mining and life sciences. When it comes to foreign direct investment (FDI), this is always assessed from a monetary perspective, but Nigeria should improve the ease of importing intellectual FDI to open its doors for the importation of intellectual capacity building. Tax incentives similar to those provided for agricultural inputs should also be put in place to attract intellectual investment.

How could the Land Use Act be updated?

NWOKEDI: The Land Use Act is outdated and should be unbundled. The ownership, proprietary and commercial aspect of land should be privatised, which will increase FDI. In this regard, we must recognise the efforts of the Lagos State government, which has tried as much as possible to lessen the burden of the Land Use Act. Changes include annualisation of land use charges, reviewed every five years. Nonetheless, this does not affect the crux of the problem, namely, that the government’s assent is required, where it ought solely to be concerned with the payment of appropriate tax on the transaction.

What are some of the other major legal reforms of the past year, and which others can be anticipated?

NWOKEDI: The Movable Assets Act and Collateral Registry Act have had a significant impact, easing registration of collateral and introducing the possibility of SMEs using movable assets as collateral. This will ease financial challenges by significantly improving access to credit and finance for individuals and small companies left out of the credit system.

The African Continental Free Trade Area is another far-reaching agreement that will be relevant in the near future. The government wants to approach this with caution. As the biggest economy within Africa, it is important to be clearer about whether Nigeria will have the capacity for completely free movement.