Author Archive

1. Can we meet you?

My name is Damilare Disu, I completed my law degree late last year from the Obafemi Awolowo University, and I am presently awaiting admission into the Nigerian Law School. I am currently an intern with the Legal Policy & Research Unit (Projects Team) of the International Bar Association’s London office.

2. What motivates you to give your best shot at everything you do?

Occasionally, you know what your drive is, but when it is put to you in the form of a question, you have to think about it all over again, and personally, I think it is because I see the world as my oyster. I have always wanted to excel beyond the average, not that I compete with anybody, but I want to be the best I can, so I majorly put in the best because I know the amount of effort my parents have invested, and I do not want to disappoint them.

3. Going by your LinkedIn profile, you participated in many extracurricular activities as an undergraduate, including securing internships in top tier law firms and winning essay competitions. How were you able to balance these activities with your academics?

It is a matter of priority and time management. While at the University, I typically did not take up competitions when they were very close to exams. So most of my competitive engagements were very early in the semester when the academic rigour was not that overwhelming, so I generally planned my time and participated in competitions I was interested in during the first few weeks of resumption. I do not participate in every competition that comes my way; I determine the competitions that align most with my future ambitions and then decide to participate in them. As a rule of thumb, I balance the most by ensuring I participate in competitions early in the semester so that it does not conflict with my academic obligations.

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4. How exactly did you get a placement as a legal intern at the International Bar Association (IBA)?

I want to say that the process is straightforward. I heard of the opportunity through Linkedin and a friend who urged me to apply. The process is a four-stage process. Generally, you apply; the application consists of your CV, a cover letter, a copy of your writing work, and any legal writing you have done. Also, you have to submit a reference letter, so you have to meet one of your academic tutors to write you a reference sent to the IBA office in London. Finally, you fill out an application form, and if, of course, you cannot fund your stay in London, you can also apply for the IBA educational trust fund scholarship. That scholarship aims to give you some financial assistance while you are in London, but there is a maximum of 2000 pounds. After the first application, they usually review and shortlist applicants. During my time, we were shortlisted for about 20 candidates. There was another round of review, and this review is to know if you are qualified for the final stage. Only four candidates were chosen from the finalists in the final stage, of which I was part. . This process took about three months. I applied in August, and I received my offer from IBA in November.

5. Will you say that the experience you gathered beforehand contributed to your placement at the International Bar Association?

I am grateful for all the previous experiences I had, especially with several Nigerian law firms and many extracurriculars I have also had to participate in actively. The primary reason is that during various interviews, for instance, it is not uncommon for you to be asked competency-based questions, and during those questions, you find yourself having to make recourse to your past experiences to show them you have demonstrated these skills before and you can also demonstrate it if you are given an opportunity. My previous experiences, internships with Nigerian law firms and various extracurricular activities gave me some leverage during the application process.

6. What is your advice to undergraduates who believe that academic excellence is enough to get one’s dream job?

It is never enough, especially in this generation where there is some grade inflation. I am not saying people should not get the grade they deserve but what I am saying, in essence, is that more people make top grades nowadays, and so it does not give you this different edge it naturally gave you 20 years ago. For instance, we can have like 20 first-class candidates; second class upper could be as many as 100; while these grades are glowing, it does not necessarily give you that edge. About 15 years ago, maybe 1 or 2 persons made a first-class, unlike now, so when you furnish your certificates, people think you are exceptional, and there is this presumption in your favour, but with the way, there are so many top grades, then you have to have something extra. It could be something extracurricular, it could be by writing your thoughts on any legal matter, it could be by taking opportunities and many of those, but let me mention as well that the fact that you want to balance these skills does not mean that you are to jeopardize your academics because I have friends who are just not able to balance these things. After all, they prefer to focus on their academics. So, if you think that is the kind of identity you have, you could focus on your studies while in school, then during the gap year before you proceed to law school, you could engage in some of these extracurricular activities to build your profile. I am not saying the other extracurricular activities do not matter; I am just saying that you need to strike a balance because you go through a university, for instance. You focus extensively on extracurricular activities and then lose the chance of making probably a second class upper degree; you will never get that chance again. However, if, for instance, you obtain a good grade and then if there are still some improvements you need to make on your extracurriculars, there is a chance to do that maybe before law school, maybe during NYSC.

7. How was your social life like at the University?

I am not precisely social in the way which you might intend. However, I had a few friends whose company I thoroughly enjoyed. I was not as social as I wanted, and my social life will be rated 5/10.

8. In terms of parental support, what is your story?

When you asked me a question earlier about what drove me, I did mention that I did not want to disappoint my parents, so while I was a kid, I did not naturally emerge from a very wealthy background. We were not poor in the sense of it, but it was this typical modest Nigerian background, and then you see your parents struggling so much to finance your education and all of those, and my parents gave me incredible support both in my academics and whatever is required or that I wanted to engage in. So, in that sense, I think I had parental support for everything I wanted to do. If I want to do an internship, for instance, and I need financial help, I know my parents will show up. I think that parental influence will determine how often you accomplish your goal. I say this because I think I have been lucky to have parental support, and it is one of the things that majorly motivates me.

9. What is your advice to undergraduate law students who want your kind of success story?

I cannot call myself a success story by any standard, but of course, I understand your question. Maybe you want to take an international internship. My advice to undergraduatelaw students is what I have always told some of my colleagues, just be yourself. Also, if there is anything you like or develop an interest in, always strive for it. For instance, while I was applying for the IBA, many people who had taken the internship had one form of a postgraduate degree or the other. Most of them had high qualifications in their academics, so if I had taken that information and told myself that they do not look for people like me because I probably do not have the credentials like a postgraduate degree, I do not think I would take this risk, I would probably not have gotten the opportunity. So, the advice I will give is to take risks, and if there is something you have an interest in, regardless of what anyone tells you or any obstacles, always go for it.

1. Can we meet you?

My name is Temiloluwa Oladele and I generally go by Temi.

2. What do you do? 

Primarily, I do tax consulting and outside of that, I advise on data protection and intellectual property.

3. How did it feel moving from a full-service law firm and traditional law practice to one of the big fours? 

I always knew I was going to leave law practice, at least the traditional law practice in a law firm. Sometimes, your plans go how you want and sometimes they not. My plan was always to practice in a law firm for about three years and then decide where I want to go next. While I was working in the traditional law firm setting, I was already positioning myself towards working in consulting, in-house and the tech environment. So, moving from a traditional law firm setting to a tax consulting firm was not strange or difficult for me because I already positioned myself while working in the traditional law setting. I was doing legal tax advisory and tax representation in courts and at the Tax Appeal Tribunal. It was more like moving into a specialized field in what I was already doing. A more focused experience. 

4. Will you say that your law degree played a major role in your present career choice?

Yes. My first exposure to tax was when I was studying law. I joined The Tax Club at the University of Lagos. Basically, about 70% of tax is law. It is really about what the law says and provides. The lower percentage is accounting for tax but the crux of what a tax consultant does is answering “what does the law say? How do we take advantage of what the law says? How do we comply with the provisions of law on tax? So, having a law degree makes it easier for you to be a tax consultant. Your understanding of it is clearer and broader because you understand the principles of law. My law degree is still playing and will continue to play a big role in my career.

5. Data protection is a remotely new area in law and has not really been explored. So, can you briefly tell us what it entails?

Data protection is relatively new but has always been part of our environment. It is just the formalization that is new in Nigeria. In 2019, the Nigerian Data Protection Regulation was published, and it is the codification of the principles of data protection. Essentially, when you have identifiable data/information about somebody, that person should be able to control the information you have about him and before you are given the information, you should at least let him know what you are going to use his information for. Simply, there should be rules guiding how other people can use identifiable information about a person.  Information can be anything and it is important that you are able to control who has access to your information and what they do with it.

6. If you could go back in time as an undergraduate law student, what would you do differently?

I would do more extracurricular activities. Exposure outside of the classroom is really what makes you exceptional, in my opinion. Anyone can get grades but what really distinguishes you in today’s world is what you do outside the classroom, the people you speak to, the people you meet, the kind of activities you engage yourself in. It is what really distinguishes you. I did a bit of those, but I wish I did more. So many law students do not understand the current market for law students. When I was in the university studying law, I was not quite exposed to the possibilities in law. Although I heard people say that you can do a lot of things as a lawyer, I did not understand really what those options were. I would say 80% of us just wanted to graduate with good grades and work in a law firm. That was the dream but there is so much asides that. So, I wish I better explored the possibilities outside academics at the time. 

7. How possible is it for a law student or a young lawyer to balance academics and career with social life?

In my opinion, it is perfectly easy. I am not really a fan of very tedious settings so regardless of how daunting work is, I always find time to have fun. It has never been difficult for me. When I was working with a law firm, pre-COVID, I worked till 11pm on most days but despite that, I still had a social life. It depends on you as a person. In today’s world, it is quite essential for you to have a social life because many of the grounds you break as a person, in terms of achievements, do not always come from the formal setting. People are more relaxed in social settings and so they can give you opportunities you never realized you could have. I play football and some people I have met while playing football are people who were so high up in industries like telecommunications, tax, law practice, etc. I do not see social life as extra, I see it as part of a person’s life. 

8. Asides from pursuing a career in core law practice, what other opportunities do law students have?

I think the question should be “what opportunities do they not have?” because it is so wide and I don’t even think I can possibly cover enough of the opportunities you have as a law student, but I would say outside of the traditional law practice, that is, working in a law firm, you can work in consulting and consulting alone is so big. There is management consulting, tax consulting, audit, financial advisory, etc. There is investment banking and its related fields. There are legal services for any industry, in the medical line, in tech – and well tech is very wide. There is Fintech, physical engineering, software developments, hardware developments, etc. and for everywhere you turn, there is always a need for lawyers. Every society needs law and lawyers are needed to advise on the law. For example, if we are looking at software development, every day, someone somewhere is coding or developing a new app or website and that person needs to protect what they code, the business aspect of what they do, they need to approach people to invest in their business if they want to go big, they need to hire people to work for them and all these things are governed by law. In any aspect of life, lawyers are needed so opportunities are limitless. As a lawyer, you learn on the job. Sometimes, you may need to take some professional courses in other areas. Law gives you the confidence and the broadened mind on how to approach issues and solve problems. As a lawyer, you can do almost anything. Well, except maybe perform a surgery. 

9. What is your advice to undergraduate law students?

Shoot for things and opportunities. The first thing you should know is that you can do anything. This is not some head-in-the-clouds motivational speaking. I say this based on what I have seen. Believe in yourself. Believe that you can do it because if you don’t believe, you will not be able to convey that confidence to other people. If you believe you can do something, you will do it. Don’t close your mind to anything. While you are in school, take up internships, do a lot of things outside the classroom, meet people, volunteer. You should get good grades because it gives you an advantage but do things outside the classroom because they broaden your mind and distinguish you. Learn soft skills.

The team members are

Oluwadamilola Fadeyibi, Vice President of Conveners and Legal Personality Committee.

Oluwatomisin Shonibare
President, Conveners and Legal Personality Committee.

African Continental Free Trade Area (AfCFTA) is a flagship project of Agenda 2063 of the Africa Union- Africa’s own development vision. It was approved by the 18th ordinary Session of Assembly of Heads of State and Government, held in Addis Ababa, Ethiopia in January 2012. At this session, the decision to establish a Continental Free Trade Area was reached and adopted. The immediate and successful implementation of this decision, would impact socio-economic development, and enhance the confidence and the commitment of Africans as well as the owners and drivers of Agenda 2063.^[1] The aspirations of Agenda 2063 for a continental market with the free movement of persons, capital, goods and services, are crucial for deepening economic integration, socio-economic development, gender equality and more broadly, enhanced competitiveness and industrial development among African nations.[2] Achieving the stated aim of the AfCFTA in record time, ‘to create one African market’ will however, require the elimination of identified trade barriers.

The term, “trade barriers” may, at first glance, appear to present a negative meaning. However, this is not entirely the case as these trade barriers have their own economic significance. Trade barriers are rules and regulations, tariffs, embargos, import quotas etc, which are imposed by a particular government in its trading activities with other countries. There are four types of trade barriers namely: Tariffs, Non- Tariffs, Import quotas and voluntary export restraints.^[3] This article primarily focuses on Non-Tariff Barriers (NTBs) and their influence on the Free Trade Area in Africa.

