Almost three years after The Start-up Act, was signed into law in Nigeria, the jury is still out as to whether or not it has made any difference at enhancing the development and growth of the Nigerian Startup sector and encouraged innovation and entrepreneurship for startups. In October 2022, Nigerian president at the time, signed the Start-up Act, which aimed to enhance the development and growth of the Nigerian Startup sector and encourage innovation and entrepreneurship for startups. As a result of this Act, there has no doubt been a lot of regulatory attention on Start-ups in the country. A start-up can be referred to as a company that is in the early or initial stages of business or development. According to the Nigerian Startup Act, 2022, a start-up is a company which has been in existence for a period not more than 10 years.

Generally, all companies, whether start-ups or not, must satisfy certain regulatory requirements in order to remain operational and avoid sanctions by regulators. It is therefore necessary for Start-ups to stay informed of the compliance requirements relevant to them and to comply with those requirements.

Below are some of the regulatory requirements Start-ups should watch out for

1. Incorporation of Company: It is a mandatory requirement that all businesses in Nigeria must be incorporated with the Corporate Affairs Commission (CAC) in accordance with the Companies and Allied Matters Act (CAMA), 2020. Incorporation grants your company legal identity and is mandatory before an organisation commences business.

2. Tax Registrations and Filings: Start-ups must register with the Federal Inland Revenue Service (FIRS) and State Inland Revenue Service for remittance of Company Income Tax (CIT), Value Added Tax (VAT), Personal Income Tax and Withholding tax (WHT) where applicable. Upon registration with the FIRS, a company is issued a Tax Identification Number (TIN), which serves as the company’s identification number for all dealings with the federal tax authorities. Failure to register for tax will attract sanctions from the FIRS. The first CIT must be filed within 18 months of incorporation, and subsequently within six months of their financial year-end. Companies are also required to file and remit VAT on or before the 21^st day of the month following that which the transaction was made. Remittance of Personal Income Tax or PAYE (Pay As You Earn) on behalf of local employees are to be filed monthly to the state government where the worker resides on or before the 10^th day of the month following the month of deduction. Additionally, employers are required to file annual PAYE returns not later than 31^st January in respect of all employees in its employment in the preceding year. WHT returns are to be filed monthly within 30 days from the date the amount was deducted or the time the duty to deduct arose. Failure to file the relevant tax returns result in penalties and tax liabilities.

3. Post incorporation filings: Any changes in any company’s structure, such as directorship, shareholding, registered address, etc. must be filed with and approved by the CAC. Annual returns (Statement of Affairs if the company has not commenced business) must also be filed to maintain active status with the CAC. For start-ups, the first annual returns must be filed within 18 months of incorporation of the company and subsequently on an annual basis. Failure to file annual returns could result in the company being declared inactive and ultimately deregistered. Also, late filing of annual returns attracts a penalty for each year of default.

4. Industry-Specific Licenses and Permits: Depending on the sector in which you operate, specific licenses or permits from regulatory bodies may be required. For example, sports betting companies require licenses from the state lottery boards and financial services companies require licenses from the Central Bank of Nigeria, Securities and Exchange Commission etc. For a company with foreign participation, it is required to obtain a business permit from the Federal Ministry of Interior which allows the company to commence business operations in Nigeria.

5. Mandatory Meetings: Companies are mandated to hold Annual General Meetings (AGM) and board meetings. Companies may hold extraordinary general meetings as they deem fit. For a start-up company, the first AGM must occur not later than 18 months of incorporation, with subsequent AGMs held no later than 15 months after the last AGM. Regarding board of directors’ meeting, the first board meeting should take place within six months of incorporation. Subsequently, the Directors may have meetings from time to time as they deem necessary.

6. NSITF Contribution and Pension: Employers must contribute 1% of their employee monthly payroll to Nigerian Social Insurance Trust Fund (NSITF) every year and remit monthly pension contribution of 8% for the employee and 10% for the employer with an approved Pension Funds Administrator (PFA) not later than 7 days of payment of salary every month. Start-ups must make their first NSITF contribution within two years of commencing operations. Companies that fail to make the required contribution to NSITF, shall pay a fine of at least 2% of the amount due to be remitted, in addition to the amount to be paid.

7. Nigerian Data Protection Commission Registration and Data Audit: Companies controlling or processing personal data must register with the Nigerian Data Protection Commission (NDPC) and file annual data audit reports. These companies are referred to as data controllers and data processors of major importance. Start-ups that control and process data are mandated to register with the NDPC upon incorporation failure to do so or late registration incurs penalties.

8. Brand Protection: Although not mandatorily required, Start-ups and existing companies are advised to protect their intellectual property or intangible assets by registering trademarks, patents, and copyrights with the Federal Ministry of Industry, Trade, and Investment. This prevents competitors from unlawfully copying, counterfeiting and registering your brand.

9. Corporate Governance: In Nigeria, companies are required to adhere to corporate governance best practices to ensure proper management. Companies in some specific industries are also required to set up sub-committees to effectively undertake the business of the companies. For example, some corporate governance requirements can be found under CAMA 2020, the Nigerian Code of Corporate Governance (NCCG), 2018, the Code of Corporate Governance for Public Companies (CCGPC) 2011; Code of Corporate Governance for Banks and Discount Houses in Nigeria 2014, amongst others. Start-ups are required to comply with the codes relevant to their industries.

9. Nigerian Investment Promotion Commission (NIPC) Registration: The Nigerian Investment Promotion Commission (NIPC) is a government agency established to encourage, promote and coordinate investments in Nigeria. Whether wholly or jointly owned by foreigners, start-ups intending to operate in Nigeria must register with the NIPC before the commencement of business operations.

10. National Office for Technology Acquisition and Promotion (NOTAP) Registration: Nigerian companies seeking to enter into contracts or agreements with a foreigner for the transfer of foreign technology to Nigerians are expected to register the contracts with NOTAP. Failure to register the contract will however not affect the validity of the contract but will prevent the Nigerian entity from making payments from Nigeria through any licensed bank in Nigeria to any person outside Nigeria.

11. Special Control Unit Against Money Laundering (SCUML) Registrations: Designated Non-Financial Institutions (DNFIs) which include construction, consulting, financial services, tax companies, etc. must register with the Special Control Unit Against Money Laundering (SCUML) of the Economic and Financial Crimes Commission (EFCC) and obtain a registration certificate. DNFIs are also expected to submit their cash-based transaction reports and Currency Transaction Reports to SCUML for onward forwarding to the Nigeria Financial Intelligence Unit (NFIU).

Conclusion

Almost three years after The Start-up Act, was signed into law, the jury is still out as to whether or not it has made any difference at enhancing the development and growth of the Nigerian Startup sector and encourage innovation and entrepreneurship for startups. There are numerous and enormous mandatory regulatory requirements which Start-ups (and existing companies) must comply with in Nigeria. Navigating regulatory landmines in Nigeria is vital for the success and sustainability of any business. Regulatory compliance keeps companies legally protected, helps them  identify and mitigate risks and enhances operational efficiency.

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

The post Regulatory Compliance Checklist for Start-ups in Nigeria first appeared on Goldsmiths Solicitors.

An International Money Transfer Operator (IMTO) is a company approved by the Central Bank of Nigeria (CBN) to facilitate the transfer of funds from individuals or entities residing abroad to recipients in Nigeria. Cross-border money remittances into Nigeria by any financial institution are regulated by the CBN. Therefore, any person or entity desiring to provide inbound cross-border money remittance in Nigeria is required to be licensed as an IMTO with the CBN. Under the previous regime provided by the Guidelines on International Money Transfer Services in Nigeria, 2014, IMTOs were able to engage in both inbound and outbound international money transfer but this is no longer the case following the new Guidelines issued by the CBN in January 2024 which restrict IMTOs only to inbound international money transfers.

To obtain an IMTO license in Nigeria, an applicant must meet specific eligibility requirements. These requirements would usually include share capital, policies and other documentary requirements.

The key regulatory framework applicable to IMTOs in Nigeria is the CBN Guidelines on International Money Transfer Services in Nigeria, 2024. These Guidelines outline the permissible and non-permissible activities for IMTOs, requirements to obtain IMTO license, etc.

Permitted Operations for IMTOs

IMTOs are now permitted to process only inbound international money transfer transactions.  This means that IMTOs can only accept and transfer monies to persons resident in Nigeria or render money transfer services towards family maintenance or in favour of foreign tourists visiting Nigeria, etc.

Non-Permitted Operations

IMTOs are prohibited from engaging in outbound transactions and purchasing foreign exchange from the domestic foreign exchange market for settlement. IMTOs are strictly limited to the permitted activities and any activity beyond the permitted operations is prohibited.

Procedure for Obtaining IMTO License from the CBN

The application for IMTO license is made in two stages which are Approval-in-Principle (AIP) and Final Approval.

1. Approval-in-Principle

An applicant of an IMTO license is required to first apply to the CBN for the grant of an Approval-in-Principle. The application is made to the Director of the Trade and Exchange Department of the CBN. At this stage, the applicant is required to pay a non -refundable application fee to the CBN and submit the required supporting documentations. The documents required for the purpose of obtaining Approval-in-Principle include:

1. Approval to operate in other jurisdictions or agency agreement
2. Evidence of tax clearance and incorporation documents in Nigeria
3. Ownership structure of the IMTO
4. Board of Director’s approval to operate international money transfer services
5. Profile of the company which shall include the Curriculum Vitae, biodata and contact details of the board and management of the company.
6. Credit reports on shareholders and other key officers obtained from a licensed credit bureau
7. Minimum share capital requirement of $1,000,000 (One Million USD) for foreign IMTOs and the equivalent in Naira for local IMTOs.
8. Any other information or documents as may be required by the CBN.

The CBN will review the application together with the supporting documents and decide whether or not to grant Approval-in-Principle. The grant of Approval-in-Principle by the CBN does not authorize the commencement of business operations but only allows the applicant to proceed to open bank account and process pre-operational requirements and processes.

2. Final Approval

No later than three months of obtaining Approval-in-Principle, an IMTO is required to apply to the CBN for a final approval to enable it commence business operations. To obtain final approval from the CBN, the applicant must submit the following information and documents to the CBN:

1. Names of Authorized Dealer Banks
2. Detailed business plan which addresses the nature of business, internal control systems and monitoring procedures, security features, three years financial projections, illustration of transaction flows, dispute resolution mechanism, information technology policy, etc.
3. Enterprise risk management framework
4. Business continuity plan
5. Project deployment plan
6. Any other information which the CBN may require.

If the CBN is satisfied that the applicant has met the requirements for the grant of a final licence, a licence shall be granted for a period of one year.

Renewal of IMTO License

IMTO licenses are subject to renewal annually upon the payment of the license renewal fee to the CBN on or before 31^st January of the year. The CBN allows the IMTO’s agent bank to cease further transactions with the IMTO where the IMTO fails to make a copy of its renewal license available to the agent bank within the first quarter of the year.

