MVNO License and the Business Opportunities Created in the Nigeria’s Telecommunication Sector

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The Nigerian Communication Commission (“NCC”) introduced MVNO License on August 11, 2022 to be called “MVNO License” thereby creating business opportunities to entrepreneurs willing to take advantage.

Valued Added Services (VAS) license is embedded in the MVNO License therefore MVNO can carry out Value Added Services that are not currently provided by the MNOs without procuring separate VAS License. However, the MVNO licenses are forbidden from distributing VAS content created and managed by other VAS providers.

The main target of this “NCC” initiative is to direct mobile network services to unserved and underserved areas (e.g. remote rural areas) and MVNOs initiatives has been identified to play an important role in connecting and bringing access to mobile services to these regions.

Before now, MVNO is an initiative already been use in the western world including Europe and United States of America to spread telecommunications services across nooks and crannies of their countries.

The full meaning of MVNO is “Mobile Virtual Network Operators License.

MVNO is a wireless communication service provider that resells mobile network services bought at wholesale prices from Mobile Network Operators (MNOs), such as 9mobile, Airtel, MTN and Glo, for discounted amounts and resells it to consumers (End Users) at reduced retail prices under its own business brand. However, MVNO lack the network and core infrastructure to deliver network services; therefore, MVNOs depend on the host MNO to provide this. Therefore, the MNVO depends largely on the infrastructure of a fully licensed mobile telecommunication service provider.

This initiative will also help MNOs optimize use of their network resources. Rather than taking a loss, the MNO makes a small profit by offloading capacity in bulk at wholesale prices.

In furtherance of this, the “NCC” issued the License Framework for the Establishment of Mobile Virtual Network Operators in Nigeria (“the License Framework”).

Some notable provisions of the License Framework are:

(1) First, there must be a contract agreement between the MVNO and the MNO on their own terms. The agreement can either be in the form of “Revenue Sharing Agreement’ or “Wholesale Agreement”

The Agreement must be filed with NCC before applying for the MVNO License.

(2) The License is available under 5-Tier Systems

TIER MVNO TYPE LICENSE FEES
Tier 1 *SVO 35M
Tier 2 *SFVO 60M
Tier 3 *CFVO 130M
Tier 4 Aggregator/Enabler 200M
Tier 5 *UVO 500M

*SVO = Service Virtual Operator
*SFVO = Simple Facilities Virtual Operator
*CFVO = Core Facilities Virtual Operator
*UVO = Unified Virtual Operator

The best MVNO type depends on the specific market needs, the strategic goals of the MVNO, and the nature of the agreement with the MNO.

Tier 1 or 2 license are more of a plug-and-play, but inherently more dependent on the MNOs and will need a solid voice to ensure good service from the MNOs network team. The lower-tiered MVNOs are more closely dependent on the MNO’s efficiencies than the higher-tiered MVNOs.

Aside from the licensing requirements, applicants are required to have one (1) unique technical partner and observe its Local Content Policy.

License tenure and payment plan
The MVNO License is valid for a period of ten (10) years with an option to renew the license for another 10 years.

Applicants for tier 1 – 4 licenses are required to pay 5% of the applicable license fee as non-refundable administrative charges, while tier 5 applicants are expected to pay Fifty Million Naira (N50,000,000.00).

Detailed Services under the Tiered System

The details level of services provided per each Tier are enumerated below:

TIER 1 SERVICES VIRTUAL OPERATOR (SVO)

▪ SVOs can offer services to customers without owning intelligent or switching network infrastructure.
▪ Host operators have the responsibility of providing wholesale capacity to the SVOs to provide their products and services. Thus, the host operator has a strong effect on the pricing of the SVO’s services.
▪ The VAS license is included in the SVO license; therefore, where an SVO provides VAS services, the conditions within the VAS license must also be complied with.
▪ The SVO can run its Short Message Service Centre (SMSC), which is a mobile phone network that handles text messages operations.
▪ The SVO licensee is in control of its brand, sales, distribution channels, device and phone sales and management, and customer relation platform.
▪ The tariff control here is very limited.

TIER 2 SIMPLE FACILITIES VIRTUAL OPERATOR (SFVO)

▪ The SFVO has more control over its value chain than the Tier 1 licensees and can distinguish itself from the host.
▪ The SFVO can set up its intelligent network but does not have core switching and interconnect abilities.
▪ In addition to the features from Tier 1, SFVO has the ability to own its Home Location Register (HLR), Equipment Identity Register (EIR), Authentication Centre (AUC), Home Subscriber Server (HSS), own more customers and own and issue its own SIM.
▪ SFVOs can have their own short codes for customer care services.
▪ In relation to inbound calls, SFVOs share revenue structure with their host operators.
▪ The SFVO can generate its revenue because of its ability to control its pricing and tariff structure.

TIER 3 CORE FACILITIES VIRTUAL OPERATOR (CFVO)

▪ In addition to the features from Tier 2, CFVOs can launch and operate a full core network with interconnect and switching capabilities, such as Mobile Switching Center (MSC), Gateway Mobile Switching Center (GMSC), Packet Data Network Gateway (PGW), Serving Gateway (SGW) and Mobility Management Entity (MME). However, for radio access, they rely on their host operators.
▪ Unlike SFVOs, CFVOs have full control over their tariff structure as they do not share revenue structure for inbound and outbound calls.
▪ The Commission urges CFVOs to target unserved and underserved areas and offers subsidised requirements for CFVOs who operate in these areas.

TIER 4 VIRTUAL AGGREGATOR /ENABLER

▪ The Virtual Aggregator/Enabler is a middleman between the Mobile Network Operators (MNOs) and the other Virtual Operators. The Virtual Aggregator/Enabler buys network services from MNOs in bulk and then resells to other Virtual Operators.

▪ The Virtual Aggregator generally known as Mobile Virtual Network Aggregator (MVNA) has the liberty to choose the value chain it wants to aggregate. Thus, it can aggregate Virtual Operators from Tier 2 if it controls its intelligent network and content delivery platforms but relies on the host operator to provide switching and interconnect purposes.

▪ The Enablers generally known as Mobile Virtual Network Enablers (MVNEs) provide the platform other Virtual Operators need for business and operations support systems processes which in turn gives the Virtual Operators the opportunity to center their attention on marketing, sales and distribution aspect of their business.

▪ In unserved and underserved areas, the Virtual Aggregators/ Enablers can perform the role of CFVOs.

TIER 5 UNIFIED VIRTUAL OPERATOR

▪ The Unified Virtual Operators (UVOs) can choose to operate at whichever tier and offer services at such level.


▪ UVOs can enter into a Shared Rural Coverage Agreement with a licensed spectrum owner to directly provide services for customers in unserved and underserved areas.

▪ They can offer all the services in Tiers 1 – 4

Becoming an MVNO
Becoming an MVNO is challenging, but with the right approach, it can be a profitable venture. To better your chances of launching a successful MVNO business, you should start with the following:

  • Conduct extensive market research to gauge demand and competition.
  • Craft a thorough business plan.
  • Familiarize yourself with regulatory requirements and obtain the necessary licenses.
  • Negotiate a wholesale agreement with an MNO for network access.