The AfCFTA Protocol on Trade in Goods defines NTBs as “barriers that impede trade through mechanisms other than the imposition of tariffs”. NTBs are restrictive regulations and procedures, other than tariffs, that add to the difficulty and cost of importing or exporting products. NTBs can range from procedural delays at borders to highly technical product safety requirements.^[4] NTBs can arise from official measures in the form of laws, regulations, policies, restrictions, labelling requirements, private sector business practices, or prohibitions. They can be used to protect domestic industries from competition.^[5]In addition, NTB’s can arise from import bans, import licenses, export subsidies, unjustified sanitary and phytosanitary conditions, restrictive licenses and so on. This paper examines the impact of Non-Tariff Barriers on the African Continental Free Trade Area; and makes a case for their elimination, in furtherance of the AfCFTA’s goal.

   NTBs are government regulations, rules and directive delays that seek to eradicate foreign goods from local markets, while promoting local brands of goods for customer’s satisfaction. Non-Tariff Barriers include a wide range of restrictive practices, other than tariffs, that make trade difficult and costly.[6] Examples are customs clearance delays, restrictive licensing processes, certification challenges, uncoordinated transport related regulations and corruption. The AfCFTA’s general categorization of NTBs also mentions restrictive government practices or their toleration, customs and administrative entry procedures, Technical Barriers to Trade, Sanitary and Phytosanitary Measures, specific limitations, and charges on imports. Some of the notable types of NTBs are: embargo, subsidies, local content requirement and technical barriers.^[7]

Embargo

Embargo connotes a total blockage of trade between countries. This type of trade barrier completely bans importation of goods and services from a particular country. With embargoes, there is an official ban by the government from trading on particular goods and services. This is usually done in pursuit of a country’s economic and political goals, as well as to exert its territorial sovereignty against other countries.

Subsidies

Subsidies refers to the policy and action of government which allows local firms to sell their products at low cost compared to the foreign markets. In a situation where foreign firms appear to dominate the sectors of the country’s economy, the government may impose heavier taxes on them and reduce the tax for the local manufacturers to make for a competitive environment. This in turn, drives a demand for locally made goods and shrinks up demand for foreign goods in the local market.

Local Content Requirement

Local Content Requirement requires foreign companies to use locally made goods or services, as opposed to importing same. Thus, government imposes a quota on goods or services to be imported, making way for goods made domestically. Foreign companies are thus compelled to use locally made goods rather than importing and assembling foreign products. This requirement increases the local production margin against the foreign goods margin, automatically. This could also result in increase, in the employment margin in the local market and higher government revenue.

Technical Barriers

Technical Barriers makes it imperative for the products to be exported to and imported from other countries, to be of high quality standards and thoroughly tested and certified by the health department. This is a way of guaranteeing optimal standards and assuring the quality of goods and services.[8]

Other NTBs include but are not limited to quota, licenses, sanctions and voluntary export restraints. Licenses, as used in many countries, gives businesses lawful authority to import goods freely; otherwise such activity would be restricted. Quotas, allow the country in question to designate a limitation as to the quantity of a particular good that can be imported into or exported from its market. Sanctions are those administrative actions or additional customs and trade procedure that a country deliberately adopts to impede trade^[9].

Making a Case for the Removal of Non-Tariff Barriers

An International Monetary Fund (IMF) study has also shown that the removal of Non-Tariff Barriers will yield tariff liberalization to low income countries particularly Africa^[10]. The AfCFTA on its part, has not remained silent regarding this issue. According to the Provisions of Annex 5 of the AfCFTA on Non-Tariff Barriers, it was agreed that an online mechanism would be set up for the purpose of addressing issues relating to NTBs. Thus, an online tool “tradebarriers.africa” was launched by the United Nations Conference on Trade and Development (UNCTAD) in collaboration with the African Union in January 2020 to support the AfCFTA’s quest to track and settle NTBs. This tool helps traders, freighters and firms who are directly affected by the NTBs to identify and report such obstacles through a short offline messaging service.[11] Upon receipt of these complaints, the appropriate government authorities will then follow up on the complaint to resolve it. These government authorities will be supported by the NTBs Coordination Unit in the AfCFTA Secretariat and NTB Units in each Regional Economic Community (REC), as well as NTB National Focal Points (NFPs) in various member countries. As such, this will ensure that the complaints are resolved at all levels and do not slip through any cracks. Whatever escapes the NFP will be addressed by the REC. There is also provision to escalate queries up to the African Union level for adequate resolution. All complaints will be reviewed and examined through agreed procedure and within specified timeframes.

Addressing these NTBs goes beyond merely setting up a framework for reporting and resolving them. Implementation is more important. In the words of Carl Chirwa, The Head of International Banking at Bank One, breaking NTBs requires a lot of political will because “you can reduce tariffs on everything, but when you get to a border, there may still be a lot of admin and documentation to do, which increases cost” [12]. Observably, there is still some reluctance and holding back in some African Countries when it comes to the AfCFTA. For instance, although the AfCFTA Agreement became operative on 30 May 2019, Nigeria held back from signing the AfCFTA agreement until July 2019[13], after which it turned round to shut its borders to neighbouring African countries just about a month later. Furthermore, there is perceivable distrust amongst member states of the African Union, as each tries to secure its local market from an influx of foreign goods from fellow African countries. This is interesting because this is not the case when it comes to foreign goods from non-African countries.

The pertinent question to ask at this point is whether NTBs actually facilitate or impede free trade relations between member countries of the AU. In other words, are NTBs contrary to the spirit of the AfCFTA agreement or otherwise? The answer to this, is not farfetched. Notwithstanding the role they may play as a check and balance mechanism within intra African markets, NTBs may be inimical to the successful implementation of the AfCFTA agreement in its nascent stages, and the overall success of the Free Trade Area in the long haul. As it were, they currently hinder the smooth operation of the Free Trade Area. An NTB such as an embargo placed on the inflow of goods from particular countries may foster trade hostilities between countries, with a spillover effect on their socio-political relations as well. NTBs such as subsidies and local content requirement interfere with the normal healthy market laws of demand and supply, with the counterproductive potential to upset the market equilibrium sooner or later.

NTBs make intra-African trade more expensive especially for importers and exporters. They slow down the movement of goods and services within the continent, and poses the danger of revenue loss to signatory members of the AfCFTA agreement. A report by UNCTAD said if the trade barriers are removed, the African economy could gain $20 billion, much more than the $3.6 billion it could recover by eliminating tariffs[14].

Conclusion

From the foregoing, it is evident that The African Continental Free Trade Area could be the game changer, trade wise, for the African continent. It offers numerous benefits such as interstate cooperation, poverty alleviation, and increase in GDP amongst other benefits. However, its laudable objectives and potential benefits will remain unaccomplished and unrealized, if concerted efforts and measures are not put in place to overcome the hurdles hindering its implementation. Having identified non-tariff barriers as a key hurdle to be crossed, concerted efforts must be made by stakeholders at the national and regional levels, as well as at the level of the African Union, to ensure a total and swift elimination of NTBs.

References

1. About the African Continental Free Trade Area (AfCFTA). https://afcfta.au.int/en/about Date Accessed: 6th August, 2021.

• AfCFTA support programme to eliminate non-tariff barriers, increase regulatory transparency and promote industrial diversification. https://unctad.org/project/afcfta-support-programme-eliminate-non-tariff-barriers-increase-regulatory-transparency-and  Date Accessed: 17th September, 2021.

• E. Tarver (2021) Non-tariff Barrier Definition  https://www.investopedia.com/terms/n/nontariff-barrier.asp Date Accessed: 19^th November, 2021.

• Four Trade Barriers Government. https://www.ukessays.com/essays/marketing/four-trade-barriers-government-marketing-essay.php Date Accessed: 18^th November, 2021.

• G. Erasmus (2019) Dealing with Non-Tariff Barriers under the AfCFTA: What are the Prospects? https://www.tralac.org/blog/article/14345-dealing-with-non-tariff-barriers-under-the-afcfta-what-are-the-prospects.html#_ftn8 Date Accessed: 20^th November, 2021

• Guardian Nigeria (2020) ‘Non-tariff barriers could slow down AfCFTA if not addressed’. https://guardian.ng/business-services/non-tariff-barriers-could-slow-down-afcfta-if-not-addressed/ . Date Accessed: 29^th November, 2021.

• M. Martins (2021). The Strategic Roles African Lawyers Play in the Implementation of the African Continental Free Trade Area (AfCFTA) Agreement. https://diverselaw.org.ng/a-webinar-series-designed-to-sensitise-african-lawyers-on-their-strategic-role-in-engendering-the-success-of-the-african-continental-free-trade-area-agreement-and-optimising-the-benefits-from-implemen/ Date Accessed: 20^th November, 2021.

• M. White, Africa takes effect but lifting non trade barriers proves problematic, Global Trade Review https://www.gtreview.com/news/africa/afcfta-takes-effect-but-lifting-non-tariff-barriers-will-prove-problematic/ Date Accessed: 20^th November, 2021.

• The Investopedia Team (2020) Free Trade Area Definition https://www.investopedia.com/terms/f/free_trade_area.asp Date Sourced: 18^th November, 2021.

1. Nontariff Barrier Definition. https://www.investopedia.com/terms/n/nontariff-barrier.asp Dare Accessed: 19^th November, 2021.

1. Non-Tariff Barriers to Trade. https://www.tradebarriers.org/ntb/non_tariff_barriers. Date Accessed: 11th October, 2021.

1. World Economic Outlook, October 2020: A Long and Difficult Ascent. https://www.imf.org/en/Publications/WEO/Issues/2020/09/30/world-economic-outlook-october-2020 Date Accessed: 19^th November, 2021.

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[1] About the African Continental Free Trade Area (AfCFTA). https://afcfta.au.int/en/about Date Accessed: 6th August, 2021

[2] M. Martins (2021). The Strategic Roles African Lawyers Play in the Implementation of the African Continental Free Trade Area (AfCFTA) Agreement. https://diverselaw.org.ng/a-webinar-series-designed-to-sensitise-african-lawyers-on-their-strategic-role-in-engendering-the-success-of-the-african-continental-free-trade-area-agreement-and-optimising-the-benefits-from-implemen/ Date Accessed: 20^th November, 2021

[3] https://www.ukessays.com/essays/marketing/four-trade-barriers-government-marketing-essay.php Date Accessed: 18^th November, 2021

[4] AfCFTA support programme to eliminate non-tariff barriers, increase regulatory transparency and promote industrial diversification. https://unctad.org/project/afcfta-support-programme-eliminate-non-tariff-barriers-increase-regulatory-transparency-and  Date Accessed: 17th September, 2021.

[5] Non-Tariff Barriers to Trade. https://www.tradebarriers.org/ntb/non_tariff_barriers Date Accessed: 11th October, 2021.

[6] G. Erasmus (2019) Dealing with Non-Tariff Barriers under the AfCFTA: What are the Prospects?

https://www.tralac.org/blog/article/14345-dealing-with-non-tariff-barriers-under-the-afcfta-what-are-the-prospects.html#_ftn8 Date Accessed: 20^th November, 2021

[7] Ibid

[8] Four Trade Barriers Government. https://www.ukessays.com/essays/marketing/four-trade-barriers-government-marketing-essay.php Date Accessed: 18^th November, 2021

[9] E. Tarver (2021) Nontariff Barrier Definition. https://www.investopedia.com/terms/n/nontariff-barrier.asp Dare Accessed: 19^th November,, 2021

[10] World Economic Outlook, October 2020: A Long and Difficult Ascent. https://www.imf.org/en/Publications/WEO/Issues/2020/09/30/world-economic-outlook-october-2020 Date Accessed: 19^th November, 2021.

[11] Ibid.

[12] M. White (2021) AfCFTA takes effect but lifting non-tariff barriers will prove problematic. https://www.gtreview.com/news/africa/afcfta-takes-effect-but-lifting-non-tariff-barriers-will-prove-problematic/ Date Accessed: 20^th November, 2021.

[13] President Signs the Agreement Establishing the AfCFTA. https://andersentax.ng/president-signs-the-agreement-establishing-the-african-continental-free-trade-area/?utm_source=Mondaq&utm_medium=syndication&utm_campaign=View-Original. Date Accessed: 30^th November, 2021.

