Significance of CAMA amendment for ease of doing business
Nigeria’s aspiration to improve the ease of doing business, which appeared to have been driven by the executive branch of government, is now getting a significant boost from the legislature as well.
Of particular interest is in the area of registering businesses, which the Corporate Affairs Commission has for almost two years, attempted to revolutionise through online and faster registrations.
The senate earlier this week passed a historic bill that when operational, will reform the business environment in many ways which were unprecedented. It is expected to even improve on the reforms currently in place, by making business registration faster, and more seamless.
Achieving the CAMA amendment could be attributed to the National Assembly Business Environment Roundtable (NASSBER) which was created as a platform for the legislature and the private sector to engage, deliberate and take action on a framework that will improve Nigeria’s business environment through a review of relevant legislations and provisions of the Constitution. It is a partnership between the National Assembly, Nigerian Economic Summit Group and Nigeria Bar Association’s Section on Business Law, supported by the defunct ENABLE II programme of the UK Department for International Development (UK-DfID). It is expected that this framework will support reforms designed to make Nigeria’s economy globally competitive, achieve inclusive growth and sustainability, create jobs, and cater to the wellbeing of Nigerians.
It therefore became imperative to have an effective legal framework of company law, which is a critical building block of a modern and business friendly economy. A genuinely modern and effective legal framework can promote enterprise, enhance competitiveness and stimulate investment. Conversely, an ineffective or outdated framework can inhibit productivity and growth and undermine investor confidence.
Nigeria ranks 145 out of 190 countries in the World Bank’s Ease of Doing Business ranking, which rates countries for the ease at which one can open, conduct and perhaps close down businesses. One of the indicators the WBDB team measures is the relative ease or difficulty in establishing and running a business in Nigeria. In this regard, Nigeria is ranked on the Starting a Business indicator as 130 out of 190 economies and for the first time was also recognized as one of the top ten (10) most improved economies in the world. However, as Africa’s largest economy, Nigeria needs to greatly improve on the rankings. The WBDB Index offers a useful and measurable assessment of economies around the world; and also serves as a resource for private sector and other stakeholders interested in investing in Nigeria.
The Senate led by Bukola Saraki, now appears to be charting a course to make doing business easier, with the passage of a bill to repeal and re-enact Companies and Allied Matters Act. The Bill comes 28 years after the passage of the original Companies and Allied Matters Act and will make Nigeria the best country in Africa to do business.
This landmark reform by the Senate will provide significant benefits to companies by reducing bureaucratic red tape and making it easier to comply with regulatory obligations. Most of the changes are aimed at encouraging investments that will allow small businesses and startups thrive, lower costs and ease regulatory burdens.
The Act is one of the most critical pieces of legislation which impacts the Nigerian business climate and the Micro, Small and Medium Scale Enterprises (MSMEs). It also directly affects the influx of Foreign Direct Investment (FDI) into Nigeria because of its relevance to ease of doing business and ease of investing in Nigeria.
Ease of doing business plays a crucial role in the economic growth of any country. The processes, rules, and regulations set up by the government or government agencies can either help promote a business-friendly environment or hold businesses back from their entrepreneurial ambitions.
Ease of doing business is one of those topics that the federal government appears to have been giving a lot of attention in the last two years. It even culminated in establishment of the Presidential Enabling Business Environment Council (PEBEC), chaired by Yemi Osinbajo, the Vice president. But now, it appears the legislature is also on board in making doing business in Nigeria easier.