Prohibited Entities

The prevailing CBN IMTO regulations prohibit all banks and financial technology (FinTech) companies from providing IMTO services. However, banks can act as agents to IMTOs. The implication is that banks and FinTech companies cannot apply to the CBN to obtain IMTO licenses.

Under the previous IMTO regulatory regime, banks and FinTech companies were eligible to obtain IMTO license and provide IMTO services.

Conclusion

International money transfer services in Nigeria are regulated by the CBN and it is required that IMTO license is obtained from the CBN before any person or entity can provide international money transfer services in Nigeria. The CBN has set the minimum shared capital and documentations required for applicants of IMTO license in Nigeria. Banks and FinTechs are prohibited from operating an IMTO License.

IMTOs can now only engage in inbound international money transfer services and are prohibited from outbound money transfers. IMTO license is processed in two stages of “Approval-in-Principle” and “Final Approval”. The IMTO license is valid for one year and subject to renewal on or before the 31^st of January each year. 

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

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2024 saw significant changes in Nigeria’s legal and regulatory landscape, with notable developments across various sectors including financial services, oil and gas, energy, transportation, etc.  Significant judicial decisions were also delivered by the courts which shaped the tax and gaming landscapes in Nigeria. This recap is divided into four parts representing the four quarters of the year, highlighting what we think are the most impactful laws and regulations, reforms, and judicial decisions in 2024.

1^st Quarter (January – March 2024)

Forex policy reforms were implemented by the Central Bank of Nigeria (CBN) with the aim of stabilizing the Naira, fostering economic growth and the provision of agricultural funding to support food production. Financial policy and regulations were revised by the CBN to ensure the financial industry players operate within a well-regulated environment ensuring the integrity of the financial services sector.

• On 5 January 2024, the Supreme Court of Nigeria delivered a judgment in the case of National Inland Waterways Authority (NIWA) v. The Lagos State Waterways Authority (LASWA). The Supreme Court reaffirmed the power of the Federal Government through the National Inland Waterways Authority (NIWA) to control the activities on the country’s waterways. The decision of the court settled the dispute between NIWA and Lagos State over the appropriate party with regulatory rights over the country’s waterways with the decision of the court in favour of NIWA.
• On 18 January 2024, the National Agency for Food and Drug Administration and Control (NAFDAC) launched the Narcotic Drugs Serialisation Pilot Project, in a bid to strengthen the quality and security of medical products in the country’s drug distribution network. NAFDAC disclosed that the initiative was aimed at combatting the proliferation of substandard and falsified medicines by implementing a traceability system, addressing challenges posed by unscrupulous elements in the pharmaceutical supply chain.
• On 29 January 2024, the CBN issued the Financial Market Price Transparency circular requiring all Authorized Dealers that the CBN has permitted financial markets transactions to be conducted on a ‘’willing buyer will seller’’ basis and therefore expects prices to be quoted and displayed in a transparent manner.
• On 31 January 2024, the CBN issued the Reviewed Guidelines on International Money Transfer Services in Nigeria. The Guidelines stipulate the regulatory requirements that must be met to process and obtain license to provide international money transfer services in Nigeria. The Guidelines revised upward the application fees, capital requirements, etc.
• On 31 January 2024, the CBN issued the Harmonising of Reporting Requirements on Foreign Currency Exposure of Banks to address the growth in foreign currency exposures of banks through their Net Open Position (NOP). Therefore, to ensure the risks are well managed and avoid losses, the CBN issued the guidelines to address it.
• On 2 February 2024, the CBN issued the Cash Reserve Requirement Framework Implementation Guidelines which stated the implementation of a significant policy change by revising the Cash Reserve Ratio (CRR) framework. This update included a reduction in the Loan-to-Deposit Ratio (LDR) compliance requirement from 65% to 50%, aiming to address lending shortfalls among deposit money banks. The revised framework requires banks falling short of this new LDR threshold to allocate 50% of the shortfall as part of their CRR with the CBN.
• On 27 March 2024, the Nigerian president issued a directive titled Implementation of a Single-Digit Tax System which aims to streamline Nigeria’s tax structure by reducing the number of taxes to a maximum of nine. This initiative seeks to simplify the tax code, alleviate the tax burden, and foster a more business-friendly environment. The directive will take effect following the completion of the Presidential Committee on Fiscal Policy and Tax Reforms’ work.
• On 28 March 2024 the CBN issued the Review of Minimum Capital Requirements for Commercial, Merchants and Non-Interest Banks in Nigeria which stipulated new minimum capital requirements for banks. It sets the minimum capital base for commercial banks with international authorisation at N500 billion. The minimum capital base for commercial banks with national authorisation is now N200 billion, while the requirement for those with regional authorisation is N50 billion. Merchant banks are required to have a minimum capital base of N50 billion, while non-interest banks with national and regional authorisations must meet minimum requirements of N20 billion and N10 billion, respectively. All banks are required to meet these requirements within 24 months starting from 1 April 2024 and ending on 31 March 2026.

2^nd Quarter (April – June 2024)

The second quarter saw the enactment of laws and the issuance and revision of key financial regulations by the CBN. The Student Loans Access to Higher Education (Repeal and Re-enactment) Bill, 2024 was enacted. The Cybersecurity levy was set for implementation by the CBN but was eventually suspended due to public outcry over the announcement and the proposed implementation of the levy. The electricity market is also gradually being deregulated by states with some states receiving the approval of the NERC to regulate electricity market within their respective states.

• On 3 April 2024, the Nigerian president signed the Student Loans Access to Higher Education (Repeal and Re-enactment) Bill, 2024 into law. This revised legislation aims to provide financial assistance to indigent Nigerian students by offering interest-free loans through the Nigerian Education Loan Fund. The law is intended to promote accessible higher education and functional skill development for students across the country.
• On 22^nd April 2024, the Federal Government launched a ₦200 billion Intervention Fund Aimed at Supporting Micro, Small, and Medium Enterprises (MSMEs) and Manufacturers. This initiative, introduced by the Bank of Industry, is designed to stimulate local production, reduce import dependency, and enhance Nigeria’s industrial growth. Eligible businesses can access loans under favourable terms, including single-digit interest rates and flexible repayment conditions, to improve capacity, expand operations, and create jobs.
• On 2 May 2024, the Federal Inland Revenue Service (FIRS) issued a directive titled Implementation of Stamp Duty on Mortgage-Backed Loans and Bonds. The Nigerian government directed banks to deduct stamp duty charges on mortgages. This directive is aimed at improving revenue generation from the stamp duty on financial transactions. The charge is applicable to all mortgage transactions and is expected to support government revenue collection. It introduced a 0.375% stamp duty on mortgage-backed bonds. This charge applies to various types of mortgage and legal instruments as specified under the Stamp Duties Act (SDA).
• On 6 May 2024, the CBN issued the Cybercrimes (Prohibition, Prevention, etc) (Amendment) Act 2024 – Implementation Guidance on the Collection and Remittance of the National Cybersecurity Levy. The Guidance required the deduction of 0.5% cybersecurity levy on all electronic transactions. The Guidance exempted certain transactions including loan disbursements and repayment, salary payments, letters of credits, cheques clearing and settlement, etc. The implementation of the Guidance has now been temporarily suspended following protests by the public
• On 7 May 2024, the Corporate Affairs Commission (CAC) issued a public notice titled CAC and Fintech Operators which mandated all Point of Sale (POS) operators in Nigeria to complete their business registration with the CAC by 7 July 2024 which was eventually extended by 60 days to 5 September 2024. This directive by the CAC aligned with the Companies and Allied Matters Act (CAMA) 2020 and the Central Bank of Nigeria’s (CBN) agent banking guidelines which aim to safeguard the operations of FinTechs, improve accountability, and strengthen the economy.
• On 22 May 2024, the CBN issued the Revised Regulatory and Supervisory Guidelines for Bureau De Change Operations in Nigeria. The Guidelines required existing Bureau De Change (BDC) operators to re-apply for a new license in accordance with any of the license categories and meet the minimum capital requirements within six months. New applicants are also required to comply with the Guidelines which supersedes the Revised Operational Guidelines for Bureau De Change in Nigeria dated November 2015. It also categorizes BDC license into tier 1 with permission to operate in any state and tier 2 with permission to operate in only one state.
• On 14 June 2024, the SEC issued a circular titled Implementation of Enterprise Risk Management, it provides that all Capital Market Operators (CMOs) are required to implement an Enterprise Risk Management (ERM) framework that conforms to international standards such as the Committee of Sponsoring Organizations of the Treadway Commission (COSO), the International Organization for Standardization (ISO 31000), Financial Action Task Force (FATF) Recommendations and any other internationally recognized risk management standards. The adoption of comprehensive risk management practices is important in minimizing systemic impact and safeguarding the interests of all stakeholders.
• On 24 June 2024, The Securities and Exchange Commission released a circular titled Revamped E-Dividend Mandate Management System Portal which launched the revamped e-Dividend Mandate Management System (e-DMMS) Portal. This is noted to be an important step towards curbing the growth of unclaimed dividend and generally improving investor experience in the Nigerian Capital market. The revamped e-DMMS Portal introduces a “self-service interface” that allows investors apply to mandate their accounts for e-dividend virtually, without having to visit a Registrar or a Bank.
• On 28 June 2024, the Nigerian president signed an executive order eliminating tariffs, excise duties, and VAT on imported pharmaceutical inputs. This is part of a broader initiative to support local drug manufacturers and improve the availability of essential medicines in Nigeria. The executive order is intended to make local pharmaceutical producers more competitive by reducing costs, thereby ensuring more affordable healthcare for Nigerians.

3^rd Quarter (July – September 2024)

The third quarter of 2024 saw a lot of regulatory activities by regulators in Nigeria. The CBN, SEC and NCC were all very active as they issued regulations and initiated reforms applicable to operators in the various sectors which they regulate.  The Federal Government introduced the Deduction of Tax at Source Regulations 2024, aligning with the National Tax Policy and exempting certain sectors like telecommunications. Significant judicial decisions were also handed down as in the case of the Federal High Court allowing companies to have single shareholder regardless of the incorporation date.