[14] Guardian Nigeria (2020) ‘Non-tariff barriers could slow down AfCFTA if not addressed’. https://guardian.ng/business-services/non-tariff-barriers-could-slow-down-afcfta-if-not-addressed/ . Date Accessed: 29^th November, 2021.

Corporate Governance is concerned with practices and procedures for trying to ensure that a company is run in such a way that it achieves its objectives. Its principles set out and allocate responsibility to various stakeholders in the corporate organization. Good corporate   governance   thrives   successfully   when   anchored   upon   some   guided principles.  These   principles are as follows: the   right of shareholders, the equitable treatment of shareholders, the role of stakeholders in corporate governance, the role of regulators, disclosure and transparency, the responsibilities of the board and the role of auditors and audit committee.

Specific Principles of Corporate Governance in Nigeria

The   Companies  and Allied  Matters   Act   2020  has  been   the  major   law   regulating corporate governance in Nigeria for decades. It provides some mechanisms for good corporate   governance   among   which   are   appointment   of   directors   by   the   company, removal   of   directors   by   ordinary   resolution,   duties   and   liabilities   of   directors, provisions   for   auditors   and   audit   committee,   disclosure   provisions,   mandatory

The   Companies and Allied Matters   Act   2020 has been   the major   law   regulating corporate governance in Nigeria for decades. It provides some mechanisms for good corporate   governance   among   which   are   appointment   of   directors   by   the   company, removal   of   directors   by   ordinary   resolution, duties   and   liabilities   of   directors, provisions   for   auditors   and   audit   committee, disclosure   provisions, mandatory involvement of shareholders in some corporate decisions. Simply put differently, it is noteworthy to state that the Companies and Allied Matters Act 2020, in an attempt to codify salient common law principles, explicitly provided for various duties of directors. Prominent sections on this regard provide as follows: that a director owes a fiduciary relationship towards the company;[1] should act in the best interest of the company at all times;[2] exercise his powers for the specified purpose and not collateral purpose;[3] that the duties  of  a director should not conflict with his personal interest;[4]  that a  director must discharge his  duties honestly and in good faith, with  all degree of skill  and care  which a  reasonable  and  prudent  director will exercise in comparable circumstances.[5]

The objects of these statutory admonitions form part of an intricate web whose objective is to   establish a code   of corporate governance.  From   the foregoing, it   is apparent   that   standards   of   corporate   governance   refer   to   ideal injunctions, which conformity   ensures   the   protection   of   the   corporate   interest   of   companies, their members, employees, creditors and the public while enhancing the profitability   of enterprises.  In 2003, at the instance of the Securities and Exchange Commission and the Corporate Affairs Commission, code of best practice on corporate governance in Nigeria was released with the objective set out as follows:

 A code to make provisions for the best practice to be followed by public quoted   companies   and   for   all   other   companies   with   multiples stakeholders registered in Nigeria   in   the exercise of power   over   the direction   of the enterprise, the supervision of executive actions, the transparency   and   accountability   in   government   of these companies within the regulatory framework and market  and, for   other purposes connected therewith.[1]

Subsequently, the Securities and Exchange Commission (SEC) Code 2011; the Central   Bank   of   Nigeria  (CBN)   Code  2006;   the   National   Insurance   Commission(NAICOM) Code   and the   Pension Commission   (PENCOM) Code,   were issued  and released by the   respective  regulatory institutions   to entrench  the   observance of the principles  of corporate governance   by   the  corporate entities  under   their   watch  and regulation. Other  sources   of   corporate  governance   in  Nigeria   include:   Mortgage Institutions Act; Listing Rules of the Stock Exchange; Code of Corporate Governance for Banks and Discount Houses in Nigeria and Guidelines for Whistle Blowing in the Nigerian Banking Industry; Code  of Corporate Governance  for  Public Companies in Nigeria; Code of Conduct for Capital Market Operators and their Employees; etc. However, it is noteworthy to state that the compliance with the provisions of the SEC Code is merely advisory and not obligatory, whereas the observance of the Central Bank of Nigeria (CBN) Code is mandatory on all banks and financial institutions in Nigeria.

Ensuring that one is answerable for one’s actions.

·Openness/Honesty/Transparency – acting with sincerity, clarity, uprightness and candour.

·Independence – ability to take decisions without influence.

·Responsibility- acting responsibly and taking responsibility for one’s actions.

·Integrity/ Ethical conduct- maintaining  conducts that commands  the trust and

respect of others.  Doing things  right even when  it appears one  can get away

with doing otherwise.

·Reputation/ Reputational Risk- include being perceived as being upright and of

CORPORATE GOVERNANCE UNDER COMPANIES AND ALLIED MATTERS ACT 2020
CAMA 2020, has made intentional efforts to see to the efficient, accountable and transparent management of companies in Nigeria. This can be seen in the areas of directors, secretaries, audit and auditors, meetings, corporate finance. The following sections are to be considered.

Directors: In accordance with the corporate governance code, directors of public companies are now required to disclose not only their age at appointment, but also previous directorships in other public companies before taking up new appointments. A person, cannot be a director of more than five public companies at the same time. Upon nomination as a director, such persons must disclose their existing positions on the board of other public companies before taking on new appointment and anybody who before the enactment of this act was a director in more than five companies, has two years to comply with this provision. Additionally, CAMA 2020, now requires public companies to maintain a minimum of three (3) independent directors at all times. While the foregoing is limited to public companies, small companies are now permitted to have a minimum of one director. A small company being a private company that has an annual turnover of N120, 000, 000 and net asset value of not more than N60, 000, 000, with no foreigner as its member and 51% share capital own by the directors. Also, any person, (shareholder) who nominate candidate for the board who would

comprise a majority of the members of the board shall nominate at least three persons who would be independent directors.

All companies must now keep a register of directors address residential addresses. This register shall state the usual residential address of each director of the company. If a company fails to comply with this provision, it will be on default and liable to a fine as the commission may specify.

Meetings: In keeping with contemporary realities imposed by the outbreak of the global pandemic Covid 19, CAMA 2020, now permits the use of electronic means for meeting purposes so far as such meetings are conducted in accordance with the articles of the company. This is to facilitate attendance of members in a meeting at minimal cost. However, this concession is limited to private companies, as all public companies are still required to hold meetings physically. Also, statutory and annual general must be held in Nigeria.

The ordinary business of a company’s annual general meeting (AGM) has been amended to include the remuneration of its managers. According to the new provision, a company’s ordinary business includes the following:
Examining financial statements
Dividend declaration
Director appointment and removal
Appointing and compensating auditors (optional for small businesses)
Appoint a member to the audit committee (optional for small companies)
Disclosure of the compensation paid to the company’s executives

Company Secretary: All companies were previously required under CAMA 1990 to appoint a company secretary. This position has since been amended to exempt small companies from the mandatory appointment of a company secretary. In light of the fact that the CAMA, 2020 makes it optional for small companies, it should be stated that the importance of a company secretary cannot be overstated as it ensures the company’s administrative effectiveness.

Public companies are required to appoint a secretary within six months after the commencement of this Act in a situation where there was none. Where a person is appointed secretary of a company, a letter by such person consenting to act in that capacity shall be included in the documents to be filed at CAC.

Restriction on the President/CEO Position in a Private Company: To strengthen the protection of a company’s minority shareholders, the CAMA 2020 prohibits private companies from appointing a director to the position of Chairman and Chief Executive Officer.

Significant Control and Substantial Interest: To further ensure transparency in corporate governance, CAMA 2020 has extended the requirement to notify the company in writing of significant control or divestment of shares. Previously, this obligation applied only to public companies. This is no longer the case, as shareholders with a majority stake in any type of company are now required to make such disclosures. Notably, CAMA 2020 makes no definition of what constitutes significant control.

This is critical because both private and public companies are required to disclose significant controlling interests. The term “significant shareholder” as defined in Section 120 (2) of CAMA, 2020, applies only to public companies. Regardless, it is reasonable to assume that the same should apply to private businesses. Additionally, CAMA 2020 redefines a shareholder’s percentage interest in order to qualify as a substantial shareholder if the shareholder holds at least 5% of total voting rights. This is in contrast to the 10% cap imposed by the now-defunct CAMA 2004.

Shareholders’ Pre-Emptive Rights: In the case of private companies, the transfer of shares is governed by the company’s articles of association. CAMA 2020, on the other hand, now places some restrictions on the manner in which shares may be transferred in relation to existing shareholder rights. Although the term “pre-emptive right of shareholders” is not unfamiliar in Nigeria’s corporate world, it has frequently been left to a company’s discretion.

Progressively, CAMA 2020 now codifies this right by clarifying that a company may not sell the shares without first offering them to existing members in proportion to their existing holdings. This implies that a when a public company wants to issue shares through public or private placement, it has to conduct a right issue to the existing shareholders first. As a result of the foregoing, existing shareholders are protected from undue dilution and are given preference over non-members of the company.

This safeguards shareholders against nefarious acquisitions of the company through third-party arrangements. Additionally, to the foregoing, CAMA 2020 now requires a private company to obtain the consent of all its members prior to making any sale that exceeds 50% of the total value of the company’s assets. Note that this provision may be varied by the articles of association.

Common seal: The CAMA 2020 has now made the usage of common seal optional and when a company decides to have one, the design and use of the seal shall be regulated by the articles and its name shall be engraved in legible latters. Thus, an authorized signature of a company is now sufficient to execute any contract entered into by the business.
Netting: Notably, the introduction of netting is one of the most notable additions to CAMA 2020’s financial contract provisions. The use of netting to help assess and reduce financial obligations was unknown under the repealed CAMA 2004.  Thus, this new addition represents a quantum leap in terms of corporate governance in Nigeria, as it is consistent with international best practices. Netting agreements can now be concluded and enforced against

an insolvent party, guarantor, or other person providing security under the provisions of the CAMA 2020.

Audit Obligation: Generally, each company is required to appoint an auditor or auditors to audit its financial records and statements for the preceding fiscal year at its annual general meeting. This is no longer the case, as small companies and businesses that have ceased operations since incorporation (excluding insurance companies and banks) are now exempt from this requirement.

Additionally, public companies must now make their audited financial statements available on their website. Also, debtors of a company to the amount of N500, 000, shareholder or shareholder’s spouse of a company whose employee is an officer of the company, a person who is or whose partner is an employee of a debenture holder of the company and an employee of a consultant to the company who has been engaged for more than one year in the maintenance of any of the company’s financial records or preparation of any of its financial statements are disqualified from being appointed as auditors of the company.

PROBLEMS FACING CORPORATE GOVERNANCE IN NIGERIA

Corporate Governance In Nigeria Under The CAMA 2020 And The Nigerian Code Of Corporate Governance . divorced from the scourge of corruption, greed and avarice in the Nigerian society. To this effect, Denton-West JCA, in Balonwu v Obi, asserted as follows:

We lack good leadership in our body politic. A good leader is someone who is able to lead and has the ability to influence his people positively to attain and achieve greater heights for the good of humanity. A good leader is selfless and has only the interest of the people he is leading at heart. A leader’s action always has a rippling effect on the society. The leadership’s  wrong   actions  can   destroy  the   society   and   bring   it   to naught, while the acts of good and seasoned leaders could catapult our country Nigeria to the country  we all dream   about…a   good   leader should adhere to law and observe same.

The Issue of Leadership Ethics

It is pertinent to  state that a company’s culture comprises  of years of  history, which includes   its  successes and failures, good and bad  decisions   and   its   individual   and collective   stories. Thus, the   issue of   corporate   leadership   in   Nigeria  cannot   be divorced from the scourge of corruption, greed and avarice in the Nigerian society. To this effect, Denton-West JCA, in Balonwu v Obi, asserted as follows: We lack good leadership in our body politic. A good leader is someone who is able to lead and has the ability to influence his people positively to attain and achieve greater heights for the good of humanity. A good leader is selfless and has only the interest of the people he is leading at heart. A leader’s action always has a rippling effect on the society. The leadership’s wrong   actions  can   destroy  the   society   and   bring   it   to naught, while the acts of good and seasoned leaders could catapult our country   Nigeria   to   the   country  we all dream   about…a   good   leader should adhere to law and observe same.[1]

The Issue of Separation of Ownership from Control

Corporate governance is evidently a by-product of separation of ownership and control.