At present the applications for MVNO license has been suspended after initial deadline of 11 of October 2022. Futures lifting of the suspension is inevitable

`KEY EXTRACT FROM CAMA 2020

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S/NLaw SectionSummaryNarration
1Section 27Replacement of authorized share capital with minimum share capitalThe provisions of section 27 of the CAMA 2020 has replaced the mandatory requirement of authorized share capital under the CAMA 1990, with the requirement of minimum share capital for companies.
2Section 330Exemption from mandatory agreementexempt small companies from mandatory engagement of the service of a company secretary
3Section 266(1)Exemption from keeping minute booksBy the provisions of section 266 (1) of the CAMA 2020, companies with a single shareholder are exempted from keeping minute books of meetings.
4Section 421(1)Exemption from compliance with the statutory time of filing annual returns By the provisions of section 421 (1) of the CAMA 2020 , companies with single shareholder are exempted from compliance with the 42 days statutory period required for filing of annual returns after a company’s Annual General Meeting.
5Section 323-329Restriction on the use of protected information of DirectorsBy the provisions of sections 323-329 of the CAMA 2020, information of Directors which relate to their residential address is now treated as protected information and this information does not cease to be protected even after the Director leaves office. Disclosure of this information may however be permitted by the consent of the Director, by court order, or by the Commission to communicate with the Director.
6Section 271(1) Exemption from the minimum requirement of two DirectorsFormerly, under the CAMA 1990, all companies were mandatorily required to have at least two Directors and whenever the number of Directors falls below two, companies were required to appoint new Directors within one month. However, by the provision of section 271 (1) of the CAMA 2020, small companies are now exempted from the mandatory requirement of two Directors. This implies that small companies can now establish and carry on their business with the appointment of only one Director.
7Section 394Qualification
of a small
company.		A company is small if it is a private company with a revenue of not more than N120,000,000 or such amount to be determined by the Commission; its net assets are not more than N60,000,000 or such amount to be determined by the Commission; none of its members is a foreigner, government, government corporation or representative of a government; all the directors hold at least 51% of its equity share capital by the provision of section 22 (1) and (3) of the CAMA 2020. A private company is also, one in which its Memorandum of Association states to be a private company and its members do not exceed 50
8Section 101Introduction of electronic signatureUnder the second leg of the provision of section 101 of the CAMA 2020, documents requiring authentication by a company can be electronically signed by the designated/authorized officers of the company and the same will be accepted as satisfying the requirement for signing. This provision implies that documents need no longer be physically signed by authorized officers of a company but can be signed electronically from any part of the world by authorized officers who may not be physically present do so.
9Section 240E-meetings for private companies By the provisions of section 240, private companies do not need to hold their general meetings physically or in-person and at a specific location which must be in Nigeria. Small companies can now validly hold their meetings virtually from any part of the world and these meetings will be deemed as properly constituted.
10Section 237(1)Exemption from the mandatory annual general meeting of companiesFormerly, all companies were mandated by the CAMA 1990 to hold annual general meetings, however by the provisions of section 237 (1) of the 2020 Act, small companies and companies having a single shareholder are now exempted from holding the statutory annual general meetings.
11Section 849The merger of not-for-profit associations or charities By the provision of section 849 under Part F of the CAMA 2020 which deals with provisions relating to Incorporated Trustees, two or more associations with similar aims and objectives are now free to merge to achieve their combined aims and objectives. This will facilitate the emergence of bigger and stronger associations that can deliver on their combined objectives to achieve growth and maximize output, rather than having numerous smaller and weaker associations that struggle to meet their objectives.
12Section 3Companies limited by guaranteeNon-profit organisations seeking to establish companies limited by guarantee will still need to obtain the consent of the Attorney General of the Federation prior to registration at the CAC. If, however, all requisite documents have been submitted but the Attorney General does not grant his consent or communicate his refusal within 30 days, the promoters may place an advertisement in 3 national newspapers inviting the general public to make any objections to the incorporation of the company which will be considered the CAC. If the CAC is satisfied that the memorandum and articles of association of the company are compliant with the CAMA 2020, the CAC will advertise the application in 3 national newspapers, inviting objections from the public to the proposed incorporation. If no objections are received from the public within 28 days (or the CAC receives, considers, but rejects such objections), the CAC can assent to the application and register the company without the consent of the Attorney General.27 To reflect current economic realities, the minimum amount to be contributed to the assets of the company by its members in the event that the company is wound up, has been increased from NGN10,000 to NGN100,000
13Section 288Removal of a Director is now a basis for disqualificationCAMA 2020 retains the procedure for removal of directors outlined under the Repealed CAMA. A key change, however, is that directors who are suspended or removed in a general meeting of the company in accordance with section 288 of CAMA 2020, will be disqualified from being directors of other companies
14Section 119-120Persons with Significant ControlProvide that persons who hold significant control in any type of company are required to disclose particulars of such control to the relevant companies within seven days of acquiring such significant control. All affected companies must inform the Commission within one month of receipt of the information, disclose the information in their annual returns to the Commission and update their registers of members with the appropriate details.
15Section 98Company Seal optionalIt is no longer mandatory for a company to have a company seal and companies now have the sole discretion to choose whether or not to have one.
16Section 98Share certificateCAMA 2020 now provides that a share certificate may either be (a) issued under the company’s seal (where the company has a common seal or (b) signed as a deed by the company. 
17Section 402Exemption of companies that hasn’t carried out business since incorporationExempts small companies and companies that have not carried out business since incorporation (other than an insurance company or a bank or any other company as may be prescribed by the CAC) from the requirements of the law relating to the audit of accounts in respect of a financial year.
18Section 240 (2)General meetings for private companiesPrivate companies are now permitted to hold general meetings virtually. However, this amendment does not extend to public companies. Consequently, public companies are still required to hold general meetings, physically. 
19Section 839 (1), (5) and (7)Power to remove or suspend Trustee of an AssociationThough this power needs the blessing of the Minister of Trade
19Section 405Corporate
responsibility
for financial
reports		Certification of financial statements by CEO/CFO
20Section 257Disclosure
of
remuneration
of managers		The compensation of managers of a company shall be disclosed to members of the company at the annual general meeting
21Section 119-120Disclosure
of capacity
by
shareholder		Notification of person(s) with significant control and substantial shareholder
22Section 320Register of Directors’ Residential AddressesEvery company is required to keep a register of director’s residential address
23Section 772 & 807Filing of statement of accounts and solvency statement by a LLP & LPA Limited Liability Partnership (LLP) or Limited Partnership (LP) is required to prepare a statement of account and solvency within 6 months from its financial year end.
24Section 31,32Minimum share/authorized share captal of foreign companyCAMA does not exempt foreign companies from compliance with the minimum share capital/authorised share capital requirements mandated by some sectors prior to registration as well as the issuance of relevant operating permits/licenses. Consequently, there is a need for synergy and cooperation between the Act and other sectoral requirements.
25Section 848Filing of annual returns for Incorporated TrusteesThe financial year for Incorporated Trustees has been fixed at 1 January to 31 December. The Trustees are required to file a bi-annual return made up to a year to 30 June and 31 December each year, to be filed not later than 15 July and 15 January. In addition to the above, the Trustees are required to file an annual return (not earlier than 30 June or later than 31 December); the annual return must be accompanied by an audited statement of accounts. Since the financial year end is stipulated as 1 January -31 December, it appears that it is only the annual return for financial year 2020 that can be filed after June. For subsequent years, it would be impossible to file the annual return at any period before 31 December, as to do otherwise would mean that the return would not have considered a full financial year.
26Section 882Filing of financial statements by a Business nameA business name must file its annual return alongside the financial statements not later tthan 30 June every year
27Section 772(4),773 & 807LLP & LP to audit accountA limited liability partnership (LLP) or limited partnership (LP) is required to audit its accounts in accordance with rules prescribed by the Minister.The LLP/LPs must also file annual returns within 60 days after the financial year.
28Section 22Right of first offerSubject to the provisions of the articles of association of a Company, it is now prohibited for a member of a private Company to transfer shares in the said Company to a non-member, without first offering the said shares to existing members.Again, a Company cannot without the approval of all its shareholders, sell assets having a value of more than 50% of the total assets of the Company. Also, a shareholder or a group of shareholders, acting in concert, can not agree to sell more than 50% of the shares of the Company to a non-shareholder without such non-shareholder agreeing to buy the shares of the other existing shareholders on the same terms.
29Section 427Restrictions on distributable profitsRestricts the profits of a Company available for payment of dividends only to the company’s accumulated realized profits (so far as not previously utilized by distribution or capitalisation) less the Company’s accumulated, realized losses (so far as not previously written off in a lawfully made reduction or reoganisation of capital
30Section 394Requirements to be qualified as a small companyTurnover not more than N120million,Net assest of not more than N60million,No alien member,Directors hold 51% of the shares of the Company.
31Section 731 (2)Form of
register.
Company records can be maintained in electronic form
32Section 860(1)(2) Electronic
document		Certified true copies of electronically filed documents to be admissible in evidence as same will have equal validity as the original documents
33Section 127Procedure for Increasing Share Capital Pass a resolution approving the allotment of new shares to named persons, Notified CAC of the increase and allotment within 15 days of passing the resolution
34Section 400 Minister’s right to alter accounting requirementsThe Act gives the Minister of Industry, Trade and Investments (in collaboration with the Financial Reporting Council of Nigeria) liberty to modify the requirements or add to the classes of documents to be included in a company’s financial statements.
35Section 17Pre-action Notice and Restriction on Levy if executionProvides that a legal action cannot be commenced against CAC until the expiration of 30 days after a written notice of intention to commence legal action is served on the Commission by the intending Plaintiff or his agent.
36Section 824Classification of NGOs, Associations, and FoundationsA provision which empowers the CAC to determine the classification of Associations according to their aims and objectives
37Section 831Related AssociationsTo unilaterally merge two or more associations together whether for having same trustees or similar aims and objectives.
38Section 842Accounts of Dissolved Incorporated Trustees i.e. NGOs, Associations and FoundationsCAMA 2020 also gives CAC the power to deal with the bank accounts of NGOs, Associations and Foundations, where such account is dormant. Section 842 directs banks to notify the CAC of such dormant account irrespective of any duty of restriction on disclosure of information of the Bank. Furthermore, the Act provides that where the Commission receives a notice from the Bank, it may request the association to provide evidence of its activities and if the association fails to respond satisfactorily within 15 days, the Commission may dissolve the association and direct the bank to transfer the amount standing to the credit of the relevant association to such other association as may be specified by the Commission. For this purpose, an account is dormant if no transaction other than a transaction consisting of a payment into the account or a transaction initiated by the bank for a period of five years immediately preceding the date a report is made to CAC concerning the account.
39Section 849Merger of NGOs, Associations, and FoundationsProvides that two or more associations with similar aims and objectives may merge under terms and conditions that may be prescribed by CAC.
40Section 851Establishment of Administrative Proceedings CommitteeMandates CAC to establish an Administrative Proceedings Committee to be chaired by the Registrar General. The objectives of the Committee are to resolve disputes or grievances arising from the operation of the Act or its regulations, and to provide an opportunity of being heard for persons alleged to have contravened the provisions of the Act or its regulations and lastly to impose administrative penalties for contravention of the provisions of the Act or its regulations in the settlement of matters before it. Sanctions that may be imposed by the Administration Committee include penalties, suspension or revocation of registration, or recommendation for criminal prosecution. Furthermore, parties dissatisfied with the decisions of the Committee may appeal to the Federal High Court.