• On July 2024, some states including Imo, Enugu, Ekiti, and Ondo received the approval of the Nigerian Electricity Regulatory Commission (NERC) to regulate their electricity markets in line with the provisions of the Electricity Act, 2023. This allows the states to oversee power generation, transmission, and distribution within their jurisdictions, marking a significant step towards decentralizing electricity regulation in Nigeria.
• On 11 July 2024, the Supreme Court of Nigeria delivered judgment in the case between the Attorney General of the Federation v. Attorney General of Abia State & 35 Others. This landmark decision reinforced the financial autonomy of local governments, declaring it unconstitutional for state governors to withhold funds allocated to local governments, dissolve local government councils, or appoint caretaker committees. The court mandated that funds meant for local governments be paid directly into their accounts, ensuring their independence and strengthening democratic governance at the grassroots level.
• On 19 July 2024, the CBN issued the Guidelines on Management of Dormant Accounts, Unclaimed Balances and Other Financial Assets in Banks and Other Financial Institutions in Nigeria. The Guidelines revised the 2015 guidelines on the subject matter. The Guidelines aim to reunite beneficial owners with unclaimed balances and financial assets, holding funds in trust for beneficial owners, etc. It also states the roles of key stakeholders including the CBN, Nigeria Deposit Insurance Commission (NDIC), financial institutions, account owners and beneficial owners, etc.
• The Nigerian Communications (Consumer Code of Practice) Regulations, 2024 with a commencement date of 29 July 2024 was issued by the Nigerian Communications Commission (NCC). The Regulations aim to prescribe the procedures to be followed by licensees in determining the contents and features of a consumer code of practice and preparing same for approval.
• The NCC issued the Nigerian Communications (Type Approval) Regulations, 2024 with a commencement date of 29 July 2024. The regulations apply to every person providing communication services, manufactures or supplies communications equipment. It also prescribes the processes for the type of approval of communications equipment and identify applicable technical standards while ensuring that communications equipment used in communications networks are safe and do not compromise national security.
• On 29 July 2024, the Nigerian president signed the National Minimum Wage Act 2019 (Amendment) Bill into law, raising Nigeria’s national minimum wage from ₦30,000 to ₦70,000 per month, following extensive negotiations between the Federal Government, labour unions, and the private sector.
• On 30 July 2024, the Federal High Court ruled in Primetech Design and Engineering Nigeria Limited v. The Corporate Affairs Commission (CAC) in favour of allowing all private companies in Nigeria regardless of their incorporation date, to have a single shareholder under the Companies and Allied Matters Act 2020 (CAMA 2020). This decision clarifies that section 18(2) of CAMA 2020 applies universally to both new and older private companies. Previously, there was uncertainty about whether this provision applied only to companies incorporated before the enactment of CAMA 2020. The ruling is significant as it removes restrictions on private companies transitioning to a single shareholder structure without the risk of being wound up by the regulator, offering greater flexibility for business growth.
• On 2 September 2024, the Nigerian Investment Promotion Commission (NIPC) the Revised Service Fee Schedule for Business Registration and Pioneer Status Incentives (PSI) Applications. This increased the fees for applying for business registration and obtaining pioneer status incentives, conducting due diligence, introduced an annual business registration renewal fee, etc.
• On 3 September 2024, the Securities and Exchange Commission (SEC) introduced an electronic filing system to improve the efficiency of the Nigerian capital market. This system aims to reduce listing time for securities and enhance liquidity, enabling quicker access to capital for companies. This is expected to streamline approvals, increase transparency, boost investors’ confidence, and ultimately contributing to the growth of the Nigerian economy.
• On 30 September 2024, the Federal Government introduced the Deduction of Tax at Source (Withholding) Regulations, 2024 which was published in the official gazette and followed by a public notice issued by the FIRS on 2^nd October 2024. These regulations, set to take effect on 1 January 2025 exempt items such as telephone charges, internet data, airline tickets, and out-of-pocket supplier expenses from withholding tax, aligning with the National Tax Policy.

4^th Quarter (October – December 2024)

The final quarter of 2024 witnessed a series of landmark judicial decisions, regulatory developments, and advancements in Nigeria’s economic and financial landscape. Landmark court decisions signalling a shift toward greater accountability and adherence to the rule of law. Regulatory agencies introduced policies aimed at fostering transparency. These developments collectively highlight Nigeria’s strides toward modernization, sustainable growth, and global competitiveness.

• On 2^nd October 2024, the Federal High Court sitting in Abuja ruled in the case between Abubakar Marshal v. Vehicle Inspection Officers (VIO) that VIOs lack statutory authority to stop private vehicles, demand roadworthiness certificates, impound vehicles, or impose fines on motorists. The court clarified that the requirement for roadworthiness certificates applies exclusively to commercial vehicles under existing laws. The court described the actions of the VIOs, including the imposition of fines and confiscation of private vehicles as oppressive, unlawful, and without legal foundation.
• Value Added Tax Modification Order 2024 and Notice of Tax Incentives for Deep Offshore Oil & Gas Production in accordance with the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024 were issued by the Federal Government. The VAT Modification Order 2024 exempts energy products including diesel, LPG, CNG and clean energy infrastructures from VAT while the Notice of Tax Incentives introduces new tax reliefs to attract investments into Nigeria’s deep offshore Oil & Gas projects.
• On 3 October 2024, the Federal Inland Revenue Service (FIRS) issued a public notice notifying taxpayers that The Deduction of Tax at Source Withholding (WHT) Regulations, 2024 would take effect from 1^st January 2025 ending the current withholding tax regime contained in the Companies Income Tax Act.
• The FIRS launched an Unstructured Supplementary Service Data (USSD) Code on 9 October 2024 for the purpose of improving taxpayers’ satisfaction. The USSD enables taxpayers to retrieve their Taxpayers Identification Number (TIN) verify Tax Clearance Certificate (TCC), etc.
• On 7 October 2024, the Federal High Court, Lagos struck out the suit commenced by the Manufacturers Association of Nigeria (MAN) v. National Electricity Regulatory Commission (NERC) & 11 Others which challenged the implementation of electricity tariff review on the grounds of the suit being an abuse of court process having not being commenced in accordance with due process and no disclosure of reasonable cause of action.
• In October 2024, Moniepoint, a Nigerian FinTech startup became a unicorn by getting a $1 billion valuation after raising $110 million in Series C funding which highlights the rapid growth and importance of FinTech payment providers in Nigeria.
• In November 2024, the Federal Government announced its plan to establish a national data bank to serve as a centralized platform for the collection, analysis and dissemination of transport-related data for the purpose of informed decision-making and policy formulation.
• On 15 November 2024, the Supreme Court of Nigeria declined to declare the Economic and Financial Crimes Commission (EFCC), Nigerian Financial Intelligence Unit (NFIU) and Independent Corrupt Practices and Other related offences Commission (ICPC) as illegal and unconstitutional in the suit between Attorney General of Kogi State & 18 Ors v. Attorney General of Federation suit No: SC/CV/178/2023).
• On 22 November 2024, the Supreme Court of Nigeria in the case between Lagos State Government & Ors v. Attorney General of Federation & Anor suit No SC/1/2008 nullified the National Lottery Act, 2005 and limited its application to only the Federal Capital Territory (FCT). The National Lottery Act, before the decision of the Supreme Court, applied in the entire country to sports betting and lottery licensing.
• On 29 November 2024, the Central Bank of Nigeria (CBN) released Revised Guidelines for The Nigerian Foreign Exchange Market (NFEM), marking a significant overhaul of the country’s FX operations. The new framework consolidates all FX windows, redefines the roles of market participants, and introduces stricter compliance and transparency measures. Key provisions address the roles of Authorized Dealers, Bureaux de Change (BDCs), pricing mechanisms, interbank trading, compliance, and reporting standards. The guidelines mandates that all BDC transactions comply with licensing terms and be reported in real time. Furthermore, all FX transactions must now be priced through the Electronic Foreign Exchange Matching System (EFEMS), a centralized platform that also publishes daily FX rates for public access, underscoring a strong emphasis on pricing transparency and rigorous reporting requirements.
• On 3 December 2024, the Lagos State Governor signed the Lagos Electricity Bill 2024 into law, marking a significant step toward energy independence for Lagos State. This legislation establishes the Lagos State Electricity Regulatory Commission to oversee the electricity market, regulate power generation, and set tariffs. It also created the Lagos State Electrification Agency to promote off-grid solutions and enhance electricity access in underserved areas. Additionally, the bill introduces the Lagos Electrification Fund to finance the state’s grid expansion and off-grid projects with a focus on renewable energy, energy efficiency, and decarbonization.
• On 11 December 2024, the Central Bank of Nigeria (CBN) imposed a fine of ₦1 billion each on Moniepoint and OPay for regulatory non-compliance. These penalties were part of the CBN’s routine audits of the activities of FinTechs which identified compliance issues within these companies. The fines underscore the CBN’s commitment to enforcing strict regulatory standards in Nigeria’s rapidly expanding digital financial services industry. On 16 December 2024, the Federal Competition and Consumer Protection Commission (FCCPC) rejected Coca-Cola Nigeria Limited’s appeal against a N186 million fine. The fine was imposed due to deceptive branding practices, including misleading product descriptions and unfair marketing tactics. The FCCPC’s decision underscores its commitment to protecting consumers and ensuring fair and honest practices in the Nigerian market.
• On 16 December 2024, the Securities and Exchange Commission published the Re-exposure of Amendments to Rules on Digital Assets Issuance, Offering Platforms, Exchange and Custody. The proposed amendment is to extend the rules to cover new virtual assets activities and business models such as cross chain transfer services, on/off-chain transmission orders, advisory on virtual assets investment, placing and distribution of virtual assets, etc.

Conclusion

2024 has been a year of significant changes and reforms in Nigeria’s legal and regulatory landscape. The government introduced impactful rules and regulations including policy changes in areas such as tax, financial services sector, capital markets, electricity, minimum wage, with regulations like the Deduction of Tax at Source (Withholding) Regulations 2024, Lagos Electricity Law 2024 and the National Minimum Wage Act reflecting efforts to improve economic conditions. The Central Bank of Nigeria, the Securities Exchange Commission and Federal Inland Revenue, the Nigerian Communications Commission, etc. also issued new and amended guidelines and regulations to provide updated regulatory requirements and obligations of players in the regulated industries. The judiciary also delivered impactful decisions such as the Federal High Court’s ruling on the issue of single shareholder pursuant to the Companies and Allied Matters Act, 2020 and the decision of the Supreme Court nullifying the application of the National Lottery Act in the federating 36 states of the country.  As we approach the new year, we extend our sincere gratitude to all our clients for their continued trust in us and wish you a Merry Christmas and a prosperous New Year 2025.

Please note that the contents of this Article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

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Telemedicine is the delivery of healthcare services remotely using information and communication technologies which allow real-time audio or audio-visual patient-health provider communication, diagnosis and treatment through laboratory tests and drug prescriptions. With the expansion of internet penetration in Nigeria, telemedicine has become an emerging business in Nigeria and has begun to experience significant growth. This is partly driven by the increasing need for accessible healthcare, the advancement of technology, the outbreak of Covid-19 which resulted into limited physical consultations with healthcare providers and the mass exodus of health care professionals from Nigeria in the last few years. Telemedicine also provides accessibility and thereby bridges the gap in healthcare access, especially in rural and underserved areas where medical facilities and professionals are scarce. Recently, there has been an increased interest in telemedicine business from both local and foreign players in that space.

Presently, there is no single substantive law regulating the operation of telemedicine in Nigeria. However, the operation of a telemedicine business is subject to the specific requirements of certain laws which include the Companies and Allied Matters Act, 2020 (CAMA), Nigeria Data Protection Act, 2023, Medical and Dental Practitioners Act, 1988, the National Health Act 2014, Pharmacists Council of Nigeria (Establishment) Act, 2022, Nursing and Midwifery (Registrations, etc) Act, 1979, Constitution of the Federal Republic of Nigeria, 1999, etc.

