Nigerian Legal market in 2015, Business lawyers project…

Last week we featured legal market projections  for 2015,  from lawyers and key players in the legal sector around the globe. See highlights on the right side of the page. This week we bring a couple from within our local industry in Nigeria. See below:

TOLULOPE ADEREMI

PARTNER, PERCHSTONE & GRAEYS

I think there are a few things that will shape the Nigerian economy in 2015 and they are (not in any particular order)

Currency Devaluation: I see a lot of opportunities here for lawyers (although many see challenges). This is because, as an import based nation, a number of contractual breaches will occur and this will inevitably culminate into actions for which the courts will be required to determine whether the reason for the breach(es) is one defined as an ‘impracticability’ or one which is an ‘impossibility’.

For instance, where I obtained a loan facility from a bank to finance the importation of spare parts at the cost of $1m. What it means is that in returning that sum (regardless that at the time of obtaining the facility, $ was equivalent to about $165 and today, it hovers around $189 to $190), the banks will not be interested in taking note of the drop in the value of the currency (which by the way has been predicted will go further down) but will insist on the principal and agreed interest borrowed. On the part of the borrower, he/she may plead frustration or the ‘impossibility’ (as opposed to the impracticability) of meeting the contractual obligations. This will no doubt engage quite a number of commercial lawyers in 2015.

I also believe that most focused law firms must start considering choice of client jurisdiction if their balance sheets must remain what it was last year and even improve this year. This is because, having clients pay you in Naira is commercially counterproductive as the value of what you get paid (by the devaluation) has dropped and consequently, you begin to notice inability to meet certain contractual obligations within the law office. What may eventually happen is that lawyers will start looking at increasing their foreign client portfolio;

Finally, and I am sure you would have expected me to raise this as No. 1, it is election year. What is important about this year’s election is that the two major political parties are widely accepted that we may not have a clear-cut result like we did in 2011. General Buhari is the presidential candidate of CPC (the merger of some of the major political parties in Nigeria) whilst President Jonathan (is not only the incumbent but also leads a party credited to have won a sizeable number of other political party faithfuls). So I see a lot of post election petitions after February. It certainly will be a busy year for lawyers.

ABAYOMI ADEBANJO

SENIOR ASSOCIATE, JACKSON ETTI & EDU

I also see the Agric Sector as the game changer in 2015. The rest, I will keep as trade secrets.

For me, i have dimensioned the market based on sectors and my view, from a purely macroeconomic perspective, is that the growth sectors will be ecommerce/technology, agriculture and service sector generally.

I expect reduced exposure to oil& gas activities by financial institutions for most of Q1 and Q2given the slump in oil prices and naira devaluation coupled with non-passage of the PIB hence no fiscal incentive by IOCs for more investment in the sector. However, I expect activities to rebound later in the year with the possible marginal field licensing round proceeding as well as possible passage of PIB (in my view this year or next is more realistic for passage of the bill given the global downturn and loss in market share by Nigeria there is need to ramp up production).

From strictly a legal perspective, being an election year there will be a lot of litigation suits, a natural fall-out of the elections, so expect quite abit of activity in that area.  In terms of finance, given the higher cost of funding  and significant exchange rate devaluation, i am expecting companies to look more towards the capital markets for their funding needs. More particularly, there will be a lot of debt restructuring for companies that acquired power assets and oil& gas assets under the power privatisation and IOC asset divestment programme respectively.

TOLULOPE ADEREMI