FINANCIAL PROTECTION FOR BUYERS OF GOODS OR SERVICES IN BUSINESS TRANSACTIONS IN THE EVENT OF PERFORMANCE FAILURE FROM THE SIDE OF SELLERS

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The best way to protect yourself as “project owners” is to demand for some “typical” Guarantee or Bond from potential service providers, contractors or vendors against the risk of non-performance or undue delay in project completion. These guarantees and bonds are purchased before contract is given to the SELLER.

The execution of GUARANTEES or BONDS creates three parties as follows:

Buyer = Project owners (Beneficiary)

Seller = Contractors, Vendors, Suppliers, exporter (Primary Obligor)

Surety/Guarantor = Bank or Insurance Companies

These “typical” Guarantees or Bonds are issued by the Surety/Guarantor at the request of the SELLER upon payment of Premium (%) of Contract Value.

The Project owners can demand for any of the financial guarantee and bonds listed below for their protection in case of delay or non-performance from service providers, contractors or vendors

(1) Bid or Tender Bond
(2) Performance Bond or Guarantee
(3) Advance Payment Bond or Guarantee
(4) Warrantee or Maintenance Bond
(5) Counter Guarantee

(1) BID OR TENDER BOND

This is an assurance to the BUYER that SELLER will not withdraw its bid before conclusion of the bidding process and that SELLER is financially Capable to undertake the project should it be awarded to them and that SELLER will be able to get a performance bond if chosen to do the job. These bonds are usually between a Premium of 2% and 5% of the total contract value. The Premiums may be lower for projects with higher values or SELLERS who have good credit scores.

If a bid or tender bond is in place however, in the event of the contractor falling through, the supplier would be awarded the value of the bond as a penalty against the contractor.

(2) PERFORMANCE BOND OR GUARANTEE
Issued to a Project owners as a condition precedent for execution of a Contract needed after successful acceptance of bid and may raise the need for Advance Payment Guarantee (APG)

This is an assurance to the BUYER should there be delay of failure to PERFORM, the SELLER will take over the responsibility to PERFORM by engaging another SELLER

Performance Bond value is usually a Premium of 10% of the Contract Sum (this is not sacrosanct and may vary in accordance with the Contract Particulars). The Premiums may be lower for projects with higher values or SELLERS who have good credit scores.