This article highlights the regulatory requirements necessary for the operation of telemedicine business in Nigeria.

Regulatory Requirements

Although there is no specific law regulating telemedicine in Nigeria, telemedicine is not unregulated. There are certain regulatory requirements which broadly apply to the operation of a telemedicine (business) in Nigeria. These requirements include:

1. Company incorporation: One of the requirements for the operation of any business in Nigeria, is the incorporation of a local company as required by the CAMA. Thus, to operate a telemedicine business in Nigeria, a local company has to be incorporated with the Corporate Affairs Commission (CAC). There are different share capital requirements which apply depending on whether the business is locally or foreign owned. In addition to incorporating a local company, a company with foreign participation is also required to be registered with the Nigerian Investment Promotion Commission (NIPC) and also obtain a business permit from the Federal Ministry of Interior.

2. Registrations and Licensing: Healthcare providers must possess the necessary qualifications, professional licenses and registrations to provide healthcare services to patients in Nigeria. These registrations and licenses are provided by the Medical and Dental Practitioners Act, 1988, Nursing and Midwifery (Registrations, etc) Act, 1979 and the Pharmacists Council of Nigeria (Establishment) Act, 2022. Depending on the model of operation, it may also be necessary to obtain certain licenses/registrations from the Federal Ministry of Health, National Agency for Food and Drug s Administration and Control (NAFDAC), etc.

In Lagos state, health facilities including telemedicine are to be registered with the Health Facility Monitoring and Accreditation Agency (HEFAMAA) pursuant to the Lagos State Health Sector Reform Law, 2006 with the registration renewable annually. 

3. Data Privacy and Protection: The Nigerian Constitution, 1999 guarantees and protects the privacy of citizens and to that extent, the Nigeria Data Protection Act, 2023 (NDPA) which amplifies the constitutionally guaranteed right to privacy, is the regulatory framework applicable to the collection, processing and storage of (patients’) data. Telemedicine providers are required to process patients’ data in accordance with the requirements of the NDPA. The NDPA regulates the cross-border transfer of patients’ data and also provides for security measures to be adopted by telemedicine businesses to ensure the security and protection of patients’ data.

The NDPA also provides for the obligation to register as a data processor/controller. Since telemedicine businesses collect and process patients’ data including health records, they are required to register with the Nigeria Data Protection Commission (NDPC) as data controller/processor.

4. Technology Transfer: The National Office for Technology Acquisition and Promotion Act 1979 (NOTAP Act) regulates the transfer and acquisition of foreign technology by companies in Nigeria by making the contracts and agreements to transfer technology registrable with NOTAP. Invariably, the transfer of foreign healthcare technologies such as patents to a telemedicine company would be subject to registration with NOTAP.

5. Confidentiality: Patients’ health information is to be obtained and held confidentially by telemedicine providers without disclosing it or allowing access to it by unauthorized third parties as required by the National Health Act, 2014. Thus, there is an obligation to put in place measures to ensure that unauthorized persons do not have access to the medical information and health records of patients. Failure to comply attracts sanctions which include monetary penalties and terms of imprisonment.

Other Legal Considerations

To ensure seamless operation in Nigeria, telemedicine operators should pay particular attention to the following:

1. Records System: It is required as a matter of best practice and in line with the requirements of applicable laws and regulations for telemedicine providers to develop and maintain a robust records system for the management of the health records of patients. These records enable the providers to easily keep records of consultations, diagnoses, prescriptions, hospital referrals, etc. provided to patients.
2. Privacy policy: Developing a privacy policy which elaborately provides for the essence of the collection and retention of patients’ information and health records. The privacy policy should be in compliance with the requirements of the Nigerian Data Protection Act, 2023 and its subsidiary regulations.
3. Data Security: Telemedicine operators should have a robust data security system capable of protecting the information and health records of patients from data breaches and violations. Some of the data security measures that could be adopted include anonymisation, pseudonymisation, encryption, etc. which ensures the integrity and protection of patients’ sensitive information and health records.
4. Licence Renewals: Attention must be paid to licenses and registrations renewal deadlines to ensure that providers continuously comply with legal requirements regarding renewal of licences. It is very important that health practitioners including doctors, nurses and pharmacists’ licenses and registrations are up to date.
5. Regulatory Filings: Appropriate returns should be filed with the relevant regulatory authorities to ensure continuous regulatory compliance. Company annual returns should be filed with the Corporate Affairs Commission (CAC) as at when due to avoid the payment of penalties. There is also the obligation to conduct and file data impact assessment reports with the Nigerian Data Protection Commission (NDPC) relating to processing of data that may pose high risk to the confidentiality of patients’ data.
6. Tax Returns: Telemedicine companies are required to pay tax and file tax returns with the Federal Inland Revenue Service (FIRS). In particular, telemedicine companies are obliged to pay companies income tax (CIT) on their profits and file their returns with the FIRS usually within six months from the end of their financial year.

Conclusion

Driven by the increasing need for accessible healthcare, the advancement of technology and the mass exodus of healthcare professionals from Nigeria in the last few years, there has been a marked increase in the provision of telemedicine in Nigeria.  The operation of a telemedicine business in Nigeria is regulated by various laws relating to the incorporation of businesses, licensing and registrations, data processing and protection, confidentiality, etc. Telemedicine providers must ensure that their healthcare professionals’ licenses and registrations are up to date in compliance with applicable laws and regulations.  Contracts and agreements for the transfer of healthcare technologies are required to be registered with NOTAP.

Telemedicine providers are to ensure compliance with applicable laws and regulations relating to data security, regulatory and tax filings with the CAC, NDPC and FIRS, license and registrations renewals and keeping and maintaining robust health record systems that guarantees the confidentiality of patients.

Please note that the contents of this Article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

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With Nigeria being a leading Fintech hub in Africa, we have in last few years witnessed a surge in online money lending service. The operation of money lending business in Nigeria is regulated by the Money Lenders Laws of the various states in Nigeria, the Federal Capital Territory (FCT) and the Federal Competition and Consumer Protection Commission (FCCPC). There are 36 states and a Federal Capital Territory (FCT) in Nigeria and an operator must obtain the money lenders license from the regulatory authority in the relevant state(s) in which they wish to operate or the FCT before commencing operations. It is important to note that where the money lending business is to be carried on in more than one state, a money lenders license must be obtained in each state in which the money lending business is to be carried on. It is a criminal offence to engage in the business of money lending without a money lenders license.

In Lagos State, the money lender’s license is granted by the Lagos State Ministry of Home Affairs. Using Lagos State as a case study, this article explains how to obtain the money lenders license in Lagos State and the digital money lenders registration with the FCCPC. The processes and procedures are similar in other states.

Requirements for Money Lenders License in Lagos State

The Lagos State Money Lenders Law is the principal law which regulates money lending in the state and the regulatory authority responsible for issuing licenses is the Lagos State Ministry of Home Affairs. Money lenders license can only be issued to corporate entities in Lagos state. Thus, any potential investor interested in money lending business is required to first incorporate a company in Nigeria.

The requirements for processing and obtaining a money lenders license in Lagos state are as follows:

1. Incorporation documents including company certificate of incorporation, Memorandum and Articles of Association, etc. of the applicant company issued by the Corporate Affairs Commission (CAC).
2. The minimum share capital of the applicant company is N20,000,000 (Twenty Million Naira). However, where the company has foreign participation, the minimum share capital requirement is N100,000,000 (One Hundred Million Naira).
3. Police Clearance Certificate of two directors of the applicant company.
4. Three (3) years Tax Clearance Certificate (TCC) for the company and for at least two (2) directors.
5. Reference letter from the applicant’s bankers in Nigeria.
6. Proof of payment of the application and processing fees.

The Procedure for Obtaining Money Lender’s License in Lagos State

The procedure for obtaining the money lenders license in Lagos State is initiated with an application to the Chief Magistrate of the Magistrates Court within the magisterial district where the lending company is located and ends with the issuance of a money lenders license to the applicant. The procedure for obtaining the license is highlighted below:

1. An application in the prescribed form is made to the Chief Magistrate of the Magisterial District where the applicant company is located.
2. The Chief Magistrate issues a Money Lenders Certificate (Form B) and a letter addressed to the Permanent Secretary of the Lagos State Ministry of Home Affairs to the applicant company confirming due diligence of the applicant company and recommending the issuance of a money lenders license.
3. An application is made to the Nigerian Police for the issuance of Police Clearance Certificates for two directors of the applicant company.
4. A formal application is made to the Lagos State Ministry of Home Affairs for money lender’s license accompanied with the following documents:
5. Form B and the Letter of Recommendation issued by the Chief Magistrate.
6. Incorporation documents of the applicant company.
7. Three years Tax Clearance Certificate (TCC) of the applicant company and of at least two directors.
8. Police Clearance Certificates for two directors of the applicant company.
9. A reference letter from a commercial bank being the bankers of the applicant company in Nigeria.
10. Proof of payment of the application and processing fees.
11. A physical inspection of the applicant company’s place of business will be carried out by the Lagos State Ministry of Home Affairs upon submission of the application.
12. A Money Lenders License is issued to the applicant company by the Lagos State Ministry of Home Affairs where it is satisfied that all the statutory requirements have been met and the applicant company is considered fit and proper to act as a money lender.

Validity and Renewal of Money Lender’s License in Lagos State

Money lenders license is valid in Lagos State for a period of one year and therefore subject to renewal every subsequent year. To process the renewal of the license, the licensed operator is required to obtain a new Money Lenders Certificate (Form B) from the Chief Magistrate accompanied with the expired license, updated tax clearance certificate and evidence of payment of the renewal fee. Upon being satisfied that the requirements continue to be met, a renewed license is issued.

Registration with the Federal Competition and Consumer Protection Commission (FCCPC).

In 2022, the Federal Competition and Consumer Protection Commission (FCCPC) issued the Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending, 2022 (“the Guidelines”). The Guidelines require digital money lenders to register with the FCCPC before the commencement of business operations. The process of registering with the FCCPC is summarized as follows:

1. The digital money lender is to obtain an Audit Trust Mark from the Nigerian Data Protection Commission.
2. Obtain a compliance Audit Report and Privacy Impact Assessment Report from a duly registered Data Protection Compliance Organisation (DPCO).
3. Obtain and complete the requisite digital money lender’s registration form from the FCCPC. The completed form is to be accompanied with some documents which include:
4. Incorporation documents of the applicant.
5. The company’s terms of use and privacy policy
6. The company’s code of conduct
7. Brief description of the business and details of its groups, subsidiaries and affiliates.
8. Evidence of feedback and complaint resolution mechanism
9. Evidence of payment of the registration fee
10. Obtain and complete the requisite declaration form from FCCPC.

The application is to be submitted to the FCCPC together with the required documents. In practice, the FCCPC allows some flexibility in the registration process by allowing applicants to begin the digital money lender’s registration process while waiting for the Audit Trust Mark and the Compliance Report and Privacy Impact Assessment Report.

