Garba Abubakar, the registrar-general of the Corporate Affairs Commission clocked one year in office last month, January. In this interview with BusinessDay’s John Osadolor and Harrison Edeh, he speaks on how the reforms by the commission are enhancing ease of doing business and impacting on revenue generation for the government. Excerpts:
How would you describe your experience as the Registrar-General of CAC within your first year in office?
If you remember, I was appointed in January 2021.The effective date for the appointment is seventh of January but I assumed office on the 9th. Since then, it has been work, work and work. About two months after my assumption of office, we had the lockdown as a result of the pandemic. That was a very trying moment for us in terms of service delivery, because for a complete one month then, the country was under total lockdown. When the lockdown was also eased, the restrictions placed under the category of staff that would come to the office also affected our service delivery. That continued up to the third quarter of the year. Just as things were returning to normalcy, another partial restrictions was announced in December which allows only level 15 officers and above to come to work. Indeed, 2020 was challenging but also provided opportunities for us to look into ways we conduct business, and the ways we’re dealing with our customers.
Before then, for every registration type, customers had to come physically. For new registrations, the system was partially online but collection of certificates had to be done in our offices. With the pandemic, we had to dispense with the physical presence of customers in order to curb the spread of the coronavirus. At first, this was met with resistance from some of the customers, who traditionally come in here to transact, but we had to insist’ that it is either you send your documents through courier companies, or you send your documents by email after which we process and send the results the same way. They had to accept that eventually, because they thought by resisting, that would force us to revisit our decision. However, we stood our ground and it came to pass. In terms of revenue, despite the challenges of covid, we were able to record and even surpass our targeted revenue for the year.
Can you tell us how reforms led to increase in revenue?
We had a targeted revenue of N18.2billion. At the end of the year, we had more than N19 billion from our operations. We’ve recorded increase in the number of registration services, due to various interventions by the government. Even the post-registration services, we noticed more complaints by registered entities as opposed to what we used to have before. In terms of revenue, as said, in the last seven to eight years, we were recording losses year in year out, but 2020 was different. As I’ve earlier said, we were able to surpass our target. In 2019,we had a targeted revenue of N16bn, but we only realised N12bn. So, we entered 2020, with outstanding liability of overN6bn on staff pension contributions, taxes and other third party obligations. I’m glad that most of these liabilities have been cleared during the year 2020. The only thing that has not been cleared are some outstanding, because when I took over, we had some pension and liabilities that had not been remitted dating back to 2017 but we were able to clear up to March 2019.
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We couldn’t pay that of April to December 2019, because the budgetary provision on staff course has reached its limit. So, we are due to pay this year, and all liabilities due in 2020 were discharged as when they arise. All tax and pension liabilities, all statutory contributions, deductions or payments due in 2020 were discharged as at when those liabilities arose. Therefore, we have entered 2021 on a very clean slate and we’re hoping that this year would be better, particularly in view of the new technologies that the commission has deployed, which took effect from first January.
As we speak, we have a new portal that allows for new registrations and all post registration services. Customers transacting with us will no longer send any physical documents either by courier or by Email. They’ll now use the portal. The major difference between the current portal and what we had previously is the fact that it is now consolidated. In the new portal, everything is now integrated. So, the documents that you’re required to upload, you use the same interface to upload these documents, you also use the same interface to do your data entry, and also scale your signature. So, this is how the system is designed and we’ve given the privilege of filing through the entity itself, or by accredited customer.
Every filling made through these persons is deemed to have come from an authorised person and would be accepted and registered in CAC. For the first time, there’s a such window now, that for free, you can see the name, date of registration and registration number of the entity and also know whether it is active or dormant or in liquidation. You can also see the name of persons with significant control, that is the beneficial owners of the company, and that one is available for free. For entities registered from the time this portal starts, that information is available. For existing entities, it is because they’ve not started filing persons with significant control information until the next annual returns. As they file, this information will be publicly available. For other information, that is a paid service. On the same portal you could click on paid service, pay research fee, and view the status of the entity such as the directors, the shareholders, and whether the company has any encumbrances, in that manner. This is the way we’ve transformed company registration process in Nigeria.