If it’s a Bond, the BUYER will demand for Financial Compensation from the Bank that issued the BOND irrespective of whether there is performance or not. If it’s a Guarantee, the BUYER will have to present a case of NON-PERFORMANCE before the Bank can pay,

In a standard BID Process where emphasis on Performance is made, Performance Bond will take-over from a Tender Bond where such exist. The Two cannot be in existent at same time.

A performance bond are introduced as security for job completion and is usually issued by thee bank or insurance company of the SELLER.

Perform = Satisfactory completion of a project

(3) ADVANCE PAYMENT BONDS OR GUARANTEE
Issued to a Project owners as a condition precedent to payment.

An assurance that the SELLER will refund any advance payments that have been made to the BUYER in the event that the product/project is unsatisfactory. APG enables the SELLER to recover Advance Payment already paid to BUYER in the event the SELLER is unable to perform or fulfill obligations under Contract

This will provide protection to the Buyer when an advance or progress payment is made to the Seller prior to completion of the contract

(4) WARRANTY OR MAINTENANCE BONDS
An assurance that SELLER will pay to the BUYER an amount of money in case the warranty obligations for products that are provided are not met. This means, the such payment received by BUYER will serve as a substitute for a filed warranty.

The bond is returned by the buyer at the end of the warranty period if the product that is provided has met the specifications.

(5) COUNTER GUARANTEE
This is similar to Performance Guarantee except that it is only needed when bidding for project in foreign countries In involve two banks: The local and foreign banks.
A cross country guarantee in the form of guarantee for guarantee given by another Bank

NOTE. A Bond can either be On-Demand or Conditioner

On-demand bonds :
Value set out in the bond is immediately paid on a demand

Conditional bond :
There is only liability if there is a breach of contract (or certain event has occurred as set out in the bond)

*Knowledge presented here are useful to The Procurement Unit of an organization or any individual assuming such role

THE NEW NIGERIA POLICE FORCE (NPF) DIGITAL CRM, ITS BENEFITS AND HOW TO APPLY?

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For over 60 years since the establishment of the Central Motor Registry by the Nigeria Police Force, the mandatory registration of vehicle information was done manually, and therefore prone to errors and integrity challenges.  

To address the rising sophistication of vehicular crime in the country, the Nigeria Police Force in April 2023, introduced the digitalized Central Motor Registry Information System  (e-CMR) for the seamless management of every motor vehicle and its ownership.  

The discontinuation of the manual processing and issuance of all CMR documents/certificates and migration to the digitalized NPF CMR portal consequently makes all other CMR certificates previously issued by the NPF invalid.  

On July 29, 2024 however, the Inspector-General of Police, IGP Kayode Adeolu Egbetokun, ordered the immediate suspension of the proposed enforcement of the e-CMR, initially scheduled to commence on July 29, 2024.  The suspension was aims to provide ample opportunity for mass enlightenment and education of all citizens and residents on the process, benefits, and effectiveness of the e-CMR in solving vehicle-related crimes and protecting individual and corporate vehicle ownership. 

Once the e-CRM becomes operational, as we still expect new take-off date, it will be valid and renewable every year. Click link below for contact details of E-CRM office per state:

https://cmris.npf.gov.ng/contact

BENEFITS OF THE DIGITAL CMR

(1) To make policing easier. For example “If your vehicle is registered with the NPF E-CMR and gets stolen, you can instantly flag it as stolen through your online profile.” The system then alerts all field officers nationwide within seconds, improving the chances of swift recovery.

(2) Eliminate the habit of police officers stopping to check papers as police officers are now equipped with cutting-edge tech to verify documents in real-time.

(3) Simplify vehicle-related services offered by the Nigeria police such as ownership transfers, license renewals, and updates to engine or chassis details.

(4) The comprehensive database of the e-CMR portal will serve as a deterrent to potential criminals who might use vehicles for illegal activities. The knowledge that the Police have access to accurate information can discourage criminal behaviour. 

(5)The digitalized CMR will also help to expedite investigations, particularly in cases of accidents or disputes involving motor vehicles, thereby providing quick resolution and reducing inconvenience for citizens. 

(6) The ability of the Force to maintain accurate vehicular information contributes to national security. It ensures that vehicles associated with criminal activities can be tracked 

REQUIREMENTS FOR E-CRM APPLICATION ON THE ONLINE PLATFORM DEDICATED FOR APPLICATION

(1) For individuals: National Identification Number (NIN).
Enter names as it appears on the NIN. Do not include titles like: Rev, Engr, Dr, Alh,Prof, Chief, Hon etc

(2) For corporate entity: Tax Identification Number (TIN) or Joint Tax Board TIN

(3) For corporate entities, CAC Registration number. Registration number should begin with RC or BN or IT as applicable.

(4) Email address, phone number, and house address. 

(5) Vehicle’s license number, plate number, chassis number, and engine number are required. 

(6) ATM card to make payments on the online application platform.  

(7) Information whether previous owner has CRM or not.

If YES, go ahead and create a profile for the vehicle and ask previous owner to to “ Initiate Change of Ownership” form their own profile

If NO, still go ahead and create a profile for the vehicle and follow up prompts to apply for CRM Certificate.

HOW TO APPLY FOR THE E-CRM CERTIFICATE

Application is done online and on Do-It-Yourself basis. It has 12 Steps as follows

Step 1:  
Visit the official website at https://cmris.npf.gov.ng  

Step 2:  
Click on Get Started  

Step 3: Create Profile
(if Profile has been created earlier, go to step 8) 

(a) Profile type – Personal or Organisation  

(b) Identification – NIN for Personal, TIN for Organisation  

(c) Enter your identification number  

(d) Click Verify  

Step 4:  
If identity is verified, click Continue  

Step 5: Confirm email and phone number  

If Email is no longer valid, select No and enter a valid email  

If the Phone Number is not current, select No and enter a current phone number  

Click Confirm to receive a token through the current phone number and valid email address  

Step 6:  
Enter the token and click Confirm Token, if confirmed, click Continue to proceed  

Step 7: Personal Information Page
(Review uploaded NIN/TIN information)  

Select the Current State of Residence and Current LGA of Residence  

Confirm if your NIN/TIN address is the same as your current address. If No, enter your Current Residential Address  

If you selected a wrong response, click on Change Selection to select the right response  

Create and confirm your password  

Click Next to proceed  

Step 8: Apply for CMR Motor Vehicle Information Certificate  

Log in using the following access credentials created during the Profile creation process; Username (Email or Phone Number), and Password (created in the fourth bullet point of Step 7) 

Click Login  

Step 9: Choose CMR Request  

(a) CMR Request – Select a Request  

(b) CMR Sub-Request – Select Sub-Request  

(c) Select Number of Requests:
(i) Single – for one motor vehicle
(ii) Fleet – for more than one motor vehicle in application  

Step 10: Vehicle Details  
Select Vehicle Category and Plate Number Type  

Enter Vehicle Details :
(i) State Licensing Officer (where the vehicle was registered/licensed)           

(ii) State Requesting Form (where the applicant is requesting CMR service)  

Step 11: Request Confirmation
(carefully review information for accuracy and genuineness in this stage) 

Click Proceed to view the invoice and make payment . Fees is expected to be N5,375 per vehicle per year.