Failure to register with the FCCPC may lead to the permanent blacklisting of the digital money lender’s business and the removal of its digital apps from online platforms such as Google Play Store and Apple Store, etc. which will make the money lender unable to transact its business in Nigeria.

Conclusion

With the growth of FinTechs in Nigeria, there has been tremendous growth in the Nigerian online money lending space in the last few years. The business of money lending is regulated in Nigeria by the state governments, the FCT and the FCCPC. An operator is required to obtain a money lenders license in any of the 36 states of Nigeria in which it wishes to carry on business. Individual licenses must be obtained in every state in which an operator seeks to do business. Any company desirous of providing money lending services through any digital platform is required to register with the FCCPC before commencing business in Nigeria failing which its business and digital apps could be permanently blacklisted.

Please note that the contents of this Article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

The post How to Obtain Money Lenders License in Lagos State, Nigeria first appeared on Goldsmiths Solicitors.

This article highlights the requirements, processes and practical considerations to consider when registering imported products with NAFDAC in Nigeria.

Requirements for the Registration of Imported Products with NAFDAC

The requirements for the registration of imported products with NAFDAC will usually include the following:

A. Power of Attorney or Contract Manufacturing Agreement: A power of Attorney is required to authorize a local agent to act on behalf of the foreign manufacturer of the products. The Power of Attorney must be signed by either the Managing Director, General Manager, Chairman or President of the manufacturing company and it should also state the names of the products to be registered. If the foreign manufacturer does not wish to use a local agent, it may set up its own local company in Nigeria in order to register its products in its name, in which case, a Contract Manufacturing Agreement required.

B. Certificate of Manufacture and Free Sale: This is a document that provides evidence that the manufacturer is licensed to manufacture the products in its country of origin and the sale of the products does not contravene the laws of the manufacturer’s own country. It is issued by the relevant health or regulatory authority in the country of manufacture.

C. Comprehensive Certificate of Analysis: The Certificate of Analysis is issued by a quality control laboratory that has evaluated the products to be registered. It must state the brand name and batch number of the products and must also be signed by the laboratory analyst who evaluated the products in the country of manufacture.

D. Certificate of Incorporation: An applicant is expected to submit evidence of company incorporation with the Nigerian Corporate Affairs Commission (CAC). There are two approaches that may be adopted here. The first approach is that a local agent may be engaged and as such the local agent submits its company information and documents to NAFDAC for the product registration. The second approach is that the applicant may incorporate its own local company in Nigeria for the purpose of registering its imported products with NAFDAC.

E. Evidence of Trademark Registration: Trademark registration certificate or acceptance letter issued by the trademark office showing that an application has been made to register the trademark in in Nigeria in the name of the manufacturer.

F. Letter of Invitation for Good Manufacturing Practice: The manufacturer is required to write a letter of invitation addressed to NAFDAC, inviting its officials to visit and inspect the factory of the manufacturer abroad.

G. Labels/artworks: A print out of the label and artwork for the product to be registered is required. There must be a provision for NAFDAC registration number on the label and there must also be provisions for batch number, date of manufacture and expiry date together with other usage and storage instructions.

Product Registration Processes

The imported product registration processes usually involve the application, import permit, laboratory analysis, factory inspection and approval stages.

1. Application

NAFDAC Application form for the product registration is to be obtained and completed with the required information relating to the applicant and the product to be registered. Upon completing the application form, an application letter for the registration of the imported product on the applicant’s letterhead is addressed to NAFDAC. The application letter is to be submitted with the required documents outlined above together with the completed NAFDAC application form.

2. Import Permit

When an application has been successfully submitted and all supporting documents reviewed, an import permit is issued by NAFDAC for the importation of the samples of the product The imported of the sample is to enable NAFDAC conduct laboratory analysis on the products as outlined below. The import permit is usually valid for a period of 12 months. NAFDAC would usually specify how many samples they require.

3. Laboratory Analysis

The imported samples are submitted to NAFDAC laboratory for evaluation. The submission of the samples is accompanied with payment receipt of the official application and processing fee, certificate of analysis and a copy of the import permit. The laboratory analysis may not be successful if the outcome of NAFDAC analysis shows that there are any discrepancies in the information contained in the certificate of analysis. Where this happens, NAFDAC may issue a query for compliance directive. The compliance may involve importing new samples of the products together with an updated certificate of analysis of the products and resubmitting it for a fresh laboratory analysis. This will inevitably affect the times lines for approval discussed below.

4. Factory Inspection

Further to the letter invitation for Good Manufacturing Practice (GMP) and the payment of the required GMP fees, NAFDAC would usually visit the manufacturing facility in the country of origin to inspect it for Good Manufacturing Practice. In practice this visit does not always take place but the fee is still required to be paid.

5. Approval

The application for imported product registration is approved where NAFDAC is satisfied with the documentations provided, the samples provided and the Good Manufacturing Practice of the manufacturer in the country of origin. Upon the approval of the product, notice of registration is issued to the applicant. A unique NAFDAC registration number is also issued to the manufacturer. The registration is valid for 5 years from the date of registration and has to be renewed thereafter for another period of 5 years.

Product Registration Timelines

Depending on the product to be registered, the timelines for registration of imported products could vary between a period of 90 days or 120 days. The timeline is usually 90 days for food products and 120 days for drugs. In practice this is not always possible and registrations have been known to take longer than this due to a combination of factors.

Practical Considerations

In practice, it is not always possible to obtain registration in the timeline stated above. One of the reasons of this is the issuance of compliance directives by NAFDAC. Once a compliance directive is issued by NAFDAC, the clock stops ticking and time begins to count afresh from the period of when the compliance is remedied.  It is immaterial whether or not the compliance was done the same day or a within reasonable period thereafter.

Another possible cause of delay is that upon the submission of samples to NAFDAC, you would have to visit NAFDAC offices several times in person in order to obtain the result of the laboratory analysis as this is not usually communicated by email.

A further factor that may affect the registration is that during the application, the form together with all supporting documents are required to be uploaded online as part of the NAFDAC application process. In practice however, you are also required to submit the hard copies of these documents to NAFDAC offices.

An applicant that decides to register his own local company for the purpose of submitting an application to NAFDAC will have to company with other law relating to company registration in Nigeria including the requirement of obtaining tax registration with the Federal Inland Revenue Services (FIRS) and ensuring that the company is profiled on Taxpro-max for the purpose of validating the company’s profile with NAFDAC. In our experience, this usually takes some time to achieve and may further extend the registration time beyond the timeline provided by NAFDAC for product registration. The company is also required to file its annual returns to the CAC and file its monthly VAT returns whether or not it is trading.

Strike action by NAFDAC officials may sometimes also affect the timelines for the registration of a product with NAFDAC. We have experienced strike action from NAFDAC officials in the past which led to delayed product registration especially at the laboratory analysis stage.

In order to mitigate against most of these factors, it is advisable to ensure that from the outset, you have all your documents, samples, etc. ready and thoroughly reviewed before any application is made. It is also very important to promptly respond to any queries raised by NAFDAC so as to minimize the time between compliance and approval.

Conclusion

NAFDAC is the regulatory agency responsible for the registration of imported food, drugs, cosmetic products and medical devices. The application for imported product registration is made to NAFDAC with the supporting documents and the payment of official fees. NAFDAC approves the application for the product registration upon being satisfied with the applicant’s documentations and Good Manufacturing Practice. In practice however, it is not always possible to register a product within the time frame published by NAFDAC due to a variety of factors which are mostly internal.

Please note that the contents of this Article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com or contact:

The post Practical Considerations on Registering Imported Products with National Agency for Food and Drugs Administration and Control (NAFDAC) first appeared on Goldsmiths Solicitors.

2023 was election year in Nigeria. It therefore was no surprise that we saw a lot of activities in the legal space in Nigeria, not least in the enactment of new laws, handing down of judicial decisions and the like. In our 2023 legal recap, we have highlighted some of the major legal, regulatory, and judicial changes that occurred.  This recap is divided into four parts representing four quarters of the year. In each quarter, we deal with all the major legal changes that occurred therein.

1^st Quarter (January – March 2023)

A remarkable and significant part of the first quarter was the signing into law of the Business Facilitation (Miscellaneous Provisions) Act 2023 and the Copyright Act 2023. The courts also handed down judgements on important issues surrounding which court should be the court of first instance for investments matters and the power of the Federal Inland Revenue Service (FIRS) on tax collections.

• On 20 January 2023, the Federal High Court sitting in Lagos declared in the suit between Wheatbaker Investment and Properties Limited v. EFCC and FIRS, that the Economic and Financial Crimes Commission (EFCC) lacked the statutory power to assume the power for the assessment, collection and enforcement of payment of taxes in Nigeria. The court held the appropriate agency with the power to do so is the Federal Inland Revenue Services (FIRS).
• The Supreme Court in the case between Mufutau Ajayi v. SEC and Ors., declared that the Investment and Securities Tribunal (IST) is the court of first instance for the resolution of capital market issues and not the Federal High Court.
• On 13 February 2023, former President Muhammadu Buhari assented to the Business Facilitation (Miscellaneous Provisions) Bill 2022. The Business Facilitation Bill was aimed at ensuring the ease of doing business in Nigeria.
• On 7 March 2023, the CBN issued the Operational Guidelines for Open Banking in Nigeria. It provides a framework that defines the principles for data sharing across the banking and payments system to promote innovations and broaden the range of financial products and services available to bank customers.
• The former President, Muhammadu Buhari signed the Fifth Alteration to the Nigerian Constitution, 1999 Bills into law. One of the significant changes made by this was for the financial independence of States House of Assembly and States Judiciary. Another of the bills which is the Fifth Alteration (Bill) No.33, allows states to generate, transmit and distribute electricity.
• On 17 March 2023, former President Muhammadu Buhari signed the Copyright Act 2023 which repealed the extant Copyright Act. The new Copyright Act aims to bring Nigerian copyright in tandem with 21^st century developments and protect the rights of authors among other innovative provisions.