Another significant change has to do with the fact that the document not just the certificate, and even other certified true copies come with the ‘QR’ code. So you can use ‘QR’ scanner on your phone’, to actually know whether the document is genuine or not. It is inbuilt into any document that is being issued under the new systems. This is unprecedented, and there is no registry in the world that has implemented this kind of system, CAC is the first to do that. So, moving forward, we intend to enforce compliance with the new law, now that we’ve a new law. The portal as presently constituted covers existing entities, companies, business names, and incorporated trustees. The interface for new legal entity types like limited liability partnerships, is being developed and we plan to deploy it by the end of March this year .That would allow ‘end to end’ registration of these entities similar to what we do for companies, business name and incorporated trustees. Therefore, under the new portal, when you apply to register, you upload your documents, and if your information is found to be okay, you get your certificates electronically.
What we’ve done moving forward in view of various data protection regulations, is that we don’t issue documents that contain personal information such as the signature or the actual date of birth of the individual, we don’t do that any longer because that has actually given room for people to hijack the identity of some of the directors. We issue certified extracts, that don’t have the signature but authenticated by us that this is the true information on the register as at the date it was issued. Moving forward, you won’t be able to see the signatures, you won’t be able to see the identification number of the individual. Even date of birth, we only put the month and the year, you won’t know the actual date of birth. These are necessary and the new law has given the right to any person either as a director or shareholder or any person that has interest in any entity, to apply to restrict his residential address. That is done for a fee. If he applies, his personal residential address would be restricted from the public register. But to be able to do that we must provide reasons to support them.
The regulation has outlined the kind of grounds upon which that kind of restrictions would be placed. Once the applicant satisfies that requirement, the residential address would be blocked from public interface and a service address would be displayed. These are some of the things we’re trying to do, but typical of anything that is new, at the initial stage, we may have slight hitches, and errors that are being rectified as we’ve 24hours support from our vendors. It came about after a lot of sacrifice and some of our staff were sleeping in this office to get these things done.
Could you speak to us on the CAMA and key lessons for us as a nation?
Well, CAMA has come to be, and it was a tortuous journey over a period of time. I was part of the process, including the in house committee that did the initial draft. If you recall, the eight Assembly passed it and it wasn’t assented to because of certain provisions that had to be rectified, and subsequently resubmitted to the 9th Assembly, and was subsequently approved and Mr. President assented to it.
The gazetting was done by the clerk of the National Assembly, and official copy was given to us in November. You can’t just implement CAMA, without a regulation to support such implementation . The regulation usually provides for disclosure requirements, fees to be charged for the various services and other matters .The honourable minister approved the regulations in December and that regulation is now the working document for the implementation of CAMA. The new portal is designed in line with these new regulations. The forms and disclosure requirements are consistent with the regulations. The work started long ago, because we couldn’t wait for this, and we did it in anticipation that this regulation would be approved but in an unlikely event that anything is changed, it is easier to correct than waiting to start after the apporval, and we’ve succeed in doing that. As I’ve said, you remember all the hullabalo about some of the provisions of CAMA, but our take is that only God’s law is perfect, and every human endeavour cannot be perfect. The implementation has not even started and there was even no basis for all this complaints because, it is when you implement that you know whether there are weaknesses or whether the authority vested by that responsibility is overreaching itself. The implementation has just started, but as an organisation, we recognise the fact that laws are meant to be obeyed, and since the authority to enforce this law is vested in us, we’re going to enforce it strictly. For any non-compliance we would use the law to address them. People should not think that they can do anything and get away with it.
The law is meant to be obeyed and that has to be followed. Things are made easier now, because at a glance, you know the status of the entity, and electronically, you can pay and search every entity. As such, it is easier for any interested persons to report to us on any matter that he feels either where there is non disclosure or wrong disclosure. It is easier for people to now escalate matters to us and that would prompt us into action to get the necessary things done. We don’t intend to be autocratic in our approach. We’re are a regulator, but will use persuasion, and all the available avenues to get entities to comply with this. It is only when they fail to comply that we have to impose all the necessary sanctions. Enlightenment has started and the other thing we are considering is an amnesty for certain number of years, for companies that have backlog of annual returns. We’re still looking into that and once a decision is made on the nature of the amnesty and the extent to which that amnesty would apply, we would make it known to our stakeholders.