Step 12: User Profile Features  

(a) Requests – View Request(s), Sold Vehicles, Print Certificate, etc.  

(b) Profile – Update/Edit Password, Email, Phone  

(c) Logout – Exit Portal

For enquiries, the following numbers can be called 09169895000 and 09169894000

SEE SAMPLE OF THE MOTOR VEHICLE INFORMATION CERTIFICATE

ESG Audit and Sustainability Assurance Services

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We present AP Professional Services perspective to ESG Audit and Sustainability Assurance practices.

In a constantly changing audit landscape, achieving efficiency, accuracy and consistency is necessary. One of the new and latest reporting needed to be integrated in an Audit Engagement is ESG Audit and Sustainability Assurance. ESG addresses organization’s responsibilities beyond taking care of their bottom line (Profits) and financial performance.

In the past, we have integrated Tax and Company Secretarial Audit into our audit process. Now it’s the time to integrate a fully ASSURANCE PROCESS into our Annual Audit plan.

ESG stands for Environmental, Social, and Governance. Another name for ESG is Corporate Social Responsibility (CSR). For illustration purposes, CSR is like what Management Accounts (Unaudited Financial Statements) or better still Trial Balance is to organizations while ESG is the AFS and Sustainability reporting is like the Audit Opinion.

Sustainability assurance refers to providing independent assurance or verification of an organization’s sustainability-related information, performance, or reporting. Sustainability Assurance is what Audit Opinion is in traditional audit.

Business leaders increasingly see sustainability as pivotal to risk management and value creation. In line with this trend, more and more companies are investing in third-party assurance for ESG and sustainability reporting to mitigate risk and bring valuable benefits.

It’s about assessing how your company’s operations impact the world and ensuring these actions are aligned with your values and the values of society at large.

There are some countries that are charged with Mandatory ESG Reporting. However, it can be adopted as voluntary obligations in countries where it is not mandatory. In those countries where ESG Reporting is mandatory, regulations are in place demanding certain companies to provide specific financial or non-financial data disclosures in their strategic report.

Some of Mandatory ESG Reporting areas are:

(1) Climate-related disclosures in financial reporting.  

(2) SEC demands from publicly traded companies to submit annual reports on human capital resources (HCR)

RELATED SERVICE PROVIDERS
ESG Assurance Providers
Sustainability Assurance Providers

NOTE: Experienced Chartered Accountants and Auditors are the best fit to perform ESG audit services as they have vast experience in determining whether a client is in compliance with multiple standards and frameworks.

What is ESG reporting?
ESG reporting is an organization’s public disclosure of its environmental, social, and corporate governance data in order to ensure transparency into the organization’s ESG activities and measure its sustainability performance so stakeholders, such as investors, consumers, and NGOs, can make better-informed decisions.

A comprehensive and continuous ESG auditing helps protect organizations from ESG-related risks. ESG audits is part of a Risk Management tools that helps organizations identify and assess their impact on the environment and society, and develop strategies for mitigating or otherwise addressing ESG risks. Also, ESG Audit is an essential source of information for investors, employees, and customers, who demand accurate information and transparency around how organizations approach ESG issues. ESG Audit allows companies and organizations to benefit from stakeholder confidence, regulatory compliance, and an enhanced reputation.

ESG Audit is needed where pressure on any of these ESG elements (Environmental, Societal and Governance) are identified:

(a) An organization is exposed to Environmental pressures. Example is the Climate Change impact, waste management challenges, hazardous materials handling, pollution impact and supply chain depletion (depletion in source of material supply).

(b) An organization is exposed to societal pressures as a result of relationships with Employees, Customers, Communities. Examples are procedures to adhere to Labor laws, procedures not to violate human rights, policies on child labor and work conditions, Data Protection and privacy risk and policy framework on DEI Issues (Diversity, equity, and inclusion)

(c) An organization is expected to abide and make disclosure regarding laid down code of conducts and sets of Corporate Governance rules and regulations

ESG REPORTING FORMAT (ESG FRAMEWORK) Four well-known ESG frameworks are:
(1) Sustainability Accounting Standards Board (SASB)✅

Presently, ISAE-3000 (revised) is an assurance standard by the International Auditing and Assurance Standards Board (IAASB) that deals with assurance engagements other than audits or reviews of historical financial information. ISAE3000 on provide guidance for ESG Audits.

ISAE stands for International Standards of Assurance Engagements. ISAE are issued by issued by the International Auditing and Assurance Standards Board (IAASB)

Newly, we are having ISSA5000 to replace ISAE3000 as one unified guidance for a standard Sustainability reporting and combined guidance for both ESG Audit and Sustainability Assurance.

ISSA stands for International Standards Sustainability Assurance. ISSA issued by the International Auditing and Assurance Standards Board (IAASB)

(2) Task Force on Climate-Related Financial Disclosures (TCFD)

(3) ISO Standards. International Organization for Standardization.

Some useful ISO standards that provide ESG audit frameworks include ISO 26000 (Social Responsibility), ISO 14001 (Environmental Management Systems), and ISO 45001 (Occupational Health and Safety)

(4) GRI: The most popular or well-known of these frameworks comes from the Global Reporting Initiative (GRI). This framework is focused on sustainability and impact reporting. 

NOTE: SASB offers sector-specific guidance while TCFD is more specifically geared towards climate issues. As some frameworks address a specific aspect of ESG, you may want to consider whether using or combining parts of multiple frameworks makes sense.

Any ESG reporting frameworks adopted will provide guidance to:
(a) Identify ESG topics or better still risk areas

(b) Provide criteria on how to structure and prepare information to disclose for each topic.

STEPS ON HOW TO CARRY OUT ESG AUDIT (HOW TO PERFORM ESG AUDIT)

(a) Data collection (Data Mining) from stakeholders in order to understand and identify specific ESG Risk Exposure. Automate this process for continuous auditing and evidence collection

ESG data refers to information related to a company’s environmental impact, social responsibility, and governance practices.

Types of ESG Data
The different types of ESG data can be broadly categorized into the following areas:

  • Environmental data: This includes data on a company’s energy usage, carbon emissions, water usage, and waste management practices
  • Social data: This includes data on a company’s labor practices, human rights policies, community engagement, and diversity and inclusion initiatives
  • Governance data: This includes data on a company’s board composition, executive pay, anti-corruption policies, and other metrics
  • Financial data: This includes the financial performance and stability of the company, which may be used alongside other ESG data to calculate intensity ratios and other ESG KPI

(b) Select an ESG framework that aligns with your organization’s goals.

(c) Set up ESG Goals and KPI per each ESG potential risk identified. This will be used to determine if Risk is POTENTIAL or not.

(d) Map out strategy to manage and mitigate against potential risks identified under c above

ESG AUDIT RISK
Companies that fail to manage or mitigate ESG risks face financial, reputational, and legal cos

♻BREAKING: CBN Releases Reversed Regulatory And Supervisory Guidelines For Bureau De Change Operations In Nigeria, Here Are Key Points :

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1.⁠ ⁠Bureaux de Change (BDCs) now have tiers: Tier 1 requires a minimum capital of N2bn (this is for a national license), while Tier 2 has a minimum capital requirement of N500m (these can only operate within one state and are allowed a maximum of 3 branches).