Thus, Adam Smith in giving credence to the agency relationship that exist between the members and the board, stated thus:

Directors being  managers of other  people’s  money than  their  own, it cannot  well be  expected  that they should watch  over it  with the  same anxious   vigilance   with   which   the   partners   in   a   private   company, frequently  watch over their own. Negligence and profusion, therefore

The Issue Of Separation Of Ownership From Control Corporate governance is evidently a by-product of separation of ownership and control. Thus, Adam Smith in giving credence to the agency relationship that exist between the members and the board, stated thus: Directors being managers of other people’s money than their own, it cannot  well be  expected  that they should watch  over it  with the  same anxious   vigilance   with   which   the   partners   in   a   private   company, frequently  watch over their own. Negligence and profusion, therefore must always prevail more or less in the management of

the affairs of a joint stock company.[1]This has therefore given rise to a number of stakeholder approaches to corporate governance which envisage that the directors and managers have other persons to serve apart from the shareholders. These persons include the employees, suppliers and host communities   at   large. This   is   technically   referred   to   as   Corporate   Social Responsibility (CSR). Hence, a good corporate governance practice aids in reconciling the tension that exist between the shareholders and stakeholders.[2] Accordingly, CSR isa business strategy to make the  ultimate goals of a  company more achievable and as well more transparent when making long term business decisions.

Ineffective Checks On The Powers Of Directors

It is self-evident that the Companies   and Allied   Matters Act   2020 makes veritable provisions for corporate checks to curb the arbitrary actions of the board, these checks, in   most cases, are   inefficacious and   therefore   inadequate   to   serve there   genuine objectives. Illustratively,   the   residual   duties   of   the   members   against   the   actions   and inactions of the board is expressly provided for in section 87 (5) CAMA. These include the power of the members in general meeting to act if the board is disqualified or is unable to act because of a deadlock, the power to  institute legal proceedings in the name of and on behalf of the company, power to ratify or confirm any action taken by the board of directors, and the power to make recommendations to the board regarding action   to   be   taken   by   the   board.   Superficially,   the   above   provision   is   highly commendable but in practice it is difficult because the deadlock which can induce the court to exercise its jurisdiction under the just and equitable clause must be a complete deadlock, which, most times, may not exist.

Regulatory Limitations On The Rights And Powers Of The Members Furthermore, the Companies and Allied Matters Act 2020 places several limitations on the   rights   and   powers   of   the members thereby circumscribing the   efficacy of   the members   in   carrying out   their   oversight   functions of   monitoring   and curbing  the excesses of  the  board in  the discharge of  their  duties. These  limitations  include the rights of members to attend and vote in meetings[3]  which is limited to the extent that the articles may provide that a member shall not be entitled to attend and vote if he has not paid  all  calls or  sums  payable by  him in respect of the member’s  shares in  the company, the right to requisition extra ordinary general meetings[4]  which can only be exercised by the members having not less than

one-tenth of the paid up capital of the company, the right to  approve  and declare dividend,  the right to demand  voting by poll[1]  which is only   available   to   members  for the election   of   the   chairman  of the meeting and adjournment,[2] the right to appoint and remove directors/ auditors.38In a similar vein, with respect to the declaration of dividend, members cannot declare   the   dividend   until   same   is   recommended   by   the   directors.   Furthermore, members can only declare what the directors recommend to them and not more. This therefore empowers the directors to frustrate the declaration of dividends for a period of time on the excuse that the payment will not be justified by the profits of the company or that after payment the company would be unable to pay its liabilities as they become due. It is noteworthy that   the member’s right   to   appoint directors is   usually   not absolute. While they are empowered to  appoint first  directors,39  the  appointment of subsequent directors is most times exploited by the board under the façade of filling a casual vacancy in the board.40The above stated statutory limitations act as a clog in the wheel of good practice of corporate governance in Nigeria.

The Issue of Supremacy and Control

It is a general presumption that the members in general meeting are the supreme organ of a company and that the board of directors are merely agents of the company who are subject to the   control of  the   members in  general   meeting.  However,  this  position appears to have been changed by subsequent decisions, which are now to the effect that the members  in  general meeting cannot interfere with  the  decisions of  the  directors unless they are contrary to the provisions of the Act or Articles.30

The above stated common law position was adopted in sections 87 (2) to (4) of the CAMA 2020. By sub section (2), the articles of association determines the sharing of powers between the two organs except otherwise stipulated in the Act. By virtue of section 87 (3) of the CAMA 2020, once the management of a company is given to the board of  directors, it  can  exercise  the  power of   management even  if the  articles  of association is  silent   on the  matter. Simply put   differently, the  board   of directors  is saddled with the day to day operations of a company.

Nonetheless, what appears to be a sword in the hands of the members in general meeting as evidently seen in section 87(4) CAMA 2020 is akin to a toothless bull dog which merely  barks  without causing  any  harm to  its  victim. This assertion is  borne from the fact that the said section empowers the board of directors not to be bound to obey   the   directions   of   the   members   in   general   meeting   except   the   articles   says otherwise   or   if   the   board   did   not   act   in   good   faith   and   with   due   diligence. Unfortunately,   the   Act   did   not   define   the   expression   ‘good   faith’   and   ‘due diligence’. These enormous powers conferred on the directors have become a ground for the abuse of the exercise of their powers and a challenge to corporate governance in

The Issue of Supremacy and Control

It is a general presumption that the members in general meeting are the supreme organ of a company and that the board of directors are merely agents of the company who are subject to the   control of  the   members in  general   meeting.[3]  However,  this  position appears to have been changed by subsequent decisions, which are now to the effect that the members  in  general meeting cannot interfere with  the  decisions of  the  directors unless they are contrary to the provisions of the Act or Articles.[4]The above stated common law position was adopted in sections 87 (2) to (4) of the CAMA 2020. By sub section (2), the articles of association determine the sharing of powers between the two organs except otherwise stipulated in the Act. By virtue of section 87 (3) of the CAMA 2020, once the management of a company is given to the board of directors, it can exercise the power of   management even if the articles of association is silent   on the  matter. Simply put   differently, the board   of directors is saddled with the day to day operations of a company. Nonetheless, what appears to be a sword in the hands of the members in general meeting as evidently seen in section 87(4) CAMA 2020 is akin to a toothless bull dog which merely barks  without causing  any  harm to  its  victim. This assertion is  borne from the fact that the said section empowers the board of directors not to be bound to obey   the   directions   of   the   members   in   general   meeting   except   the   articles   says otherwise   or   if   the   board   did   not   act   in   good   faith   and   with   due   diligence. Unfortunately,   the   Act   did   not   define   the   expression   ‘good   faith’   and   ‘due diligence’.[5]These enormous powers conferred on the directors have become a ground for the abuse of the exercise of their powers and a challenge to corporate governance in Nigeria. This has paved way for the emergence of the board of directors as corporate monsters, while   subjecting   the   shareholders   to   a   subservient   status   in   corporate administration.

 CORPORATE ACCOUNTABILITY UNDER THE COMPANIES AND ALLIED MATTERS ACT 2020

In August 2020, President Muhammadu Buhari of Nigeria signed the Companies and Allied Matters Act (CAMA), putting in place a new registry that will enhance corporate accountability and transparency by disclosing persons with significant control of companies. According to Registrar General Alhaji Garba Abubakar, who leads the autonomous body responsible for the register, the OGP framework was the single most important platform used to achieve consensus amongst government and civil society stakeholders in support of the new law. Nigeria is also the recipient of the OGP MDTF implementation award, that will support the development of the infrastructure necessary for an effective beneficial ownership registry. This reform could mobilize domestic resources and fight corruption by making it harder for people to use anonymous companies to avoid taxation and contribute to illicit financial flows.

While the innovations to ease business have been reviewed quite exhaustively, the legislative document has not received its due credit on its key contributory role to corporate accountability and private sector governance, which it owes largely to the transparency clause requiring the disclosure of persons with significant control of companies in a register of beneficial owners. By extension, this provision which portends the efficient regulation of business entities, complements efforts towards greatly improving domestic resource revenue in its potential to address the curbing of illicit financial outflows, which costs the country around 17 billion US dollars ($17bn), annually to Nigerian and international companies operating within the Nigerian jurisdiction.

PROBLEM FACING CORPORATE ACCOUNTABILITY UNDER CAMA 2020.

Haven stated the innovations introduced under the CAMA 2020, geared towards making significant development in companies’ corporate accountability, one reoccurring challenge remains the implementation and compliance by companies to these regulations.

Below are some highlighted problems:

Non-Inclusion

There needs to be inclusion by engaging key stakeholders and emphasizing gains and by providing ease of compliance. The integration process commenced two years ago by the Open Government Partnership in Nigeria, between the Corporate Affairs Commission (CAC) and Anti-corruption Agencies (ACAs), Bureau of Public Procurement (BPP), organized private sector (OPS) and other open contract and procurement-saddled institutions, somewhat guarantees the sustenance of the commitment. Also, while a large section of the organized private sector (OPS) is in support of this transparency and accountability drive, others have raised cogent concerns over information rights for public disclosure posing security concerns. This can however be addressed in process implementation by regulators (CAC) who have guaranteed secure accessibility to certain information.

Value re-orientation

The realization that both the government and the private sector must contribute their quota towards building Nigeria’s economy and drive development is now mainstream and progressive governments globally are designing policies and roadmaps to this end. It is necessary to note that the register will provide both checks and benefits to companies and the mentality that its establishment will benefit the country to the detriment of the OPS and multi-national enterprises (MNEs) should be eschewed. A true ecosystem of open governance must include open collaborative processes and it is imperative that even without a law, private sector operators like the OPS and CSOs should impose on their corporate governance structures, the principles, processes and values that make disclosure a default action and advocacy must be sustained for the paradigm shift for self-regulation by the OPS and CSOs to this effect.

Verification

With the establishment of the register, there is a new challenge as existing rules emphasize the need for accurate, reliable and up-to-date beneficial ownership information. According to a 2018 study on how well G20 and guest countries are implementing the G20 High Level Principles on Beneficial Ownership, no governments that collect beneficial ownership information, verify it. However, a paper published by the Tax Justice Network (TJN) proposed a way of checking the validity of data provided: an information technology system combined with advanced analytics to identify red flags.

The verification process involves ensuring that people in the official register are who they say they are (authentication), that those persons have agreed to be involved in a legal entity (authorization), and that all the registered data is valid (for example, the address exists and the purpose of the company is accurate). It also involves checks after the legal entity is set up to ensure information is up-to-date and to identify potential red flags. It proposes a verification process that is fully automated information technology system with human supervision with access to relevant data, held by national and foreign authorities for cross-checking and advanced analysis.

The process could be managed by the beneficial ownership or company register, or another public body that has experience with data analytics, such as financial intelligence units or tax authorities and the responsible body needs to be adequately resourced and empowered to conduct such checks.

Recommendations

This paper hereby strongly recommends as follows:

1. There   should   be   a   strict   and total compliance with the codes of   corporate governance and corporate accountability in Nigeria. Accordingly, the codes as put in place by the CAMA, SEC and other   regulatory agencies in Nigeria, as well as the   World   Bank Corporate Governance Reports and the 1999 Organization for Economic Cooperation and Development (OECD) principles of corporate governance which was revised in2004 should not be allowed to be optional to companies but should be strictly enforced in order to achieve its desired goals;

2. Similarly, there is a dire need to ensure transparency and adequate check on the excesses of the corporate organs. Thus, the provisions of section 87(4) of the CAMA 2020, which excuses the board of directors from obeying the directions or instructions of the members in general meeting where the article does not provide otherwise should be amended. Also, the provisions of Section 280 (b) of  the CAMA 2020  which limits  the disqualification of appointment of directors for a period of ten years who commits any offence involving fraud, to include those found liable under Sections 668 to 670 of the CAMA 2020, which bothers on fraudulent acts of officers of a company detected in the course of liquidation;

3. Furthermore, the fiduciary   duty   of   directors   to   act in the   best   interest   of   the company, employees and members under Section 305 (4) CAMA 2020 should be   expanded   to   include   suppliers, customers, host   community   and   the environment.   It   is   the submission of this paper that such amendment will further serve as a statutory basis for the practice of corporate social responsibility in Nigeria, rather than its present fluid and voluntary state.