Can you speak to the charges required to enter into various portals?
Accessing the portal is free if you’re doing basic search such as knowing the name of a company, the date of registration, the registration number, address and name of persons with significant control (beneficial owners). However, if you want to view the full status of the entity in terms of knowing whom the directors are, their addresses, whether the company has borrowed money, if it has used any assets to secure loans, the shareholders of the company etc; you have to pay only one thousand naira, although N2000 naira is previously paid in CAC by customers for this service.
New registrations services, the fee hasn’t changed, in fact there is a fee reduction now, because at the point of registration you don’t pay for the Certified True Copies. But, on post registration, we’ve unified the fees. Before, the fees were N30,000 for a transaction, N20,000, and N10 000. So, the fees has been unified mostly for companies, to start from a minimum of N5000, depending on whether it is a private company, small company or public company. Public companies usually, the fee is higher. Another thing is in the past, obtaining the certified true copy document cost N2000, but fee has changed now because we don’t issue certified copy of one document. We issue certified extra that contains all information about the entity, as per the name, address, date of registration, registration number, the names of the directors and their addresses, the names of persons with significant controls, the shareholders. Also, information on whether there are encumbrances and whether the company is winding up. That comprehensive information that ordinarily would have cost up to N10,000 to N15,000 in the past you now get it for N5000.
This is the new filing regime and most of the incorporated fillings now have a uniform fee. Some have been reduced. For instance, the status report in the past used to cost N5000, where regulator approved standing costs N10,000. Now it is N5000 for everything. The whole essence is to make things affordable in a manner that would allow us cover our costs. We cannot just make our fees so low that at the end of the day, we won’t be able to get anything in return.
Technology costs money, even though the new upgrade on the portal didn’t cost us anything, the vendor did it without any charge. It is only the new modules of LLP and LP that we are paying for. As I’ve said, these are the fee regimes, and it is actually far better than what we used to have.
Could you speak further on your revenue appreciation and how you start to increase in operating surplus to about N2bn?
Actually it is more than N2bn.When I took over, I met an outstanding operating surplus that was not remitted to the tune of N385 million, for the period of 2014-2017. I approved that, and it was paid. For 2018-2019, the assessment was not carried out and when I took over, and an assessment was done, and a bill of N809million was submitted to us which I paid. If you remember, the federal government now does direct deduction. Every income that comes, they take 25 percent. From the time the system started till 31st December, over N1.4 billion was deducted. The total money paid to the government is almost N3bn in operating surplus. In fact, we could have paid more, if not for the fact that we inherited liabilities from Pension’ and other things. If not for that, we would have given government up to N5bn. We are hoping we could accomplish that this year and we recognise the fact that the government needs money, and we have the responsibility to support government in its developmental strides.
Could you speak on some of the reforms and their impact on the Commission?
Actually, the fact that customers no longer come here has helped to sanitise the system. Before now, we had high incidence of the forgery of our receipt. One RR number could be cloned, three, four, five times and recycled for different transactions. More so, verification was difficult, because sometimes it takes two to tango. Probably, within, there may be people who may be actually collaborating. So, the fact that customers don’t come here any longer has helped.
They send their receipts by email and we confirm it. So if they had collaborators before, these documents don’t go through the collaborators any longer. The system has been decentralised, so anything that we saw that is not genuine, we query it. Also, there was an increase, in the number of registration services and greater number of compliance by registered entities. The third point has to do with the commitments and the drive to do things differently. The first thing I did upon assumption of office is to review the checklist and the guidelines governing our registration services and try to simplify it. In the past, to change directors, sometimes you go through a hell of problems, and applications being queried, left right and centre. We have simplified that because, what the law provides is that the members in ordinary meeting change directors in ordinary resolutions. By law, ordinary companies are not obliged to file ordinary resolutions with the CAC. Ease of access to our services has actually helped to grow the revenue. These are some of the things we have done that led to appreciable increase in our revenue.