2.⁠ ⁠A shareholder cannot own more than one BDC, thus preventing people from holding more than one license.
3.⁠ ⁠BDCs can now serve as agents to disburse funds on behalf of International Money Transfer Operators (IMTOs). Only amounts less than $500 can be received in cash, while larger amounts should be deposited in bank accounts. For foreigners, a card will be issued. Essentially, BDCs will now be able to issue Naira cards.

4.⁠ ⁠BDCs can now issue PTAs and BTAs.

5.⁠ ⁠BDCs are going digital and will need to integrate the Central Bank of Nigeria (CBN) reporting platform for transaction and Anti-Money Laundering (AML) purposes. They will also integrate Federal Inland Revenue Service (FIRS) and Nigeria Inter-Bank Settlement System (NIBSS) for Bank Verification Number (BVN) verification, among other things.

6.⁠ ⁠As a Tier 1 BDC, you must have a minimum of 5 board members and a maximum of 9. Tier 2 should have 7 members. The draft guideline provides for gender equality, so a board cannot be constituted with only one gender. The CBN must now approve of directors serving on the board of a BDC and another regulated financial institution. New qualifications now require board members to have experience working in financial institutions. In particular, independent directors must have worked on the management team of a BDC.

7. Banks and Other Financial Institutions (OFIs) cannot hold Bureau De Change (BDC) licenses. It remains to be decided whether some of the permissible activities of BDCs under the draft regulation, such as the issuance of Business Travel Allowance (BTA) and Personal Travel Allowance (PTA), will be exclusively reserved for the BDC.

8. There is now a very extensive requirement for licensing. It’s a whole lot. It is very similar to what the CBN would demand from a finance company or bank, with increased scrutiny.

9. Unlike banks- BTA/PTA threshold they can sell is biannual – sell 4k to individuals and 5k to businesses cumulatively in a 6-month period

10. No more street trading.

The Central Bank of Nigeria (CBN) has introduced a foreign exchange (FX) Price Verification System (PVS) portal to ascertain quoted prices before Form Ms are approved.

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The pilot project was launched on 1st February.2022 following an awareness notice in a circular in the August 2020.

REGISTRATION
Suppliers and buyers of goods and services for Import/Export operations into or out of Nigeria are required to register on a dedicated electronic portal provided by the CBN and operated by its agent service providers as in the operational manual for Form M & Form NXP;

An annual subscription fee of $350.00 is charged for the authentication of suppliers on the TRMS system.

E- INVOICE AND E-EVALUATOR
The PVS is also referred to as E-invoice and E-evaluator initiatives because it requires submission of an electronic invoice (E-Invoice) authenticated by Authorized Dealer Banks (ADB) on the Nigerian Single Window Portal – Trade Monitoring System (TRMS). The e-Valuator and e-Invoice would replace the hard copy invoice and become a necessary supporting document for all import and export transactions.

HOW IT WORKS
The price verification report from the portal is now mandatory for all Form M requests, effective from August 31, 2023. The PVS will be a process to be completed before the Form M submission stage on the single window platform and on the Trade Monitoring System (TRMS)

The PVS mechanism will be guided by a benchmark price of goods and services in the market where the goods are traded, to ensure that the invoiced prices are based on spot market prices at the time of invoicing. It is hopeful that the PVS will help in safeguarding the scarce foreign exchange (forex) by ensuring that forex is allocated for eligible transactions.

Imports and exports with prices more than 2.5% of the verified prices will be queried and will not be approved for either Form M or Form NXP. The aim of this system is to achieve accurate value of import and export items in and out of Nigeria.

EXEMPTIONS
The following transactions are exempt from submitting PVS:

  • Individual invoice with values less than USD 10,000 or its equivalent in another currency. However, where the annual cumulative invoice value issued by a supplier/service provider is USD 500,000 or more, such a supplier would be required to submit e-invoices regardless of the individual invoice values.
  • Import or export transactions carried out by security agencies in the country.
  • Supplies to diplomatic and consular missions and supplies to international agencies dependent on the United Nations.
  • Donations made by foreign governments or international organisations to foundations, charities and recognised humanitarian agencies
  • Goods directly supplied by a foreign government

CBN will regularly update prices on the portal while the prices of every item will be reviewed at least quarterly and more frequently for goods with higher price fluctuations.

HOW TO SELECT THE MOST APPROPRIATE BUSINESS STRUCTURE TO REGISTER WITH THE CORPORATE AFFAIRS COMMISSION (CAC)

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The following are guidelines on which business structure will be suitable to register your business with.

(A) PROFIT MAKING STRUCTURES

  1. Business Name Registration as Sole Proprietorship

  • Participant is one and is called Sole Proprietor;
  • Liability of participant is unlimited (This means Decision Maker will avoid taking risk and thereby limit it’s commitments and business growth);
  • Decision Maker = One Participant (The Sole Proprietor);
  • Not useful for SEC listing (Shares is not involved, therefore no trading on stock exchange);
  • The Business is not a separate entity from Participants (This means its not legal for the business to enter into a contract with third parties);
  • Tax of the business are treated along side taxes of individual participants. That is, The income of the business is not taxable;
  • Fund contribution (in-kind or in-cash) by participants is not mandatory;
  • Number of participants involved: Minimum = 1, Maximum= 1;
  • Constitution is not involved and not mandatory for registration.

2. Business Name Registration as Partnership (General Partnership)

  • Participants are called Partners or Proprietors;
  • Liability of participants are unlimited (This means Decision Makers will avoid taking risk and thereby limit their commitments and business growth);
  • Decision Maker = Collective Participants (Partners/Proprietors). All Participants are involved in Decision Making process;
  • Not useful for SEC listing (shares is not involve, thus no trading on stock exchange);
  • The Business is not a separate entity from Participants (This means its not legal for the business to enter into a contract with third parties);
  • Tax of the business are treated along side taxes of individual participants. That is, The income of the partnership as a business is not taxable;
  • Fund contribution (in-ind or in-cash) by Participants is not mandatory;
  • Number of participants involved: Minimum =2, Maximum= 20;
  • Constitution is not involved and not mandatory for registration.

3. Limited Partnership (LP)

  • Participants are called Partners;
  • Liability of participants is a Mix of limited liability (participants to provide fund but no technical know-how) and unlimited liability participants (participants with technical know-how but has no fund);
  • Decision Maker = Collective Participants (Board of Partners). It can be few selected Participants or All participants depending on what is included in the constitution;
  • Not useful for SEC listing (No shares for trading on stock exchange);
  • The Business is not a separate entity from it’s participants (This means its not legal for the business to enter into a contract with third parties);
  • Tax of the business are treated along side the taxes of individual participants. That is, The income of the partnership as a business is not taxable;
  • Fund contribution (in-kind or in-cash) by few participants is mandatory;
  • Number of participants involved: Minimum =2, Maximum= 20;
  • Constitution is involved in the form of Partnership Agreement and mandatory for business registration.