Conclusion
In conclusion, these analysis of the concepts of corporate governance and corporate accountability under the Companies and Allied Matters Act would advertently help to improve the Nigerian business landscape by increasing the availability of commercial opportunities and corporate responsibilities  both within the country and beyond international borders. However, the challenge faced in the corporate sector in Nigeria it’s the implementation and compliance of these provisions. It is hoped that the CAC’s implementation of the CAMA, 2020 will alleviate the burden of doing business in Nigeria and improve the Corporate governance in Nigeria.

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[1] CAMA (repealed), s. 225 (1); CAMA 2020, s.249 (1).

[2] CAMA (repealed), s. 225 (5); CAMA 2020, s. 225(5)

[3]  Isle of Wright Railway v Tahourdin[1883] 25 Ch.D, 320.

[4]  Automatic Self- Cleansing Filter Syndicate Co v Cuninghame [1906] 2 Ch.D, 34; Shaw & Sons (Salford) Ltd v Shaw [1935] 2 KB, 113

[5] 1. M. O. Sofowora, ‘Shareholders, Directors, Corporate Managers and the Balance of Power’ [2000] 4, Law and Business Quarterly, 122

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[1]  Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (University of Chicago Press: 1976), 264-265

[2] O. A. Onwumere, ‘The Evolving Interplay between Corporate Governance and Corporate Social Responsibility and its Legal Implications on Multinational Companies’ [2018] 10[1], Journal of Corporate Governance, 2111

[3] CAMA (repealed), ss.211-215; CAMA 2020, ss. 235-240

[4] CAMA (repealed), s.215; CAMA 2020, s.239

[1] [2007] 5 NWLR (Pt. 1028) 488, 561-562, Paras F-D

[1] J. O. Orojo, Company Law and Practice in Nigeria, (5th edn: Lexis Nexis Group, 2008) 282.

[1] CAMA (repealed), s. 279 (1) (2); CAMA 2020, s.305 (1) (2).

[2] CAMA (repealed), s. 279 (3) (4); CAMA 2020, s.305 (3) (4).

[3] CAMA (repealed), s. 279 (5); CAMA 2020, s.305 (5).

[4] CAMA (repealed), s. 280; CAMA 2020, s.306

[5]  CAMA (repealed), s. 282; CAMA 2020, s.308

INTRODUCTION

At the 2012 AU Summit, Heads of State and Government adopted a Decision on the Establishment of a Continental Free Trade Area and endorsed the Action Plan on Boosting Intra-Africa Trade which identifies seven areas of cooperation namely: trade policy; trade facilitation; productive capacity; trade related infrastructure; trade finance; trade information; and factor market integration. These are expected to lay the foundation for the establishment of a Continental Customs Union at a later stage.

The African Continental Free Trade Area (AfCFTA) agreement will create the largest free trade area in the world measured by the number of countries participating. The impact connects 1.3 billion people across 55 countries with a combined gross domestic product (GDP) valued at US$3.4 trillion. It has the potential to lift 30 million people out of extreme poverty, but achieving its full potential will depend on putting in place significant policy reforms and trade facilitation measures.

The African Continental Free Trade Agreement represents a major opportunity for countries to boost growth, reduce poverty, and broaden economic inclusion. Implementing AfCFTA would:

• Lift 30 million Africans out of extreme poverty and boost the incomes of nearly 68 million others who live on less than $5.50 a day;
• Boost Africa’s income by $450 billion by 2035 (a gain of 7 percent) while adding $76 billion to the income of the rest of the world.

• Increase Africa’s exports by $560 billion, mostly in manufacturing.
• Spur larger wage gains for women (10.5 percent) than for men (9.9 percent).
• Boost wages for both skilled and unskilled workers—10.3 percent for unskilled workers, and 9.8 percent for skilled workers.

The chart

THE CHALLENGES

The provision of the Treaty will potentially affect current company rules regarding minimum capital, directorship and shareholding in many African countries. It will also have effect on capital control exchange regulation and local content rules. There is the need to harmonise existing rules such as the rules of origin which differ between various RECs on the continent. This ranges from 60 percent of local content of total raw materials used for wholly produced goods originating from the ECOWAS region to 40% material content rule in COMESA to a more complex product specific low import and high valueadded requirements in SADC.

A CALL FOR ACTION

I strongly believe that the real issues for the Nigerian Economic Submit Group are not with the AfCFTA treaty but potentially its implementation. African countries need to; review and harmonise trade policies, identify areas of competitive advantage, build institutional capacity, address non-tariff barriers, develop safeguards, build roboust infrastructure and engage with stakeholders.

In conclusion, in order to make the Treaty work, Africa needs to learn from itself in terms of experiences from its existing RECs and also from the rest of the world. Eliminating tariffs is good but a larger impact on boosting trade requires the removal of nontariff barriers, reforms of services sector and improvement of trade facilitation measures.

THE BACKGROUND & OBJECTIVE OF AfCFTA

African Continental Free Trade Area (AfCFTA) is a flagship project of Agenda 2063 of the Africa Union- Africa’s own development vision. It was approved by the 18^th ordinary Session of Assembly of Heads of State and Government, held in Addis Ababa, Ethopia in January 2012 which adopted the decision to establish a Continental Free Trade Area. This initiative whose immediate implementation would impact socio-economic development, enhance confidence and the commitment of Africans as well as the owners and drivers of Agenda 2063.[1] The aspirations of Agenda 2063 for a continental market with the free movement of persons, capital, goods and services, which are crucial for deepening economic integration, socioeconomic development, gender equality and, more broadly, enhanced competitiveness and industrial development among African nations. This Article seeks to provide insights into various aspects of the AfCFTA’s development; The next steps required to make the Agreement fully operational;The various component parts that remain to be negotiated, and; The role lawyers will play in the process.

The African Continental Free Trade Area (AfCFTA) agreement will create the largest free trade area in the world measured by the number of countries participating. The impact connects 1.3 billion people across 55 countries with a combined gross domestic product (GDP) valued at US$3.4 trillion. It has the potential to lift 30 million people out of extreme poverty, but achieving its full potential will depend on putting in place significant policy reforms and trade facilitation measures. The African Continental Free Trade Agreement represents a major opportunity for countries to boost growth, reduce poverty, and broaden economic inclusion.

Implementing AfCFTA would  boost the incomes of nearly 68 million others who live on less than $5.50 a day; boost Africa’s income by $450 billion by 2035 (a gain of 7 percent) while adding $76 billion to the income of the rest of the world; increase Africa’s exports by $560 billion, mostly in manufacturing; spur larger wage gains for women (10.5 percent) than for men (9.9 percent), and ; boost wages for both skilled and unskilled workers—10.3 percent for unskilled workers, and   9.8 percent for skilled workers.

According to Article 3 of the African Continental Free Trade Area, the general objectives of the AfCFTA are to:

(a) create a single market for goods, services, facilitated by movement of persons in order to deepen the economic integration of the African continent and in accordance with the Pan African Vision of “An integrated, prosperous and peaceful Africa” enshrined in Agenda 2063;

(b) create a liberalised market for goods and services through successive rounds of negotiations;

(c) contribute to the movement of capital and natural persons and facilitate investments building on the initiatives and developments in the State Parties and RECs;

(d) lay the foundation for the establishment of a Continental Customs Union at a later stage;

 (e) promote and attain sustainable and inclusive socio-economic development, gender equality and structural transformation of the State Parties;

 (f) enhance the competitiveness of the economies of State Parties within the continent and the global market;

(g) promote industrial development through diversification and regional value chain development, agricultural development and food security; and

(h) resolve the challenges of multiple and overlapping memberships and expedite the regional and continental integration processes.[2]

STATUS OF RACTIFICATION BY EACH MEMBER STATE

The AfCFTA aims at accelerating intra-African trade and boosting Africa’s trading position in the global market by strengthening Africa’s common voice and policy space in global trade negotiations. As at 7th July 2021, 37 countries have deposited their instruments of ratification (ordered by date): Ghana, Kenya, Rwanda, Niger, Chad, Eswatini, Guinea, Côte d’Ivoire, Mali, Namibia, South Africa, Congo, Rep., Djibouti, Mauritania, Uganda, Senegal, Togo, Egypt, Ethiopia, Gambia, Sahrawi Arab Democratic Rep., Sierra Leone, Zimbabwe, Burkina Faso, São Tomé & Príncipe, Equatorial Guinea, Gabon, Mauritius, Central African Rep., Angola, Lesotho, Tunisia, Cameroon, Nigeria, Malawi, Zambia, and Algeria.[3]

Parliamentary/Cabinet approval has been received for Seychelles and Burundi. Somalia is pending.[4]

Implications of Ratifying & Domesticating a Treaty

Once a country signs a treaty, it is obliged under international law to refrain from any act which could defeat the object or purpose of the treaty until it formally revokes its signature. That a country is yet to domesticate a treaty into its local law does not shift its obligation with respect to the international framework.[5]

However, domestication of a treaty is particularly important because of the applicability of the provisions of the treaty in domestic courts. Furthermore, domesticating a treaty into local law makes provisions of such treaty justiciable in that jurisdiction. For instance, the African Charter which was domesticated by the first National Assembly of Nigeria in 1983 did not only make justiciable some provisions of Chapter II of the defunct 1979 Constitution that were hitherto non-justiciable, but also constitutes the legal basis for the enforcement of people’s rights in Nigerian court since neither the 1999 Constitution or any other law in force in Nigeria makes provision for the enforcement of people’s rights.[6]

Thus, in order for Nigerian courts to adjudicate over AfCFTA-related matters, the AfCFTA must be enacted into law by the National Assembly. This was iterated in the case of Abacha v. Fawehinmi (2000) 77 LCRN 1261 – 1262 where while interpreting section 12 of the Constitution, Nigeria’s Supreme Court echoed:[7]

“An international treaty entered into by the Government of Nigeria does not become binding until enacted into law by the National Assembly. An international treaty has no such force of law as to make its provisions justiciable in our courts.”[8]

POTENTIAL BENEFITS OF THE AGREEMENT UPON RACTIFICATION

The AfCFTA has the potential to put in place mechanisms to address many of the non-tariff challenges frustrating intra-African trade. It could do so in a manner which will provide more certainty and predictability and improve the trade facilitation environment. The potential dynamic benefits of the AfCFTA are particularly important. Larger integrated markets may well be more attractive to investors and along with new investment could come new technologies and learning that could boost productive capacity.

African countries that ratify the agreement consent to liberalize 90% of tariff lines. This means that countries will reduce, and ultimately eliminate, tariffs on 90% of products traded under the AfCFTA. Least Developed Countries (LDCs) are expected to accomplish this over a 10-year period, and non-LDCs over a five-year period. Sensitive products, of up to 7% of tariff lines, will be fully liberalized over 13 years for LDCs and 10 years for non-LDCs. Finally, 3% of tariff lines will be excluded from tariff liberalization.

STEPS REQUIRED TO MAKE THE AGREEMENT OPERATIONAL

There are five additional instruments that will support AfCFTA operationalization. These are:

(1) Rules of origin, which ensure that products traded within the market actually originate from within the continent and are therefore subject to tariff preferences;

(2) An online portal for tariff negotiations, which facilitates discussions between states, customs unions and regional groupings on tariff liberalization;

(3) An online mechanism for monitoring, reporting and elimination of non-tariff barriers (NTBs); (4) A pan-African payment and settlement system, which makes it possible for African companies to clear and settle intra-African trade transactions in their local currencies; and

(5) The African Trade Observatory, which will provide stakeholders up-to-date and reliable trade data, as well as information about exporters and importers in countries.

