• Tuesday, February 27, 2024
businessday logo

BusinessDay

“There should be a regulator for the regulators to oversee the implementation of the BFA” – Aramide Nwokediuko

“There should be a regulator for the regulators to oversee the implementation of the BFA” – Aramide Nwokediuko

The Business Facilitation Act 2023 was signed into law in February to great applause by many stakeholders in the business community as it is largely seen to have addressed several issues that have negatively impacted the Ease of Doing Business in Nigeria for years. In this interview with Aramide Nwokediuko, Group Company Secretary, Head of Legal and Compliance at CFAO Nigeria, we discuss the provisions of the BFA that has the most impact on big foreign companies in Nigeria, the implementation of BFA, and regulating the regulators. Excerpts below.

What amendments introduced by the BFA have improved the ease of doing business for CFAO and similar big foreign corporates?

CFAO is a group of companies engaged in a vast array of businesses cutting across the FMCG industry, equipment, elevators and automobile industries; as well as the health sector. The amendments made by the BFA are very commendable and if properly implemented, are indeed poised to have a positive impact on our company, in particular, and companies such as ours in general, to various degrees. For example, the introduction of a single interface station, by which all relevant agencies at the ports collectively harmonise their operations. This will definitely fast-track the process of importation of goods and eliminate, or significantly reduce, unnecessary bureaucracy and the undue delay that had previously plagued this process. Another is the deemed approval given upon the expiration of the timeline specified by the MDA in its published list for the communication of approval or rejection of an application. This ensures that an applicant would not feel stranded or uncertain with respect to its application, especially where same is crucial or urgently needed for the applicant’s business or compliance purposes.

How does the newly introduced Trade Monitoring Platform aid with the timeline for clearing goods? Any improvements you would like to suggest?

The Trade Monitoring Platform provides some significant relief in this regard as it provides a trade facilitation tool for access to certain trade forms as well as data exchange between various stakeholders in the trade chain. This creates a one-stop shop that significantly reduces the bureaucracies, bottlenecks and lengthy delays that before now may have plagued the process for each relevant MDA. These MDAs are now being interfaced with through a single window and the information submitted is also now available to the relevant MDAs without the need to submit physical applications to each of these agencies in this regard.

I will recommend conscious monitoring of the Platform and ancillary systems to ensure the integrity of the system, its user interface as well as the backend; the proper training, supervision and management of the personnel who manage these systems and processes, to reduce the incidences of downtime and to ensure seamless, hitch-free and glitch-free systems and processes. This will ensure that the laudable aims of this streamlined process are achieved and that they do not, in reality, produce a counterproductive effect.

The rationale for the deemed approval provision is to give recourse to the private sector when the regulator fails to do the needful within the stipulated time. However, do you think it could also serve as a loophole through which subpar applications may sail through?

Oh yes, I believe this is an issue that may arise. However, such sub-par application may be successfully challenged in court if cogent reasons are presented.

Read also: Afia TV, first south-eastern television on DSTV partners Anaedo TV

I am also of the opinion that the regulator whose approval has been deemed to have been granted in such circumstances, could retroactively review such application/deemed approval to ensure the integrity of the systems and records and ensure that only bonafide, compliant and grant-worthy applications have been so granted and that malafide or incompetent applications have not slipped through as a result of such inadvertence or loophole. This would go a long way in ensuring that the integrity is maintained and there is no slippery slope that could lead to a collapse of the relevant systems.

Has the issue of the multiplicity of regulators been resolved by the BFA?

Yes, the issue of the multiplicity of regulators appears to have been addressed to a large extent by the Act. For example, the BFA single window platform for the relevant MDAs present at the ports (Airport and Seaport). This single window platform and the composition of a singular joint task force comprising of members of these MDAs will go a long way in discarding administrative bottlenecks and undue bureaucracies and the delays which they occasion.

The Act has also seemingly streamlined the operations of the Standard Organisation of Nigeria (SON) to quality assurance for only goods imported into Nigeria and not for goods manufactured in Nigeria. Some other agencies which regulate goods manufactured in Nigeria are NAFDAC and the FCCPC. Removing SON from this category would definitely reduce the incidence of the multiplicity of regulators performing duplicated roles.

However, while most of the provisions are laudable and applaudable, the Act does not seem to fully address or resolve the issue of multiplicity, as there remain some grey areas that could possibly create uncertainty or delay in the real-time execution of the Act. For example, clear roles need to be assigned to the regulators, such as specifying the lead regulator or MDA for the new single station interface, or the need to also provide relevant timelines to guide the inter-agency collaboration and verification with respect to a ‘one government directive’.

MDAs are required to have a Service Level Agreement, how instrumental is this for improving the business climate?

The statutory codification of Executive Order 001 with respect to the regulation of MDAs, via the Act, is a welcome development. The Act requires that these service-level agreements which contain – a list of products or services rendered, timelines, documentation requirements, applicable fees and a summary of the procedure for the application- are to be on the websites of the various MDAs. These provisions would allow for increased transparency, and accountability and also enable accessibility to requisite information for processing approvals and rendering of services. This will also help instil confidence in the minds of the public, relevant stakeholders and companies/customers of these MDAs who transact with or interface with these MDAs. Also, it will serve to guide the MDA in the conduct of its activities and will consequently result in a faster, more transparent and more hitch-free process with minimal disruptions.

One of the concerns highlighted by stakeholders is the timelines under which MDAs are mandated to perform some tasks. For instance, CAMA must automate all processes within 14 days of the Act coming into effect. Based on your knowledge and experience, is this feasible?