2^nd Quarter (April – June 2023)

The second quarter saw the enactment of laws and the issuance of key financial regulations and guidelines by the Central Bank of Nigeria. Some of the laws enacted in this quarter include the Data Protection Act and the Electricity Act. The government also issued and launched national policies such as the National Dairy Policy to ensure the stability and sustainability of the sector. The courts also handed down some important judgements. Below are some of the highlights of the 2^nd quarter:

• On 5 April 2023, former President Muhammadu Buhari inaugurated the National Council for Digital Innovation and Entrepreneurship, a body established by the Startup Act 2022 and tasked with the responsibility of implementing the provisions of the Nigerian Startup Act, 2022.
• On 18 April 2023, the Federal High Court delivered judgement in Emmanuel Ekpenyong v. National Assembly & Ors which nullified sections 839, 842. 843, 844, 845, 846,847, 848 and 851 of the Companies and Allied Matters Act (CAMA) 2020 for being inconsistent with the provisions of the Constitution of Nigeria, 1999 particularly sections 36 (1), 38 and 40. The court held that the power granted to the Corporate Affairs Commission (CAC) to administer incorporated trustees under the above-mentioned sections of the CAMA infringed on the applicant’s right to freedom of thought, conscience and religion and the right to peaceful assembly.
• On 3 May 2023, the CBN issued the Guidelines for the Regulation of Representative Offices of Foreign Banks in Nigeria. The guidelines provide for the permissible and non-permissible activities of approved representative Offices of Foreign Banks in Nigeria and the licensing requirements.
• On 10 May 2023, the Federal High Court sitting in Abuja decided in the Incorporated Trustees of Media Rights Agenda v. National Broadcasting Commission (NBC), that the NBC lacked the power to impose fines on broadcast stations. The court also set aside the fines imposed on 45 broadcast stations on 1 March 2019.
• On 16 May 2023, the Federal Government launched the National Agricultural Seed Policy 2022. The policy revised the 2015 policy and it is aimed at ensuring that farmers have access to improved quality seeds among other important objectives.
• On 28 May 2023, the Federal Government announced the introduction of the Brown Card which is the legal instrument to confer permanent residency on non-Nigerians and also enabling them to live and work in Nigeria.
• On 29 May 2023, Nigeria sworn in a new president, Bola Tinubu, who on 8 June 2023 signed the Constitution of the Federal Republic of Nigeria, 1999 (Fifth Alteration) (No. 37) Bill, 2023 raising the retirement age for High Court judges from 65 years to 70 years.
• On 9 June 2023, President Bola Tinubu signed the Electricity Act 2023 into law which repealed the Electric Sector Reform Act, 2005. The Act now recognizes the power of federating states to regulate their electricity markets by issuing licenses to private investors to operate mini-grids and power plants within the states.
• On 12 June 2023, the president, Bola Tinubu signed the Student Loan Act 2023 which sets the conditions to provide financial support to indigent students in the form of interest-free loans.
• On 12 June 2023, the president, Bola Tinubu signed the Data Protection Act 2023. The Act established the Nigerian Data Protection Bureau, the regulatory authority responsible for enforcing the provisions of the Act. It also provides the legal basis for the processing of data, cross-border transfer of data, general obligations of data controllers and processors, rights of data subjects and penalties for violations among other salient provisions.
• On 14 June 2023, the CBN announced the operational changes to the foreign exchange market in Nigeria. The CBN by the announcement abolished segmentation, collapsed all segments into the Investors and Exporters (I&E) window, re-introduced the “willing buyer, willing seller” model at the I&E window. The RT200 Rebate Scheme and the Naira4Dollar Remittance Scheme were also stopped with effect from 30 June 2023.
• On 27 June 2023, the CBN issued the Guidelines on Contactless Payments in Nigeria. The guidelines provide the minimum standards and requirements for the operation of contactless payments in Nigeria and also specify the roles and responsibilities of stakeholders such as issuers, payment and card schemes, merchants, etc.

3^rd Quarter (July – September 2023)

This quarter saw a lot of policy and regulatory activities by the regulators in Nigeria. The Federal Inland Revenue Service (FIRS) directed all international shipping lines to settle their tax liabilities no later than 31 December 2023 or risk legal actions. The Nigerian Civil Aviation Authority also directed compliance with the regulations requiring mandatory valid insurance covers for airlines and allied service providers. The President, Bola Tinubu, also signed executive orders some of which changed the commencement date for some tax laws. Below are some of the highlights of the 3^rd quarter:

• The President, Bola Tinubu signed four Executive Orders. Some of the Executive Orders include the Finance Act (Effective Date Variation) Order 2023 which deferred the commencement date of the changes contained in the Finance Act 2023 from May 2023 to 1 September 2023 in line with the National Tax Policy; and the Customs, Excise Tariff (Variation) Amendment Order, 2023 which deferred the commencement date from 27 March 2023 to 1 August 2023.
• On 12 July 2023, the Federal Government disclosed its intention to amend the Cybercrime Act 2015 to address the threats posed by Artificial Intelligence and other emerging technologies.
• The Court of Appeal delivered judgement in Federal Road Safety Commission (FRSC) v. Darlington Ugo Ehikim to dismiss the appeal filed the FRSC. The Court of Appeal upheld the judgement of the Federal High Court that ruled that the FRSC can only operate on federal roads and do not have the right to operate on state and local government roads.
• On 25 July 2023, CAC announced that it shall discontinue manual submissions for winding up and dissolution, receivership, company voluntary arrangements, administration and netting with effect from 7 August 2023.
• On 31 July 2023, CAC disclosed its plan to strike off the names of 100,000 companies from its register for failure to file annual returns for a period of 10 years. Further to this disclosure, on the same day, CAC published the names of the 94,581 companies to be struck off its register.
• On 2 August 2023, the Court of Appeal in the case of Minister of Interior & Ors v. Eti-Osa Local Government & Ors, set aside the judgement of the Federal High Court which stopped the Federal Government from further registering marriages within some Local Government Councils. The Court of Appeal held that both the Federal Government and Local Government Councils have the legal authority to celebrate, contract and register marriages.
• On 11 August 2023, the Nigerian Civil Aviation Authority (NCAA) directed all airlines and allied service providers in the aviation industry to comply with the Nigerian Civil Aviation Regulations (Nig. CARs) 2022 which became effective from 10 July 2023. The regulations require airlines and allied service provides not to operate unless they have adequate and valid insurance cover.
• On 21 August 2023, the Federal Inland Revenue Service (FIRS) directed international shipping companies operating within Nigeria’s territorial waters to settle any pending tax liabilities by 31 December 2023 failing which the FIRS may commence legal actions against non-complying international shipping companies.
• On 20 September 2023, the Central Bank of Nigeria (CBN) announced that manual applications for Microfinance Bank licence would end by 31 December 2023. The CBN also unveiled a new platform for the submission of Microfinance Bank licence applications known as the CBN Licensing, Approval and Other Requests Portal (CBN LARP).

4^th Quarter (October – December 2023)

This quarter was remarkable especially as Nigeria won the case against Process and Industrial Development Limited (P&ID) at the Business and Property Court in London effectively putting an end to a long running legal case which had the potential of enforcing an $11 billion arbitration award against Nigeria. There were also important decisions handed down by the local courts. One such case is the decision of the Federal High Court which declared portions of the tax appeal rules as unconstitutional for constraining the right of appeal of a taxable person. The regulators also issued guidelines and regulations that apply to various sectors. Below are some of the highlights of the 4^th quarter:

• On 4 October 2023, the Nigerian Minister of Interior, disclosed that the Federal Government has started taking steps to review Nigerian visa on arrival and passport policies.
• On 7 October 2023, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) issued and presented the first Wholesale Gas Supply Licence pursuant to section 142 of the Petroleum Industry Act 2021 to Ohuru Trading Limited.
• The Nigerian Communications Commission (NCC) issued the Conditions for Offering Closed user group (CUG) Services in the Nigerian Telecom Industry to regulate the provision of CUG services in Nigeria. The conditions were scheduled to come into operation on 1 November 2023 and would remain valid until reviewed by NCC.
• On 10 October 2023, the National Health Insurance Authority (NHIA) launched the National Health Insurance Act Operational Guidelines 2023 which clarifies the roles, responsibilities and obligations of various stakeholders and facilitates the implementation of health insurance in Nigeria.
• On 23 October 2023, Nigeria won the long running dispute in the Business and Property Court in London in the suit against Process & Industrial Developments Limited (P&ID) in a judgement delivered by Justice Robert Knowles. The court also stopped the enforcement of the $11 billion arbitration award by P&ID on the ground that the process that led to the award of the contract to P&ID was manifestly fraudulent.
• On 1 November 2023, Enugu state government stated that courier operators in the state must obtain the requisite licence to operate no later than 1 December 2023. The directive would see courier operators keep and maintain pickups and delivery records and see their riders abide with strict regulations.
• On 2 November 2023, CAC issued the Public Notice on the Full Application of Penalties for Failure to File Annual Returns by Companies and Recovery of Penalties Against Company Directors and Officers. By the public notice, CAC advised companies to file their annual returns as CAC shall commence the enforcement of the strict penalties prescribed by the Company Regulations 2021 by 1 January 2024.
• On 9 November 2023, in the case of Joseph Bodunrin Daudu SAN v. Minister of Finance, Budget and National Planning & 2 Ors, the Federal High Court nullified certain sections of the Tax Appeal Tribunal (Procedure) Rules 2021, the Federal High Court of Nigeria (Federal Inland Revenue Service) Practice Directions 2021, and the Federal High Court of Nigeria (Tax Appeals) Rules 2022 which require the payment of fifty percent of disputed assessed tax before appeal as unconstitutional by constraining the constitutional guaranteed right of appeal.
• On 14 November 2023, in the case of Maritime Workers Union of Nigeria v. Incorporated Trustees of Freight Forwarders Transport Association & Ors, the National Industrial Court of Nigeria sitting in Port Harcourt, Rivers State declared that the Corporate Affairs Commission does not have the power to register trade unions.
• On 5 December 2023, CAC announced that it shall begin the implementation of the N100,000 million minimum paid-up capital for the incorporation of companies with foreign participation in Nigeria. It also directed existing companies with foreign participation with less than N100,000 million minimum paid-up capital to increase it to meet the threshold within 6 months beginning from 5 December 2023 failing which they shall be met with compulsory winding up proceedings at the instance of CAC. The CAC subsequently noted that reference should have been to “issued capital” and not “paid-up capital” and stated that it shall issue an amended notice to reflect minimum issued capital.

Conclusion

2023 has been an interesting year in the Nigerian legal and regulatory landscape. The regulators were actively issuing important rules and regulations to address and provide guidance on financial, corporate, tax, insurance matters, etc. New laws such as the Electricity Act, Data Protection Act and Copyright Act were also enacted. The courts handed down important decisions which put a finality to some of the assumed powers of certain government agencies such as the FIRS and CAC. Importantly, Nigeria won the case against Process and Industrial Developments Limited (P&ID) for the enforcement of the $11 billion arbitration award in London in what was described as a manifestly corrupt contract.

We use this opportunity to wish all our clients a very Merry Christmas and best wishes for the New Year 2024. Thank you all for your support.

Please note that the contents of this Article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

The post Goldsmiths Solicitors – Legal Recap for the Year 2023 first appeared on Goldsmiths Solicitors.

The most recent attempt prior to this Act, was the Fifth Alteration (No. 33) Bill 2022 (The Electricity Constitutional Amendment), which was signed in the last days of the previous administration and altered the Constitution of the Federal Republic of Nigeria to empower states to enact laws with respect to the generation, transmission, and distribution of electricity in areas covered by the national grid system within their state.

Overview

The Electricity Act 2023 repeals the Electric Sector Reform Act, 2005. The primary objective of the Act is  to provide a comprehensive legal and institutional framework to guide the operation of a privatized, contract and rule-based competitive electricity market in Nigeria, and to attract private sector investments in the entire power value chain of the Nigerian Electricity Supply Industry (NESI).