4. Limited Liability Partnership (LLP)

  • Participants are called Partners;
  • Liability of participants are limited;
  • Decision Maker = Collective Participants (Board of Partners). It can be few selected Participants or All participants depending on what is included in the constitution;
  • Not useful for SEC listing (No shares for trading on stock exchange);
  • The Business is a separate entity from Participants (This means it can enter into contract with third parties);
  • Tax of the business are treated along side taxes of individual participants. That is, The income of the partnership as a business is not taxable;
  • Fund contribution (in-kind or in-cash) by participants is not mandatory;
  • Number of participants involved: Minimum =2, Maximum= Unlimited;
  • Constitution is involved in the form of Partnership Agreement and mandatory requirement for business registration.

5. Private Limited Liability Company (Ltd or Limited)

  • Participants are called Shareholders;
  • Liability of participants are limited (This means Decision Makers will always thrive to take calculated business risk needed for business growth);
  • Decision Maker = Usually Collective Participants (Board of Directors). However, One Participant Decision Maker (One Man Business) is possible;
  • Not useful for SEC listing (No shares for trading on stock exchange, however second tier market on the stock exchange might be available as option);
  • Business is regulated beyond CAMA. and ISA (Investment & Security Act) Laws are to be complied with
  • The Business is a separate entity from Participants (This means it can enter into contract with third parties);
  • Tax of the business are treated separate from taxes of individual participants. That is, The income of the company is taxable;
  • Fund contribution (in-kind or in-cash) by participants is mandatory in the form of shares;
  • Number of participants involved: Minimum =2, Maximum= 50;
  • Constitution is involved in the form of Memorandum and Article of Association and mandatory requirement for business registration.
  • Private limited liability companies are not mandated to publish their financial information for public consumption but are obligated to present to Tax authorities and related regulators.

6. Public Limited Liability Company (PLC)

  • Participants are called Shareholders;
  • Liability of participants are limited (This means Decision Makers will always thrive to take calculated business risk needed for business growth);
  • Decision Maker = Collective Participants (Board of Directors);
  • Useful for SEC listing (shares are involved and can be traded on the floor of the stock exchange);
  • The Business is a separate entity from participants (This means it can enter into contract with third parties);
  • Tax of the business are treated separate from taxes of individual participants. That is, The income of the company is taxable;
  • Fund contribution (in-kind or in-cash) by participants is mandatory in the form of shares;
  • Number of participants involved: Minimum =2, Maximum= Unlimited;
  • Constitution is involved in the form of Memorandum and Article of Association and mandatory requirements for Business registration.
  • Public limited liability companies are mandated to publish their financial information for public consumption, Tax authorities consumption and other related regulators.

7. Unlimited Liability Company (ULC)

  • Participants are called Shareholders;
  • Liability of participants are unlimited (This means Decision Makers will avoid taking risk and there by limit their commitments and business growth);
  • Decision Maker = Usually Collective Participants (Board of Directors). However, One Participant Decision Maker (One Man Business) is possible;
  • Not useful for SEC listing (No shares for trading on stock exchange, however second tier market on the stock exchange might be available as option);
  • The Business is a separate entity from Participants (this means it can enter into contract with third party);
  • Tax of the business are treated along side the taxes of individual participants. That is, The income of the company is not taxable.
  • Fund contribution (in-kind or in-cash) by participants is not mandatory;
  • Number of participants involved: Minimum =1, Maximum= 50
  • Constitution is involved in the form of Memorandum Only. Article of Association is not mandatory for registration.
  • Unlimited liability companies are not mandated to publish their financial information for public consumption and Tax authorities consumption
  • Unlimited liability companies are usually use as against Private limited company because the owners wish to keep information that could be valuable to competitors, such as turnover and the amounts paid in dividends, out of the public eye. Also, Amounts contributed by shareholders can be refunded to them.
  • Unlimited liability company is like a company version of Business Name Registration (either as Sole Proprietor or as Partnership). They can be registered with or without shares capital. They can also be registered as private or public company.

(B) NOT FOR PROFIT

  1. Incorporated Trustees
  2. Company Limited by Guarantee

1. Incorporated Trustees

  • Participants are called Trustees
  • Decision Maker = Collective Participants (Board of Trustees)
  • Minimum participants = 2, Maximum = Unlimited
  • Constitution is involved in the form of By-Laws and mandatory requirement for registration purpose

2. Company Limited by Guarantee (Ltd/Gte)

  • Participants are called Guarantor or simply put, Members
  • Decision Maker = Collective Participants (Board of Directors)
  • Minimum participant = 1, Maximum Participant = Unlimited
  • There is no Shareholders
  • Constitution is involved in the form of Memorandum and Article of Association and mandatory requirement for registration purpose

TEN (10) CRITERIA TO USE IN DETERMINING A SUITABLE BUSINESS STRUCTURE FOR YOUR BUSINESS

(a) is the business for Profit motive?

  • If the answer is YES, then it’s for Profit motives, then only business structures listed under category A above will be suitable for your business
  • If the answer is NO, it’s mean the business is not for Profit Motives, then either Incorporated Trustees or Company limited by Guarantee will be considered for use

What will then determine which one to use between incorporated Trustees and Company Limited by Guarantee will depend on the following understanding:

  • (i) A company limited by guarantee is allowed to venture into business or profit making agenda but cannot share the profit among members; but Incorporated Trustees are not allowed to venture into profit making business.
  • (ii) Willingness to make publication in newspapers before registration? Company by Limited by Guarantee does not require public awareness before registration while it is a requirement for incorporated trustees to carry the public along.

*IF THE ANSWERS TO THE ABOVE IS “NO” (THAT IS, NOT FOR PROFIT MOTIVE), THERE IS NO NEED TO CONSIDER OTHER CRITERIA BELOW. THE REMAINING CRITERIA BELOW FROM (b) to (j) ARE RESERVED FOR BUSINESSES WITH PROFIT MOTIVES

(b) Liability of participants to be limited?

  • If YES, it means, participants will sell their property to settle any debt that the business cannot be settled.

(c) Needed for listing on Stock Exchange?

  • If YES, it means more compliance burden as more professional will be employed to keep to the rules of SEC. This will make cost of running expensive.

(d) Business is a separate entity from individual participants?

  • If YES, It means the Business can do any PUBLIC BID. They can tender for any Government Bid. Other business structure can only do Professional Service related public bids.

(e) Tax of business is treated separately from that of individual participants?

  • If YES, it means more tax obligations. Engagement of Tax consultant, Auditors is a must and their fees will make cost of running the business to more expensive

(f) Fund contribution by Participants is mandatory?

  • If YES, it means, financial commitments determine your rights to some benefits in the business. In also implies that Investors can be attracted. NOTE: If share capital will be involved, it simply means fund raising is involved and therefore YES will be an answer.

(g) Want decision making process to be fast?

  • If YES, it means a business structure with ONE participant will be appropriate. Two Participants too can make fast decisions but not as fast with ONE participant.
  • If NO, it means business structures with Collective Body Decision Maker will be suitable.