National and Regional strategies have been adopted by Member States’ to ensure the implementation of AfCFTA. The United Nations Economic Commission for Africa (ECA) is playing a key role in providing support to the AfCFTA process. ECA is collaborating with the African Union Commission (AUC) and various partners to advocate for AU Member States’ AfCFTA ratification and implementation, sensitization around the AfCFTA and technical support to the negotiations. The technical support includes help with the preparation of negotiating texts and liberalization modalities, and assistance in developing tariff offers for the East African Community (EAC) and Economic Community of Central African States.[9]

East African Community (ECA’s) technical support also extends to assistance in the preparation of national AfCFTA strategies. Forty-one countries, including 21 (twenty-one) LDCs and 4 (four) Regional Economic Communities (RECs), are at various stages in preparing these strategies, which identify strategic areas of national interest and relevant interventions to ensure that countries and regions fully participate and benefit from the agreement. So far, 11 (eleven) of the 41 (fourty-one) countries and RECs have validated AfCFTA implementation strategies. The strategies aim at complementing the broader development framework of each country or region, especially in relation to trade and industrialization policies. Some are already implementing their AfCFTA strategies and have a National Committee in place to ensure proper coordination of implementation, policy coherence and effective domestication of the agreement.[10]

In Côte d’Ivoire for example, the government has released the AfCFTA National Committee budget to implement priority actions of the AfCFTA national strategy, and in September 2020, its committee trained 200 owners and operators of SMEs in four cities on the use of the continental online tool for monitoring, reporting and elimination of NTBs. Togo held a training for customs authorities and affiliated institutions to improve their knowledge of the AfCFTA. Sierra Leone is developing an industrial policy and special economic zones policy to create a conducive environment for the industrial sector to grow and contribute to the diversification of the economy.[11]

In Nigeria, Mr. Francis Anatogu, Senior Special Adviser to the President on Public Sector Matters, said that the Nigerian Customs Service, NCS, is now working on the administrative protocols for the implementation of the AfCFTA. Anatogu who is also the Secretary of the National Action Committee, NAC, for Nigeria’s AfCFTA implementation, also said that efforts are ongoing in most of the 36 states of the country for the takeoff of Nigeria’s participation.[12]

The National Action Committee, NAC, according to him, has already embarked on states mobilization programme, which has covered four states, in a bid to ensure that all Nigerian businesses are sensitized and prepared to take advantage of the scheme.[13]

THE ROLE AFRICAN LAWYERS PLAY IN THE OPERATION AND IMPLEMENTATION OF THE AGREEMENT

African Lawyers need to be strategically poised for this next level of trade in Africa and will be crucial to the successful implementation of the Africa Continental Free Trade Area (AfCFTA) Agreement. We need to familiarise ourselves and be proactive with the global trade trends and debates. This will greatly contribute to the success and competence in trade law and business in Africa. Also, African lawyers must in addition, continue to engage in negotiation, join professional associations and advocate for policy reforms as this will greatly contribute to the ease of doing business not only in Africa but globally.

A doctoral student at University of Toronto, Canada, Mariam Momodu at an interview with Africa Legal contributed to the role of lawyers in the implementation of AfCFTA, she said;

“African Lawyers have an added responsibility to be proactive while advising their clients, in light of the AfCFTA.  A direct implication of the AfCFTA will be increased regulatory competition among African countries. It is only natural for investors and entrepreneurs alike to be more inclined to locate or operate their business in a country with a more favorable regulatory climate. This could be on tough trade decisions surrounding questions like, for instance, how can clients increase their share of regional and continental markets? What immediate strategic decisions do clients need to take to position themselves for cross-border growth? What legal impediments might they face? By thinking ahead of clients, lawyers are not only adding significant value but will also be catalysts for the private sector involvement that is required for the AfCFTA to succeed.”

In the vast majority of cases, the dispute will fall within the commercial contract between the transacting parties and where dispute arises African lawyers will come to play and lawyers will make use of an appropriate and modern dispute resolution mechanism that will support the growth of intra-African trade. African lawyers serve as key personnel in the African market space and actively explore their participation in intra-African trade in goods, services and investment, which will drive great success to the implementation of the AfCFTA.

The legal status of corporations or business entities trading or carrying on business across one or more African countries vary from the informal to the formal. These include family businesses micro, small and medium sized enterprises (MSME) that, constitute the vast majority of business entities, as well as large companies.[14] The ability to access such business support services require the role of lawyers in order to prevent disputes arising from commercial transaction.

Generally, disputes can arise between two or more private, commercial or business entities. It may also include a state or a state agency performing a commercial transaction and acting in a commercial capacity. The current framework for the resolution of such commercial disputes are through litigation before national courts (1), mediation (2) or arbitration (3). For completeness, investment disputes between African states and African investors may also arise under these transactions and these may be resolved through investment arbitration- In all these capacities African lawyers have roles to play.

1. Litigation

The 54 independent African countries all have a State sponsored judiciary with clearly defined court hierarchies. In the vast majority of African states, these court structures are contained in their written constitutions which also provide detailed appeal structures.[15] Citizens of African states generally have constitutionally protected rights of access to their national courts to pursue the vindication of their legal rights. However, the timeline for pursuing claims before the courts of most African states is notoriously long,[16] with most of the judicial systems dating back to the colonial period, and with very little modernisation having been made. This inefficiency in the court systems is balanced with low court fees (in comparison to court fees payable in developed jurisdictions) which supports access to the courts and litigation as the primary dispute resolution mechanism.

The current reality however, is that only 17 (seventeen)of the 54 (fifty-four) African states have harmonised their business laws with a supranational court as the final arbiter of disputes arising from the business laws. One practical way for litigants to ameliorate the impact of the differences mentioned above, on their cross-border transactions, is to refer to African lawyers. Such referral will add to their transactions cost and cost of dispute resolution. This will have a negative impact on MSMEs and operators in the informal sector who are the main drivers of intra-African trade in goods and services.

2. Mediation

The word, ‘mediation’ is used in a very broad sense to refer to all non-adjudicative alternative dispute resolution (ADR) processes. The basic idea behind all such processes is to empower the disputants to manage their dispute and its resolution either by themselves or with the intervention of a third party neutral. Such processes align well with traditional dispute resolution processes of various pre-colonial African communities. These traditional processes (which remain in use) are applied to resolve all types of disputes including, civil, family, communal and commercial disputes. With reference to the enforcement of decisions from such traditional dispute resolution processes, each community formulated its own enforcement measures.

It is the flexibility of the process that makes mediation attractive. Thus, mediation, an attractive tool which empowers the parties to find solutions to their disputes with the help of a third party neutral, is a developing system, which must be encouraged in the implementation of AfCFTA. Hence, African lawyers will be sort to resolve dispute arising from intra-African trade vide this mechanism.

3. Arbitration

Arbitration is an adjudicative dispute resolution process in which the parties give the control or power to determine their dispute to a neutral third party, the arbitral tribunal. The tribunal determines the dispute and the rights and obligations of the disputants. In arbitration, the parties need to persuade the arbitral tribunal of the validity of their claims. This is unlike in most mediation processes where the disputants communicate with each other, even when the communication is through a third party neutral. In this way, arbitration is likened to litigation before national courts, only private, and the arbitrator is likened to a private judge. In arbitration therefore, the disputants receive a final determination or decision by the arbitral tribunal over their dispute, just as they do in litigation. This gives some degree of certainty and finality.[17]

Nation states accord a certain status to arbitral awards and the vast majority of African jurisdictions, accord to arbitral awards the same status as a final judgment of their national (first instance) courts.[18] This status is priceless to arbitration as a private dispute resolution mechanism. It effectively means that the arbitration process covers the equivalent of the first instance court proceeding that would have had jurisdiction over the dispute, only better. The arbitral hearing process is better because the findings of the arbitral tribunal on the facts generally, cannot be reopened and the award can only be challenged on very limited grounds and not open to full blown appeal as the judgment of a national court.[19] In addition, there are currently 38 African states that are members of the New York Convention under which foreign arbitral awards can be enforced or challenged also on very limited grounds, in 159 jurisdictions globally.[20]

As already mentioned, arbitration is a recognised dispute resolution mechanism in practically all African states, particularly for the resolution of commercial or business disputes. In support of this process, all but one, of the states in Africa (South Sudan) have enacted into law, modern (and in some cases not so modern) arbitration legislations.[21] Though there is no continent-wide arbitration law,[22] there is a uniform arbitration law binding on the seventeen OHADA member states.[23] Some of these national legislations are currently under review while, in our view, a majority of the laws need to be reviewed to modernise their provisions so they remain fit for use by sophisticated commercial parties. Interestingly, 55% of the respondents to the 2018 SOAS Arbitration in Africa survey, believe their national arbitration laws are effective with 45% believing their national arbitration laws are not effective or need review.[24] Thus there is legislative framework for the operation of arbitration in almost all African countries evidencing the acceptance of the dispute resolution mechanism by African States.

In conclusion, African lawyers needs a supportive judiciary to thrive. African lawyers and judges, over the years, have started making the transition from aversion to support Intra-African trade. Such support must be sustained through the continued: training of judges and lawyers, engagement between the national and continental trade communities, and African judiciaries, publication of commercial-related judgements from African judiciaries, and increased expert support for African legislatures revising their trade laws.

OPPORTUNITIES AND BENEFITS FOR AFRICAN LAWYERS IN THE IMPLEMENTATION OF AfCFTA

The overall consensus of the panel in the East Africa International Arbitration Conference (EAIAC)’s AfCFTA: Implementation and Dispute Resolution webinar, was that significant gains can be made from the African Continental Free Trade Area (AfCFTA)’s promotion of intra-Africa trade, with strong potential to promote industrialisation. The panel spoke positively of AfCFTA’s impact on trade, with keynote speaker Professor David Luke, coordinator of the African Trade Policy Centre at the United Nations Economic Commission for Africa, saying its implementation is much needed to create a free trade-type environment in Africa.[25]

At the panel discussion it was agreed that there will be an array of opportunities for legal practitioners to advise on compliance and implementation of the terms of AfCFTA, and for advising on the utilisation of the Dispute Resolution Mechanism (DRM). Luke also noted the importance of the service protocol, which enables practitioners to provide legal services outside their borders, whether that be directly, via commercial presence, or by establishing firms through mergers and acquisitions. Also at this seminar, a Director at Kenyan law firm Anjarwalla & Khanna, Luisa Cetina, emphasised the myriad of opportunities the agreement has brought to the African legal sector, especially in dispute resolution. Government and state bodies, as well as private companies, will all be looking for legal representation and guidance in relation to AfCFTA’s implementation, compliance and disputes arising under the agreement, she said.[26]

Anjarwalla & Khanna also gave a highlight on the huge demand for international trade lawyers across the continent. If a customs union is eventually adopted, and the full liberalisation of trade in Africa reached under AfCFTA, a lawyer trained in one African country could cross the border to work in a neighbouring country, explained Cetina, another great opportunity for legal practitioners.[27]

Numerous opportunities exist for the international legal community especially because Ghana is hosting the Secretariat. These benefits may not only be enjoyed by lawyers but also legal academics and even law students, some of which include:[28]

Foreign Direct Investors

Ghana hosting the Secretariat projects the country as a peaceful and politically stable nation. This will attract more foreign investors who may choose to establish businesses in Ghana. Potential investors (clients) all over the world may contact lawyers in their respective countries to facilitate doing business in Ghana. These lawyers may further require assistance from Ghanaian lawyers to register these businesses and offer related services. These international legal liaisons are beneficial for the legal profession.[29]

Opportunities in Dispute Settlement

Disputes are bound to arise with such trade organisations. Under AfCFTA, a dispute settlement body (DSB) is expected to settle these disputes with the assistance of a Panel. The Panel has a right to seek information and technical advice from any source that it deems appropriate, seek information from any relevant source and consult experts to obtain their opinion on any matter. Lawyers, judges and legal academics worldwide who have the relevant expertise may be useful in this regard. The knowledge and experience gathered from settling disputes arising from trade organisations from other continents will serve as excellent precedents and have persuasive effect.[30]

Academic Collaborations and Research

The Secretariat is required to organise training workshops and seminars for staff and state parties to build the capacity required for the implementation of AfCFTA on the continent. This offers a great avenue for international trade law academics to serve as facilitators for such seminars and trainings. New academic areas of study relating to the AfCFTA may also be rolled out in the various law faculties globally which will require experts and academicians with the requisite experience to teach.[31]

International Law Experience and Exchange Programs

Hosting of the AfCFTA Secretariat in Ghana presents an opportunity for International Law students to visit Ghana to witness some of the international dispute settlement mechanisms and undertake internships with the Secretariat. The Secretariat is likely to hold most of the dispute settlement sessions which will afford law students and practitioners worldwide a learning opportunity in international trade law.[32]

Ghana hosting the Secretariat comes with certain benefits and good prospects for the international legal community. The AfCFTA Secretariat being hosted in Ghana is a step in the right direction and the international legal community should brace itself to take advantage of the opportunities it presents.[33]