Applicability of the Act: The Act applies throughout the country with respect to all aspects and segments of the power sector value chain in Nigeria, but nothing in the Act invalidates any law passed by the House of Assembly of any state with respect to all aspects of generation, transmission, system operation, distribution, supply, and retail of electricity within the state. What this means is that states still have the liberty to enact laws through their state Houses of Assembly to regulate state electricity market, create power stations for generation of electricity for supply, transmission and distribution to rural unserved and underserved areas.

Creation of Integrated National Electricity Policy and Strategic Implementation Plan: To further guide the overall development of the electric power sector in Nigeria for optimal utilization of resources like coal, natural gas, nuclear substance, and materials, as well as renewable energy sources for the generation, transmission and distribution of electricity, the Act mandates the Federal Government to create an Integrated National Electricity Policy and Strategic Implementation Plan. This new strategic policy implementation plan is to be initiated through the ministry in charge of power, within one year of the commencement of the Act upon approval of the Federal Executive Council (FEC) and may be reviewed periodically but not later than every five years.

Validity of the pre-privatization and post-privatization of the Nigerian Electricity Supply Industry (NESI): The Act recognizes the validity of the pre-privatization and post-privatization of the Nigerian Electricity Supply Industry (NESI) which resulted in the unbundling of the defunct National Electric Power Authority (NEPA), into 18 distinct Power generation, transmission, and distribution companies, which emerged from the Power Holding Company of Nigeria (PHCN) which was the initial holding company. The Act also provides for the regulation and supervision of competition in the substantially privatized electricity market, by ensuring that the federal minister in charge of power exercise supervisory powers and functions.

Creation of the Nigerian Electricity Regulatory Commission (NERC): The Act creates the Nigerian Electricity Regulatory Commission (NERC) as the apex regulator of the NESI. It empowers NERC to among other things, license and regulate persons engaged in the generation, transmission, system operation, distribution, supply and trading of electricity, create market rules and grid codes, safety, security, reliability and quality standards, establish consumer rights and obligations regarding the provision of electricity services, monitor the general operation of the electricity markets, and place sanctions as necessary in deserving circumstances. Any grievance with the decisions or actions of the NERC by any person with respect to the cancellation of a licence, refusal to issue or renew a licence, etc.  is subject to a review first by NERC upon an application made to it and it may give a final decision rescinding or varying its earlier decision. Any further grievance with the final decision given by NERC pursuant to its review is subject to an appeal at the Federal High Court. The Act further states that a person shall not institute and maintain a suit against NERC without first initiating and exhausting the internal dispute resolution with NERC.

Compulsory installation of meters for distribution of electricity to consumers. The Act makes it mandatory for electricity distribution licensees to install meters for distribution of electricity to consumers. There is also a corresponding mandatory obligation on all consumers of electricity to allow the installation of meters in their premises and pay bills chargeable to the electricity distribution licensees. The Act provides that where a consumer fails to pay bills, the electricity distribution licensee may cut off the consumer’s connection to power after giving notice in the manner prescribed by the NERC.

Establishment of the Power Consumer Assistance Fund: The Act establishes a Power Consumer Assistance Fund (PCAF), which shall be used to subsidize electricity supply to underprivileged power consumers. This category of underprivilege power consumers shall be determined by the Minister in charge of power in consultation with the NERC.

Creation of the Rural Electrification Agency: The Act creates the Rural Electrification Agency with the objectives of coordinating corporate bodies, private investors using renewable energy sources for rural electrification in the rural, unserved, underserved areas, thereby promoting universal access to affordable and sustainable electricity, and improving the quality of life and economic opportunities of rural, unserved, and underserved communities in Nigeria.

Key Highlights

• The Electricity Act, 2023 repeals the Electric Power Sector Reform Act, 2005, the Nigerian Electricity Management Services Agency Act, 2015, the Hydroelectric Power Producing Areas Development Commission (Establishment Act, Etc.) and its various amendment Acts
• Under the Act, the Federal Government shall support the development and utilization of renewable energy sources for the generation, transmission, system operation and distribution of electricity.
• The Transmission Company of Nigeria (TCN) is obliged to incorporate a company to be known as Independent System Operator (ISO) upon a written directive of NERC which is to be licensed by NERC to carry out the market and system operation functions such as generation scheduling, commitment and dispatch, transmission congestion management, administration of wholesale electricity market, etc. which were hitherto being exercised by TCN.
• A licence is required for electricity generation (excluding captive generation), transmission, distribution, supply trading and system operation.
• The construction, ownership and operation of an undertaking for generating electricity not exceeding 1 megawatt (MW) or an undertaking for distribution for electricity with a capacity not exceeding 100 kilowatts (KW) does not require a licence.
• The Act encourages private sector investments in the generation, transmission, distribution, and supply of electricity from renewable sources such as solar, wind or water.
• The Act provides for the introduction of tax incentives as are necessary to incentivize, promote and facilitate the generation and consumption of electric power from renewable energy sources.
• The Act recognizes the power of federating states to regulate their electricity markets by issuing licenses to private investors to operate mini-grids and power plants within the state. Interstate and international electricity delivery from such mini grids is however prohibited to state as it is within the remit of the Federal Government.
• The NERC maintains its status as the apex regulator of electricity sector in Nigeria, and until the federating states pass their own electricity laws, the NERC shall continue to regulate electricity business and markets within the federating states.
• The Act creates a Power Consumer Assistance Fund (PCAF), which shall be used to subsidize electricity supply to underprivileged power consumers.
• The Act creates the Rural Electrification Agency with the objectives of coordinating the use of renewable energy sources for rural electrification and promoting universal access to affordable and sustainable electricity, which improve the quality of life and economic opportunities.
• The Act creates offences and imposes penalties. Offences such as theft of electricity, theft of electric lines and materials, receiving stolen electricity, interference with meters or works of licensees, negligently breaking or damaging, intentionally disrupting power supply, damage to public street lightings, obstruction and impersonation, general contravention of orders and regulations and their penalties are specifically provided for under the Act.

Conclusion

The deficiency in power transmission in Nigeria has been attributed to inadequate power transmission infrastructure. The decentralization of power generation and distribution under the Electricity Act 2023, which gives states the power to develop legislations to create local markets for generation and transmission of power to all areas within their boundaries is anticipated to enhance affordable and sustainable electric power to all areas. Indeed, with the introduction of a parallel electricity market in the states, customers within the states can decide to remain connected to the national grid or opt for a mini-grid operator licensed by the state within which they reside in. The shift from fossil-based systems of energy production and consumption to renewable energy sources will create a market for renewable energy and stimulate private sector investments.

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

The post What the Electricity Act 2023 Means for the Electricity Market and Stakeholders in Nigeria. first appeared on Goldsmiths Solicitors.

This article provides an overview of the new law, it considers the objectives, application, principles guiding the processing of personal data, cross-border transfer of personal data and other key provisions.

Application of the Nigeria Data Protection Act

The Act applies to data controllers or data processors domiciled, resident or operating in Nigeria and the processing of personal data that occurs within Nigeria. It also applies to situations where the data controllers or data processors are not domiciled, resident or operating in Nigeria but are processing the personal data of data subjects in Nigeria.

The Act does not apply to the processing of personal data which is done solely for personal or household purposes by one or two more persons. The Act also does not apply to the processing of personal data necessary for the investigation, detection or prosecution of crimes or the prevention or control of a public health emergency, etc.

Objectives of the Act

The Act seeks to achieve the following objectives:

1. Safeguard the fundamental rights, freedoms and interest of data subjects as guaranteed under the Constitution.
2. Regulate the processing of personal data and ensures that personal data is processed in a fair, lawful and accountable manner.
3. Protect data subjects’ rights and provide means of recourse and remedies in the event of breach.
4. Ensure that data controllers and data processors fulfill their obligations to data subjects.
5. Establish an impartial, independent and effective regulatory Commission to superintend over data protection and privacy issues and supervise data controllers and data processors.

Establishment and Functions of the Nigeria Data Protection Commission

The Act established the Nigeria Data Protection Commission (“the Commission”) for the purposes of achieving the objectives of the Act. Thus, the Commission has the core functions of regulating the deployment of technological and organizational measures to enhance personal data protection, accredit, licence, and register suitable persons to provide data protection compliance services, register data controllers and data processors, receiving complaints relating to violations of the Act or any subsidiary legislations.

Principles of Processing Personal Data

Data controllers and data processors process personal data on the basis of care and accountability to data subjects. Accordingly, data controllers and data processors must act in a fair, lawful and transparent manner, collect data only for specified and legitimate purpose, hold and retain the data accurately, not longer than necessary, and generally ensure appropriate security measures are taken to secure the personal data.

Consent and Lawful Basis for the Processing of Personal Data

Consent of a data subject is very important for processing personal data. A data subject is a person whose information or data is being processed or sought to be processed. A data controller or data processor must obtain the consent of a data subject before processing his/her data, and it lies on the data controller or processor to prove that the data subject has given consent. The request for consent must be in a clear simple language and format with information that the data subject reserves the right to withdraw the consent at any time.  The consent must be freely and intentionally given either in writing, orally or through electronic means. Silence or inactivity does not amount to consent. In the case of a child, or person lacking legal capacity), the consent of a parent or guardian will suffice. The need to obtain consent of parent or guardian, may however not apply where the processing of personal data is necessary to protect the vital interests, or for the purpose of the education, medical or social care of such child or person lacking legal capacity, or where it is necessary for proceedings before a court.

The consent must be given for the specific purpose(s) for which personal data is processed, or where the processing is necessary for the following purposes:

1. For the performance of a contract to which the data subject is a party
2. For compliance with a legal obligation to which the data controller or data processor is subject
3. To protect the vital interest of the data subject or another person
4. For the performance of a task carried out in the public interest or in the exercise of official authority vested in the data controller or data processor
5. For the purposes of the legitimate interest pursued by the data controller or data processor, or by a third party to whom the data is disclosed.

Obligations of a Data Controller

• Obligation to Provide Information: A data controller has the obligation to provide certain necessary information to a data subject before collecting his personal data. The information which the data controller must provide to the data subject include the following:

1. Identity, residence or place of business and means of communication with the data controller and its representative.
2. Recipients or categories of recipients of the personal data
3. Existence of the rights of the data subject
4. Retention period for the personal data, etc.

The data controller shall make this information available by means of a privacy policy which should be expressed in a clear, concise, transparent, intelligible and easily accessible format.

• Data Privacy Impact Assessment Obligation: The assessment is a process designed to identify the risks and impact of processing personal data. A data controller is required to conduct a data privacy impact assessment where the processing of personal data may result in high risk to the rights and freedom of a data subject. This is to be conducted before the processing of personal data.
• Obligation to Erase Personal Data: A data controller has the obligation to erase the personal data of a data subject without undue delay where it is no longer necessary or where the data controller has no other lawful basis to retain the personal data.