The rationale behind the timelines, I believe, is to put the various MDAs on their toes and ensure the speedy processing of applications. This is much welcome and quite commendable, as it is very much in line with the ease of doing business drive of the Federal Government of Nigeria and is expected to achieve that result.

I would say, considering the various existing factors and prevailing realities, it may, indeed, be impracticable for the Corporate Affairs Commission to fully comply with this provision with respect to the automation of all its processes within 14 days from the coming into force of the Act, but we are convinced that same can be achieved within a very short time, perhaps in a matter of months.

I am also of the opinion that the regulator whose approval has been deemed to have been granted in such circumstances, could retroactively review such application/deemed approval to ensure the integrity of the systems and records and ensure that only bonafide, compliant and grant-worthy applications have been so granted.

We are optimistic that CAC will build on their successes, learn from and adequately address the experienced and visible challenges of the existing e-system and put in place a fully digitalized process for every facet of its operations as required by the Act. If this is done, I believe that the challenges in giving effect to the intention of this provision will be quite minimal.

I also recommend that CAC could also take a step further with respect to its digitization of its processes to ensure the constant provision of proper technical training for its personnel to address and reduce the incidence of hiccups, downtime, and non-responsiveness or glitches to its relevant sites and e-system.

I would similarly recommend that CAC should make the necessary investment, as it considers necessary, in its ICT infrastructure and place premium attention and supervision to ensure that it receives good value for its monies spent in this regard to achieve a digital system that is in line with global best practice.

At the NBASBL – PEBEC sensitization forum, you indicated a hope that future attempts to improve the ease of doing business in Nigeria will address CBN’s powers as it relates to stipulating the rate at which big foreign corporates convert export proceeds – What do you think should be the appropriate course?

I believe that this is quite crucial and surely matters, as it fundamentally affects the profit and loss margin of a company where there is a huge disparity between the CBN exchange rate and that of the black market since the black market prices are usually higher. A company that is unable to buy FX from CBN due to some restrictive policy of CBN is left with no choice but to source FX at its own rate from the black market, faces an uphill task and is consequently exploited, suffers losses or outrightly defrauded. Such a company would be forced to sell goods at a higher price to cover the extra sum paid in sourcing for FX, this puts the company at a risk automatically and for foreign companies like CFAO which would have to repatriate funds to its parent company doing such at CBN rate would definitely affect the export proceeds negatively.

While there may be no hard and fast rule to resolving this situation owing to its complexity and the unstable nature of the Dollar to Naira exchange rate, it would serve to help if a standard guideline could be given by CBN to ensure some form of equity in the import and export of FX rates and this will most certainly make Nigeria very attractive for foreign investors.

Do we need a regulator for the regulators? And should it be PEBEC?

Yes, I believe there should be a regulator for the regulators to oversee the implementation of the BFA. I believe that the principle of checks and balances could be well applied here as a suitable reason for a regulator to also be regulated or to at least be subject to some form of higher authority, as a regulator need not be a law unto itself. On the other hand, however, it could be argued that following such reasoning, there would be no end to such requirement, as who will then regulate the final regulator? The short answer to such a question in my opinion is “the Court”.

The PEBEC could serve as the proposed regulator of the regulators, as it will only be advantageous to have PEBEC, a council of the Presidency, whose brainchild the BFA is, to act as a supervising body, regulating and superintending over the regulators to ensure that the aims and objectives of the Business Facilitation Act are being rigorously maintained and complied with and that the intentions and intendments are not being jeopardized by the actual actions or inactions of the regulators.

An alternative however, would be for another agency of Government, which could also be an Ombudsman or a Board to be set up for this purpose, having the requisite power to enforce the implementation of the Act and who could be led by PEBEC with veto power, or who could receive feedback and directives from PEBEC from time to time for the purpose of giving effect to the objectives of the Act. Such action may enable PEBEC to preserve its focus, ward off interference from governmental agencies which are to be so regulated, and also enable it to continue to focus on fathoming ways to improve the ease of doing business landscape in Nigeria.

Such an agency could be a separate, independent body established via the amendment of the BFA or otherwise and could have its funding come directly from a special government trust fund to secure its independence, Such a body could be enabled to give administrative rulings having the force of a court order, akin to the National Information Technology Development Agency – Nigeria Data Protection Regulation – Nigeria Data Protection Bureau (NDPB) situation where NDPB is a body created to oversee the implementation of the NDPR.

The Court, however, in our view and as we should always remember, remains the final regulator and arbiter of all things brought before it.

Currently, Nigeria ranks 131 in the Ease of Doing Business Index, where do you suppose we might land at the next evaluation if the BFA is implemented to the letter?

While it may be quite challenging to predict an exact ranking at the next evaluation exercise, it is foreseeable and actually quite inevitable that the implementation of the BFA to the letter and the expected impact of same on the ease of doing business in Nigeria is very likely to see Nigeria take a significant leap from its current position to rank among the leading African countries in the next evaluation.

My optimistic prediction also takes into consideration the evaluation of previous years which has seen Nigeria move a cumulative number of 30 places and more in the World Bank Ease of Doing Business Index (DBI) even without the existence of the BFA.

In view of the upward trajectory and with the passing of the BFA into law, it could also be envisaged that, if properly implemented and with the required cooperation of all relevant stakeholders, Nigeria could indeed nestle among the Top 100 in the World Bank Ease of Doing Business Index (DBI) in the coming years.