Conclusion

I will conclude with the words ofGreg Falkof, Partner, Evershed Sutherland, London and Kunle Ajagbe, Partner, AIDAN, Lagos, Nigeria in their article- Nigeria’s lawyers run the rule over free trade deal .[34]

“Every specialist area of legal practice, from corporate finance and employment to litigation, intellectual property and environmental law will require a degree of harmonization across a range of different African jurisdictions to allow for truly freer trade. Though AfCFTA will have the benefit of the European Union example to follow, the road ahead is far from smooth. African Lawyers are expected to play key roles in designing and then implementing the new policies.”[35]

ENDNOTES

 [1] https://afcfta.au.int/en/about accessed 6th August 2021

[2] Article 3, African Continental Free Trade Area (AfCFTA) Agreement

[3] https://www.tralac.org/resources/infographic/13795-status-of-afcfta-ratification.html accessed 6th August 2021

[4] Ibid

[5] https://www.lexology.com/library/detail.aspx?g=bdf24d01-f933-4773-bfc0-edd0f91e3b97 accessed 6^th August, 2021

[6] Ibid

[7] Ibid

[8] Ibid

[9] https://trade4devnews.enhancedif.org/en/op-ed/implementing-afcfta-2021 accessed 6th August, 2021

[10] Ibid

[11] Ibid

[12] https://www.vanguardngr.com/2021/03/fg-steps-up-action-to-implement-afcfta-protocols/ accessed 6^th August 2021

[13] Ibid

[14] According to a 2016 study by McKinsey Global Institute, 56% of the largest companies in Africa are wholly owned by Africans and these operate in food and agricultural sector. State owned enterprises account for 17% of these companies and operate mainly in resources, utilities and transportation sectors. The remaining 27% are foreign-based multinational corporations. See: https://qz.com/782196/mckinseys-africa-2016-reporthighlights-africas-fast-growing-corporate-companies/ [last visited 6^th August, 2021].

[15] For some examples, see: Part VII of the 1999 Constitution of the Federal Republic of Nigeria (as amended); Chapter 11 of the 1992 Constitution of Ghana; Title VI of the 1990 Constitution of Benin Republic; Chapter 10 of the 2010 Constitution of Kenya; and Part 3 of Chapter 3 of the 2012 Constitution of Egypt

[16] One notable exception is Rwanda. According to the World Bank Ease of Doing Business Report, 2018, it takes 280 days from the filing of a dispute to the payment of the judgment sum. See: http://www.doingbusiness.org/data/exploreeconomies/rwanda#enforcing-contracts [last accessed 6^th August, 2021].

[17] Arbitration awards generally have res judicata effect but are still subject to enforcement and annulment proceedings, though on limited grounds. See for example, Nigel Blackaby and Constantine Partasides with Alan Redfern and Martin Hunter, Redfern and Hunter on International Arbitration, (6th ed., Oxford University Press, 2015) pp. 559-560

[18] For the position under the laws of various African states, see, John Miles, Tunde Fagbohunlu and Kamal Shah, Arbitration in Africa, a Review of Key Jurisdictions, (Sweet & Maxwell, 2016); and Lise Bosman (general editor) Arbitration in Africa: A Practitioner’s Guide, (Kluwer Law International, 2013).

[19] 1 National arbitration laws also set out the grounds for such challenge. See for example, arts. 34 and 36 of the UNCITRAL Model Law

[20] The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 1958 with text available at: https://uncitral.un.org/sites/uncitral.un.org/files/mediadocuments/uncitral/en/new-york-convention-e.pdf [last visited 6th August 2021].

[21] See Table 2 below for a list of these national arbitration laws.

[22] This is in the sense of a similar agreement to the European Convention on International Commercial Arbitration of 1961 available at: https://treaties.un.org/pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXII2&chapter=22&clang=_en [last visited 6^th August 2021].

[23] The Uniform Arbitration Act, 1999 was revised in November 2017 effective March 2018.

[24] SOAS Arbitration in Africa Survey at p. 32

[25] https://iclg.com/alb/15796-afcfta-a-window-of-opportunity accessed 6th August 2021

[26] Ibid

[27] Ibid

[28] https://www.lexology.com/library/detail.aspx?g=d3064b43-60e0-47e0-b38b-57935811f906 accessed 6^th August 2021

[29] Ibid

[30] Ibid

[31] Ibid

[32] Ibid

[33] Ibid

[34] https://iclg.com/alb/8500-nigeria-slawyers-run-the-rule-over-free-trade-deal accessed 6th August 2021.

[35] Ibid

INTRODUCTION

What is Evidence?

Black’s Law Dictionary defines “evidence” as something, including testimony, documents and tangible objects that tends to prove the existence or non- existence of an alleged fact.

This article seeks to examine the mode of admissibility of electronically generated evidence in Nigeria. 

Types of Evidence?

These classification according to legal writers and classification in compliance with the provisions of the Act. These are; Primary and Secondary Evidence, Direct or Testimonial Evidence, Circumstantial Evidence, Real Evidence, Documentary Evidence and Electronic Evidence.

What is Electronic and Digital Evidence?

In discussing electronically generated evidence, first, one must establish that the basis of admissibility of this type of evidence is contained in Sections 4-13 of the Evidence Act, 2011 which elaborate on details of fact, popularly referred to as “relevancy of facts”.

Prior to the Evidence Act 2011, the various laws on evidence from 1958 to 2011, were silent on the admissibility of electronic evidence. Admissibility of such evidence depended on fulfilling the requirements that governed the admissibility of documents generally.

Therefore, there is paucity of reported Nigerian cases touching on the admissibility of electronic evidence in the Nigerian legal proceedings.

A case had been decided by the Supreme Court on the admissibility of electronic evidence. That is the case of Dr Imoro Kubor v Hon. Seriake Henry Dickson 2013) 4 NWLR (Pt.1345), 534.

Also, Section 84 of the Evidence Act makes elaborate provisions for the admissibility of electronically generated evidence. From the wordings of section 84(1), it is clear that the admissibility of the computer generated evidence can only sail through only and if the conditions spelt out in section 84(2) of the Act is fulfilled.

The conditions referred to in subsection (i) of this section are;

a)  that the documents containing the statement was produced by a computer during a period over which the computer was used regularly to store or process information for the purpose of any activities regularly carried on over that period, whether for profit or not, by anybody, whether corporate or not, or by any individual;

b)   that over that period, there was regularly supplied to the computer in the ordinary course of those activities information of the kind contained in the statement or of the kind contained in the statement of the kind from which the information so contained is derived;

c)   that throughout the material part of that period, the computer was operating properly or if not, that in any respect in which it was not operating properly, or was out of operation, during that part of that period, was not such as to affect the production of the document or the accuracy of its contents and

d)  that the information contained in the statement reproduces or is derived from information supplied to the computer in the ordinary course of those activities.

What is Electronic-Signature and What Is the position of the law on E-signature?

An electronic signature is not defined in any Nigerian statute, but the U.S Electronic Signatures in Global and National Commerce Act, defines it as “ an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a person with the intent to sign a record.”

According to Section 17 of the Cybercrimes (Prohibition and Prevention etc) Act, 2015 provides that “ electronic signature in respect of purchases of goods, and any other transactions shall be binding.” Section 93(2) of the Evidence Act, 2011 acknowledges that an electronic signature satisfies the rule of law as to signature. The joint provision of these laws grants legitimacy to an online transaction that requires a signature and effectively made it binding on parties to it as well as satisfying the requirement of the law.

Section 93(3) of the Evidence Act, 2011 provides that “a signature may be proved in any manner, including by showing that a procedure existed by which it is necessary for a person, in order to proceed further with a transaction, to have executed a symbol or security procedure for the purpose of verifying that an electronic record is that of the person.” The provision covers the procedure for authentication, proving the execution and verifying the authenticity which is more apposite in the context of Digital Signature.

Digital/E-signature is binding in Nigeria and admissible in Nigerian Courts as long as the requirement of the law is satisfied. Section 84 of the Evidence Act, 2011 provides the procedure for tendering of electronic evidence.

What are the limits, burden and Opportunity of Electronic-Signature in Nigeria?

According to Section 93 of the Evidence Act 2011, electronic signatures are accepted as satisfactory evidence that a document was properly signed. This is further affirmed by section 17 (1) (a) of the Cybercrimes (Prohibition, Prevention, Etc) Act, 2015 (the Act) which provides that electronic signatures relating to purchase of goods and any other transactions are binding. Any other transactions would include transactions to provide services.

However, Section 17(2) (a)-(h) of the Cybercrimes Act provides certain transactions to be excluded from contractual transactions that are valid by virtue of electronic signatures, such as:

Creation and execution of wills, codicils, and or other testamentary documents; Death certificate; Birth Certificate; matters of family law such as marriage, divorce, adoption and other related issues; Issuance of court orders, notices, official court documents such as affidavit, pleadings, motions and other related judicial documents and instruments; Any cancellation or termination of utility services; and others listed in the Act.

Conclusion

The Supreme Court in the case of Esso West Africa Inc. V. T. Oyegbola (1969) NMLR 19, decided almost five decades ago said that “the law cannot be and is not ignorant of the modern business methods and must not shut its eyes to the mysteries of computer.”

Hence, the law cannot be blind to the reality of our daily living in modern life. The internet has reduced the traditional idea and necessitated the law to stay abreast and relevant. The use of digital/e-signature has no doubt ease doing of transactions and it is hoped the scope can be expanded to accommodate other transactions currently restricted under Section 17(2)(a) – (h) of the Cybercrimes Act, 2015. It is hoped that filing of court processes can be fully automated soon and even service of processes can be done in the same way to ease the stress of legal practitioners and everyone concerned.

It is pertinent to state that the Council of Legal Education and the National Universities Commission should find a way to introduce the teaching of electronic evidence in Nigerian universities as a core course; this should encourage or compel law students (as potential lawyers) to acquire knowledge of computers skills.

In conclusion, Electronic signatures can also provide a means of progressing transactions at this time as they are valid and enforceable. To prevent future disputes, contracting parties can amend existing contracts to include an addendum stating electronic signatures would be binding on the parties and where relevant, agree on procedures for confirming/authenticating electronic signatures. The addendum may also include a clause on sufficiency of documents signed in counterparts.

INTERNATIONAL TRADE AND BUSINESSES; AN INSIGHT INTO NIGERIAN REGULATORY FRAMEWORK

BY

PHILIPS ADEKEMI AND EDUN OLUWATIMILEHIN

1. INTRODUCTION

Globalization and the varying human and capital resources have greatly emphasized International trade as a great driver of economic growth and development and it is not hyperbolic to state that no country can survive without international trade. Nigeria is ranked as one of the African countries with the largest market for goods and services. It is estimated that over US$ 500 million worth of goods and services are produced in Nigeria. Hence, the impact of domestic and international trade on the Nigerian economy cannot be undermined. No doubt, here is a great connection between international trade and economic growth and development.

Economic growth is measured by the Gross Domestic Product in Nigeria. GDP[1] is the total monetary or market value of all the finished goods and services produced within a country in a specific period. It functions as a comprehensive measurement of the country’s economic health[2]. Nigeria has a GDP estimate of $410 million out of which the oil and gas sector accounts for 80 percent of this figure.[3]

This article seeks to examine the operation of trade and businesses in Nigeria vis a vis the regulatory framework.

1. CONCEPT OF A FREE TRADE ZONE

Free trade is an economic policy that allows countries to import and export goods without any tariff barriers. It is derived from the concept of free market idea in international trade. By producing goods the country has a comparative advantage, free trade allows for an increase in the export of goods and services of the producing country which in turn advance the economic growth of such country.

A Free Trade Zone or Foreign Trade Zone[4] is a special geographical area where goods and services are manufactured, imported, and re-exported under certain regulations and generally not subject to customs duty. Free Trade zones are usually situated around areas with geographic advantages for trade. The rationale for exempting businesses that operate in the free trade zone is to boost foreign direct investment, increase employment rate in the regions the FTZs are located and overall generate income for the country. Nigeria has two Free Trade Zones: the general and specialized free trade zones. The Oil and Gas Export Free Zone is the only specialized zone regulated by the Oil and Gas Free Zones Authority. The Nigeria Export Processing Zones Authority regulates the general free trade zones in Nigeria.