Obligations of a Data Processor

Data controllers are engaged by data processors to process personal data. These data processors are also mandated to comply with the principles for the processing of personal data, assist the data controller to fulfill its obligation, implement appropriate technical and organizational measures to ensure the security, integrity, and confidentiality of personal data. Where a data processor engaged by a data controller further engages another data processor, the data processor directly engaged by the data controller is obliged to notify the data controller of its engagement with another data processor.

Data Protection Officers

Data controllers that process significant personal data are required to designate a person as a Data Protection Officer (DPO). The DPO may be an employee of the data controller or a person engaged by a service contract and must possess expert knowledge on data protection laws and practices. A DPO advises data controller, monitors compliance with the Act and related data protection policies of the data controller. The DPO also act as the contact point for the Commission on data processing issues.

Rights of Data Subjects

A data subject has the following rights with respect to the processing of his personal data by a data controller.

1. Right to Confirmation from a Data Controller. A data subject has the right to obtain from a data controller without constraint or unreasonable delay, confirmation as to whether the data controller or a data processor operating on its behalf is storing or otherwise processing personal data relating to the data subject and if so, the purpose of the processing, the recipients or categories of recipients to whom the personal data have been disclosed or will be disclosed, etc.
2. Right to receive a copy of his personal data in a commonly used electronic format.
3. Right to correction or deletion of the data subject’s personal data where correction is not possible where the personal data is inaccurate, out of date, incomplete or misleading.
4. Erasure of personal data of the data subject without undue delay
5. Right to restrict the processing of personal data
6. Right to withdraw consent to the processing of personal data at any time.
7. Right to object to the processing of personal data relating to the data subject.
8. The right to reject being subject to a decision based solely on automated processing of personal data.
9. The right to receive personal data in a structured, commonly used and machine-readable format and be able to transmit it to another data controller without any hindrance.

Data Security

Data controllers and data processors are required to implement appropriate technical and organisational measures to ensure the security, integrity and confidentiality of personal data in the possession. They must ensure that personal data are protected against accidental or unlawful destruction, loss, misuse, alteration, unauthorized disclosure or access.

The security measures that may be implemented to ensure personal data security include encryption, periodic assessments of risks to processing systems and services, regular testing, assessing and evaluation of the effectiveness of the measures, regular updating of the measures and introducing new measures to address shortcomings, etc.

Personal Data Breaches

Personal data breach is the breach of the security of a data controller or data processor which leads to or may lead to the accidental or unlawful destruction, loss, alteration, unauthorised disclosure of, or access to personal data transmitted, stored or processed.

Data processors are required to notify data controllers or engaging data processors of personal data breaches which the data processors store or process upon becoming aware of it by describing the nature of the personal data breach and the number of data subjects and personal data records concerned and also respond to all information requests from the data controllers or the engaging data processors.

Data controllers should also notify the Commission of personal data breaches which are likely to result in a risk to the rights and freedoms of individuals within 72 hours of becoming aware of such breach. Data controllers are also to communicate the personal data breach to the data subjects in a plain and clear language including measures that could be taken by the data subjects to mitigate any possible adverse effects.

Data controllers and data processors are also required to keep a record of all personal data breaches, facts relating to the breaches, its effects and remedial actions taken.

Cross-border Transfers of Personal Data

Data controllers and data processors are not allowed to transfer or permit the transfer of personal data from Nigeria to another country unless:

1. The recipient is subject to a law, binding corporate rules, contractual clauses, code of conduct or certification mechanism that affords an adequate level of protection.
2. meets one of the lawful basis for transfer of personal data outside Nigeria.

The level of protection considered adequate must uphold the principles that are substantially similar to the conditions for processing personal data provided by the Act. An adequate level of protection is assessed by taking into account the existence of an effective data protection law, access of public authority to personal data, existence of an independent supervisory authority, etc.

Registration of Data Controllers and Data Processors

Data controllers and data processors of major importance are mandated to register with the Commission within six months after the commencement of the Act or upon becoming a data controller or data processor of major importance. Data controllers or data processors of major importance are data controllers or data processors that process personal data of particular value or significance to the economy, society or security and are resident or operating in Nigeria.

The Commission is required to maintain and publish a register of duly registered data controllers and data processors of major importance on its website. A data controller or data processor of major importance shall be removed from the register where it ceases operation.

Enforcement and Penalties

A data subject who is aggrieved by the action, inaction or decision of a data controller or processor may lodge a complaint with the Commission and it may investigate the complaint where it is not vexatious or frivolous.

The Commission may also issue a compliance order once it is satisfied that any requirement of the Act or subsidiary legislation has been violated or likely to be violated by a data controller or data processor. The order may be a warning, order to comply with the request of a data subject or a cease-and-desist order. The Commission may also issue an enforcement order or impose a sanction for violation of the Act or a subsidiary legislation.

The penalty or remedial fee for violation of the Act or subsidiary legislation is:

1. Higher maximum amount, which is the greater of N10,000,000 and 2% of its annual gross revenue in the preceding financial year, in the case of a data controller or data processor of major importance.
2. Standard maximum amount, which is the greater of N2,000,000 and 2% of its annual gross revenue in the preceding financial year, in the case of a data controller or data processor not of major importance.

Conclusion and Remarks

The Nigeria Data Protection Act, 2023 is an important piece of legislation and has been long in coming. It provides for the basic principles and the lawful bases for the processing and transfer of personal data in Nigeria and applies to both resident and non-resident data processors. It provides for the responsibilities of data controllers and data processors while also providing for the rights of data subjects. The processing of sensitive personal data and the personal data of children and persons lacking legal capacity to consent must follow the applicable principles as provided by the Act. Data security measures which are robust are expected to be put in place by data controllers and data processors to protect against the risk of personal data breaches. The Act creates the Nigerian Data Protection Commission which has the overall responsibility to ensure compliance and impose penalties where necessary. Both resident and non-resident data processors are advised to pay particular attention to this new legislation as they are now required to take specific steps to ensure compliance with the Act.

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

The post Better Late than Never: Nigeria Finally Passes the Data Protection Act first appeared on Goldsmiths Solicitors.

A Trademark is a unique sign or mark that distinguishes the goods and services of one business from another. A mark can either be a device, brand, heading, label, ticket, name, signature, word, letter, numeral, or any combination thereof. Most businesses, companies or organizations have distinctive marks that sets them apart from other businesses.

The relevant law that governs Trademark in Nigeria is the Trademarks Act, Laws of the Federation of Nigeria 2004 (LFN 2004). This article explains the procedure for the registration of trademarks, enforcement, and remedies for the infringement of trademarks in Nigeria.

Requirements for Registration of Trademark:

1. Applicant’s details (i.e., name, signature, nationality, and address).
2. Details of the trademark.
3. A representation of the mark.
4. The classification of goods and/or services (Nigeria uses the Nice Classification of Goods and Services).
5. A signed Power of Attorney

Procedures for Registering a Trademark:

1. Availability search: The first step is to conduct an availability search at the Trademark Registry to ensure that there are no marks similar or in conflict with the proposed mark.
2. Application: If there are no conflicts, an application for trademark registration is filed at the Trademark Registry. After submission of the application form and payment of the necessary fees, the Registrar issues an Acknowledgement Letter confirming receipt of the application.
3. Acceptance: Where the application is approved on the grounds that the mark is distinctive, a Letter of Acceptance will be issued within one to three months by the Registrar of Trademarks.
4. Publication and Certification: Upon the acceptance of the application, the Registrar ensures the notice of the application is published in the Nigerian Trademark Journal. The purpose of this publication is to notify interested parties who may have objections to the application. The opposition period is two months from the date of publication. Where there are no objections or where an objection raised has been upheld, the Applicant may proceed to make an application for the issuance of Certificate of Registration and subsequently, a Certificate of Registration would be issued by the Registrar of Trademarks.

A trademark once registered is valid in Nigeria for an initial period of 7 years in the first instance and subsequent renewals are valid for 14 years.

Trademark Infringement

A trademark is infringed when a person without consent from the trademark owner uses the mark or an identical mark in a way that is likely to deceive the public or cause confusion. Where such rights are infringed upon, the proprietor can institute an action in court for the infringement of such trademark. The court with jurisdiction for trademark proceeding in Nigeria is the Federal High Court. The burden of proof lies on the Proprietor of the trademark to show that his right has been infringed upon. Section 5 (2) Trademarks Act provides that:

“without prejudice to the generality of the right to the use of a trade mark given by such registration as aforesaid, that right shall be deemed to be infringed by any person who, not being the proprietor of the trade mark or a registered user thereof using it by way of the permitted use, uses a mark identical with it or so nearly resembling it as to be likely to deceive or cause confusion, in the course of trade, in relation to any goods in respect of which it is registered.”

The owner of an unregistered trademark on the other hand may institute an action for passing off where there is an infringement.

Enforcement of Rights and Available Remedies.

The owner of a registered trademark can enforce his rights through the any of the following options:

1. Filing an opposition within 60 days of the publication in the Trademark journal against the registration of an identical or similar trademark. This is done by filing a Notice of Opposition, the Respondent is required to file a counter statement and the matter will be determined by the Registrar as to whether registration of the mark will be entertained or not. The notice must be in writing and must contain the grounds for the opposition.
2. Making a formal application to the Trademark Registrar for the cancellation of the trademark. This however should be supported with evidence of prior registration of the mark by the proprietor.
3. Sending a cease and desist letter to the infringer to inform him of the trademark that is being infringed and warning him to stop further violations of the mark. Where such infringer refuses, a legal action can be instituted.
4. Apply for a search and seize order where the infringement is known to the proprietor of the Trademark. It allows the owner the opportunity to enter the premises of the infringer without notice to seize all infringing goods.

Where the owner of a trademark commences legal action for the enforcement of his exclusive right to a trademark, the following remedies may be available through the courts:

1. The owner of the trademark can seek damages for compensation for losses suffered in relation to infringement of the trademark especially when such infringement impacts negatively on the owner’s business. The evidence must show a direct causal relationship between the infringement and actual harm.
2. Injunctive reliefs may be sought and granted. The court could prevent the infringer from further using the mark or may restrict usage of the mark to certain areas or impose certain conditions for its usage.
3. An Anton Pillar order can be sought to give access to the owner to enter the premises where the infringed goods are kept and take possession of it.
4. The court can also grant an order of account of profit to recover all the profits made by the infringer from the unauthorized use of the Trademark where such act amounts to gross loss of profit on the part of the owner.

Conclusion

The benefits of trademark registration generally and in Nigeria cannot be overemphasized. The certificate of trademark registration issued by the Registrar, is irrefutable evidence of registration of a mark and confers a right on the owner to use the trademark to the exclusion of others. Not only is a registered trademark protected under the law, but it also protects the identity and goodwill of the brand. The owner of a registered trademark can equally assign or transfer his trademark to an individual or corporate entity and generate revenue from it. Any infringement of the registered trademark could be met by an enforcement action and the registered trademark owner could get injunctive order or damages against the infringer.

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

The post Trademarks in Nigeria: Registration, Infringement and Enforcement first appeared on Goldsmiths Solicitors.