1. OPERATION OF FREE TRADE ZONES IN UAE

There are over thirty free zones operating in Dubai. A Free Zone Authority offers business licenses to foreign-owned businesses. Each free Zone is designed around one or more industry and only offers Licenses (for a Free Zone Enterprise (FZE), to Companies within those categories. The Free Zones in the UAE region have greatly improved the economic growth of the country as these free zones offer services in the trading, tourism, and industrial sectors. The Dubai Multi Commodities Centre is home to over 7,000 registered companies and actively employs over 1.2 million citizens. Also, the Dubai International Financial Centre contributes 35 percent to the rate of the Foreign Direct Investment of the country’s economy.  The Jebel Ali Free Zone under the management and supervision of the Jebel Ali Free Zone Authority contributes about 42% to the Foreign Direct Investment of the Company.

1. The Nigeria Export Processing Zones Authority

Is the regulatory body for the management of all Export Processing Zones in Nigeria. The body is responsible for promoting and facilitating local and international investments in Nigeria into licensed Export Processing Zones. Since its establishment, NEPZA has promulgated investment procedures, operational guidelines, and regulations for Export Processing Zones in Nigeria. The regulatory body has also encouraged private and public sector involvement in the operation and development of Export processing Zones. It is important to mention that trade activities permissible in the Export Processing Zones include:

• Manufacturing of goods for export,
• Warehousing, Freight forwarding and Customs Clearance
• Handling of duty-free goods, Banking, stock exchange and other financial services
• Insurance and re-insurance.
• International Commercial arbitration services.

• REGULATORY FRAMEWORK ON FREE TRADE AND COMPETITION IN NIGERIA

The outbreak of the novel Covid-19 pandemic has affected the eventual signing and commencement of the African Continental Free Trade Agreement (“AfCFTA or the Agreement”). It is in this vein that African Head of States have scheduled to consider January 1, 2021 as the new implementation date for the Agreement.[5]. Nigeria in the bid to create jobs and diversify her economy and increase foreign exchange has introduced several policies focused on empowering manufacturers in country and for the exploration of the various economic opportunities in the Nigerian market.

• Approval of Foreign Investments and Protection to business trade in Nigeria

The need for a centralized and coherent investment promotional effort in Nigeria led to the establishment of the Nigeria Investment Promotional Commission (“the Commission”) under the NIPC Act its functions include but not limited to coordination, administration of investments and provision of advice to the Federal Government (FG) on the general development of the Nigerian economy[6]. Section 19 and 20 of the NIPC Act mandates foreign investors intending to establish a business enterprise in Nigeria to incorporate or register the entity under the provisions of the Companies and Allied Matters Act (CAMA). While the NIPC Act does not set out the criteria a proposed foreign investment must satisfy before admission into Nigeria, it however ensures that an admitted foreign investor must be capable of meeting the developmental goals of Nigeria. Also, the Presidential Enabling Business Environment Council (PEBEC) was established to provide an action plan on the removal of all difficulties affecting the ease of doing business in Nigeria.

• Protection against Expropriation and Nationalization

Section 25 of the NIPC Act protects foreign investors and local investors from the risks of expropriation and nationalization. The law further states that in any event where the FGN expropriate or nationalize the asset of a foreign investor, such affected investor is entitled to compensation without any delay from the Federal Government of Nigeria. In addition, the Act [7] allows for easy repatriation in convertible currency of compensation. This clearly reveals the aim of the act which is to provide a great measure of assurance for investors.

• Protection against Currency Risk

The ability to repatriate convertible currency to meet obligations ranks top among several factors a foreign investor considers in reach a decision on the country to invest. .[8] By implication, it is guaranteed under the NIPC Act that the Nigerian government will not with the instrumentality of the law or any administrative Act prevent the transfer of proceeds of an investor’s investments.[9] While the section is silent as to the computation of time relating convertibility of fund out of the host state, the computation of a reasonable time is considered under the Multilateral Investment Guarantee Agency Convention (MIGA) which places an obligation on contracting parties to act within a reasonable time after the receipt of the investor’s application for a transfer[10].

• Effective Dispute Resolution

The medium of settling investment disputes under an investment code or treaty is as important as the protection of trade and investment in a country. Section 26 of the NIPC Act is instructive with regards to the mode of settlement of investment disputes in Nigeria. It states:

                (1)  Where a dispute arises between an investor and any Government of the Federation    in  respect of an enterprise, all efforts shall be made through mutual discussion to reach an  amicable settlement.

                (2)  Any dispute between an investor and any Government of the Federation in respect of an enterprise to which this Act applies which is not amicably settled through mutual discussions, may be submitted at the option of the aggrieved party to arbitration as  follows;

                (a)  In the case of a Nigerian investor, in accordance with the rules of procedure for  arbitration as specified in the Arbitration and Conciliation Act; or

                (b) In the case of a foreign investor, within the framework of any bilateral or  multilateral agreement on investment protection to which the Federal Government and the country of  which the investor is a national are parties; or

                (c)  In accordance with any other national or international machinery for the settlement of  investment disputes agreed on by the parties.

                (3) Where in respect of any dispute, there is disagreement between the investor and  the Federal Government as to the method of dispute settlement to be adopted, the  International Centre for Settlement of Investment Disputes Rules shall apply.

In view of the above, a framework on how disputes which arise out of trade agreements or FDI will be resolved will instill a level of confidence in the Nigerian market wherein an investor can settle any trade or commercial transaction related disputes In line with international best practices.

• INVESTMENT OPPORTUNITIES FOR MSMES IN NIGERIA UNDER THE AfCFTA

Nigeria is Africa’s largest market and a gateway to the African business hub with an increasing population of over 200 million, a consumer market of almost $500bn yearly, and a middle class of circa 29 million people. The commencement of AfCFTA is forecasted to boost intra-Africa trade through the creation of a single market of over 1.2 billion people and a cumulative GDP of over $3.4 trillion. Therefore, the impact of AfCFTA on MSMEs largely depends on the preparedness of various sectors of the economy.[11] AfCFTA, arguably the largest free trade agreement in the world is set to remove over ninety percent of tariffs on goods traded among member States. The agreement amongst other things allows a free flow of movement within the continent, thereby enabling the creation of a single market economy.

• How does MSMEs benefit from AfCFTA?

The focal point of the AfCFTA is the promise of a zero tariff for over ninety percent on goods traded between African States. The effect of this is that manufacturers or producers can increase their production rate as their goods can now be sold locally and generally to a larger African market. The removal of trade duties helps to reduce the production cost of several goods hence making them competitive across all markets. [12]

Creation of New Market

One of the major challenges faced by MSME operators in Nigeria is their inability to compete with foreign counterparts. This AfCFTA seeks to solve this challenge as Nigerian manufacturers will be able to export and explore the opportunities available within the markets in Africa to sell their goods. We believe that this will allow for a fair competition.

Attraction of foreign investments

The commencement of AfCFTA breaths a fresh air to the several factors that affect foreign investment in Nigeria. The agreement will allow investors to set up their manufacturing factories close to where raw materials are accessible and allow the importation of foreign currency by foreign investors.

Creation of Jobs

The commencement of AfCFTA will allow for easy movement across the borders of member States. By implication, it is projected that the increase in trade activities will require business hubs across board to seek the employments of talents from various parts of the continent and solidify its staff strength. This will in turn increase the creation of jobs and lower the unemployment rate in the signatory countries.

Increase Export activities

The commencement of AfCFTA seeks to ensure an increment in the export activities of primary producers in countries where raw materials are available in large quantities. The finance, logistics, real estate sectors are expected to witness a major boost in their business due to the increase in the demand of these services.

• Overview of Trade Competition in Nigeria

The Federal Competition and Consumer Protection Act regulate competition in the Nigerian trade sector. There are however specific sector legislations. The FCCPA establishes the Federal Competition and Consumer Commission and the FCCPT. The responsibilities of the FCCPC[13] AND FCCPT[14] include:

1. Adequate market regulation
2. Protection of businesses
3. Ensure the access of all citizens to safe products
4. Secure the protection of rights for all consumers in Nigeria
5. Promote fair and efficient competitive markets in the Nigerian economy.

It is believed that the FCCPA would help promote economic competitiveness in the country and strengthen the framework for encouraging and supporting small and medium scale businesses. The law seeks to give a breather of hope to consumer of various goods and services from unjust trade practices in the Nigerian sphere.

Application

The FCCPA applies to a body or corporate agency of the Federal Government or a body corporate or agency of a subdivision of the Federation, if such body corporate or agency engages in commercial activities, Federal, State and Local Government Agencies of Nigeria that engages in commercial activities and all commercial entities aimed at making profit and geared towards the satisfaction of demand from the public. The Commission also has the power to conduct investigations either on its own accord or at the request of any person or body corporate into a sector of the economy or into a particular type of agreement across various sectors especially where it appears that there are grounds for believing that a monopoly situation may exist in relations to the production, distribution or export of goods and services.

• Competition in the Nigerian Oil and Gas Sector

Nigeria is the tenth largest oil producer in the world and the third largest in Africa. Its economy is largely dependent upon its oil sector as it accounts for ninety-five percent of Nigeria’s foreign exchange earnings. A large percentage of the oil produced in Nigeria is produced through joint venture, hence the presence of International Oil Companies. The upstream and downstream sectors form a major viable component of the oil sector as it contributes over ninety percent of the exports of the country. The Nigerian Oil and Gas Industry Content Development Act (Local Content Act) is one of the principal legislations that regulate the exploration, distribution and marketing of oil and gas in Nigeria. The Act applies to all operations in the Nigerian oil and gas industry including Exploration and Production/Service Companies.

The Act seeks to promote indigenous participation in the oil and gas industry as Nigerian independent operators shall be given exclusive consideration in the award of oil blocks, oil field licences and in all projects for which contract is to be awarded in the oil and gas industry[15]. The Act establishes the Nigerian Content Development Monitoring Board; the Board is saddled with the responsibility of ensuring the continuous growth of Nigerian content in all oil and gas transactions and projects in the Nigerian Oil and Gas Industry. [16]

To a large extent, competition in the Nigerian Oil and Gas sector is regulated by the Local Content Act and the Federal Competition and Consumer Protection Act as well as other sector specific laws. While the Local Content Act seeks to promote indigenous participation in the oil and gas sector, in reality we see that the

sector is majorly dominated by foreigners and multinational companies as they possess the monetary and technical resources in exploring our major resource.

• Conclusion

Stakeholders have expressed their fears on the implementation of AfCFTA such as loss of job and the probability of dumping goods in the economies of member States. While these fears are quite genuine, they do not override the numerous benefits of the agreements. In addition, Trade Liberalization has over the years not proven counter-intuitive especially where there is an established regulatory framework.  Additionally, the commencement of the agreement will create jobs as many industries will expand businesses in other member States.  While the agreement is set to commence at a future date, Governments of member States should lend their support in ensuring the implementation of AfCFTA by taking proactive steps in ensuring that the economic space in their country allows the AfCFTA thrive.

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[1] Gross Domestic Product

[2] Investopedia.

[3] Data by Country economy.com

[4] As referred in other jurisdictions.

[5] https://iclg.com/alb/10078-nigeria-embraces-a-free-trade-future accessed on the 2/5/2020

[6]https://uk.practicallaw.thomsonreuters.com/w0164262?transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1

[7] Section 3 of the Nigeria Investment Protection Commission Act

[8] Section 24 of the Nigeria Investment Protection Commission Act.

[9] Section 24 of the NIPC Act and 15 of the Foreign Exchange Monitoring & Miscellaneous Provision Act (FEMMPA)

[10] https://connectnigeria.com/articles/2019/12/how-the-afcfta-will-impact-small-businesses-in-nigeria/amp/ accessed on the 3/5/2020.

[11] https://punchng.com/regulatory-framework-for-foreign-investment-in-nigeria/ accessed on the 4/5/2020.

[12] https://nairametrics.com/2019/07/08/how-afcfta-affects-your-business-benefits-and-disadvantages/ accessed on the 4/5/2020

[13] Federal Competition and Consumer Commission

[14] Federal Competition and Consumer Tribunal

[15] Section 3(1) of the Local Content Act

[16] Section 5 of the Local Content Act.