(h) Any requirement of the Law, CAC, Professional and regulatory bodies on the appropriate structure penciled down to carry on a trade or profession?

  • For example, Corporate Affairs Commission (CAC) has mandated that all Schools are to be registered as Limited Liability Companies, Accounting and Legal practice are not to be carried out as Limited liability Companies, Banks, Insurance companies and other related financial institutions are to be carried out as Limited Liability Company.
  • In some cases with Limited Liability Company , it is regulated with Minimum Share Capital to be in issued and be fully paid otherwise no business operations.

(i) Will there be need for a constitution that will guide business operations?

  • If YES, it means a lot of paperwork and timing will be involved in the registration process thereby making it a complex process as against simplicity
  • If NO, it means lesser timing and paperwork and more simple to register.
NOTE: Constitutions takes the form of Bye-laws, Partnership Agreement, Shareholders Agreement and Memorandum and Article of Association (MEMART)

(j) Which of the following will be the numbers of participants that will be involved (To Achieve Perpetual Succession) ?

1 (one)
Greater than 1 (one) but limited
Unlimited
NOTE: Perpetual Succession cannot be achieved with single participant
  • If the answer is Greater than 1 (one) but limited, it means Business name registered as Sole Proprietor, Business name registered as Partnership (General Partnership), Private Limited Liability Company, Public limited Liability Company, Limited Liability Partnership, Limited Partnership are all available for use.
  • If the answer is 1, it means Public Limited Liability Company and Limited Liability Partnership ( LLP) cannot be used
  • If the answer is Unlimited, it means only Public Limited Liability Company and Limited Liability Partnership can be used.

Feel free to ask us anything about Corporate Affairs Commission and your business formation in Nigeria.

NATIONWIDE BROADCAST BY PRESIDENT BOLA TINUBU TO NIGERIANS ON CURRENT ECONOMIC CHALLENGES AND PALLIATIVE MEASURES WITHOUT DWELLING INTO ECONOMIC JARGONS AND CONCEPTS BUT RATHER IN CLEAR PLAIN LANGUAGE – JULY 31, 2023

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President Tinubu’s Palliative measures centers around

(1) Financial assistance to businesses
(2) Food Security agenda
(3) Transportation
(4) Minimum wages

Going by the president’s speech, it suggest that the idea to give ₦8,000 per month for a period of six months to low-income earning household has been jettisoned. Probably replaced with FOOD SECURITY AGENDA. This was assumed since it was not mentioned in the nationwide address.

Find details of ALL the Palliatives proposed measures below:

FINANCIAL ASSISTANCE

MANUFACTURING BUSINESSES
Between Jul 2023 and Mar 2024 to 75 manufacturing enterprises will have access to N1Billion Loan at 9% per annum with a maximum of 60 months repayment for long term loan and 12 months for working capital in order to enhance their production capacity and in turn create good-paying jobs.

NON-MANUFACTURING BUSINESSES
Micro, Small, and Medium-sized Enterprises (MSME) will have ₦125bn funds to access.

  • INFORMAL SECTOR:
    • Out of the ₦125bn, ₦50bn will be available as Conditional Grant to 1 million Nano businesses between now and Mar 2024.
    • That is, ₦50,000 conditional grant each will be given to 1,300 Nano Business owners in each 774 LGAs.
  • FORMAL SECTOR:
    • The remaining ₦75bn (out of the ₦125bn) will be available to fund 100,000 MSME and startups. Each enterprise to get between ₦500K to ₦1m at 9% interest p.a. and a repayment period of 36 months.

FOOD SECURITY AGENDA

Multi-stakeholder engagement with various farmers’ associations and operators within the agricultural value chain that will ensure staple foods are available and affordable by embarking on the following plans:

(1) to support cultivation of 500,000 hectares of farmland and all-year-round farming practice remains on course.

(2) ₦200bn of the ₦500bn approved by the National Assembly will be disbursed as follows: 

  • ₦50bn each will be invested to cultivate 150,000 hectares of rice and maize.
  • ₦50bn each will be invested to cultivate 100,000 hectares of wheat & cassava.

(3) to release 200,000 MT of grains from to households across 36 States and FCT free of charge.

(4) to provide 225,000 MT of fertilizer, seedlings and other inputs to farmers who are committed to the food security agenda above

TRANSPORTATION

Provision to invest ₦100bn between now and Mar 2024 by acquiring 3,000 units of 20-seater buses in order to roll out buses across the states and local governments for mass transit at a much more affordable rate

These buses will be shared to major transportation companies in the states and the companies will be able to access loan under this facility at 9% per annum with 60 months repayment period in order to fund its repayment of the buses.

MINIMUM WAGE

“I want to tell our workers this: your salary review is coming.”

Already working in collaboration with the Labour unions to introduce a new national minimum wage for workers.

Budget provision will be made for the immediate implementation of the new minimum wage once it is agree and determine.

OTHER COMMITMENTS
(1) To fulfill the promise to make education more affordable to all and provide loans to higher education students who may need them.

(2) Currently monitoring the effects of the exchange rate and inflation on gasoline prices. To intervene If and when necessary.

FINANCIAL PROTECTION TO SELLERS OF GOODS OR SERVICES IN BUSINESS TRANSACTIONS IN THE EVENT OF DELAYED PAYMENT FROM THE SIDE OF BUYERS

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The best way to protect yourself as service providers, contractors or vendors against the risk of failure to receive payment upon delivery is to demand for some “Typical” Guarantee or Bond from BUYER. These guarantees and bonds are to be procured before delivery is made to the BUYER.
The execution of GUARANTEES or BONDS creates three parties as follows:

Buyer = Project owners (Primary Obligor)

Seller = Contractors, Vendors, Suppliers, exporter (Beneficiary)

Surety/Guarantor = Bank or Insurance Companies

These ”typical” Guarantees or Bonds are issued by the Surety/Guarantor at the request of the BUYER upon payment of Premium (%) of Contract Value.

The SELLER can demand for any of the financial guarantee and bonds listed below for protection the protection of their payment

(1) Deferred Payment Guarantee

(2) Letter of Credit (Inland or Foreign)

(3) Post Dated Cheques

(1) DEFEERED PAYMENT GUARANTEE

This is an assurance to the SELLER that BUYER will pay for goods supplied on a specific date. That is, BUYER will commit to a specific period in which all outstanding payment will be paid to beneficiary.

The maximum credit days (the specific date to pay) in DPG should be maintained at 90days

The seller offers credit to the buyer and buyer’s bank guarantees the due payments to the seller.

Perform = Payment

The Guarantee is issued by the Bank or Insurance company at request of BUYER in favour of SELLER

(2) LETTER OF CREDIT (LC)
Letter of Credit is a promise or commitment in writing made by a bank to a particular seller that payment will be made to the seller if the seller completes performing whatever is mentioned in the letter of credit. Payment here is not trigger by SPECIFIC DATE, payment is trigger once DELIVERY is made to BUYER. Letter of Credit is only used in foreign transactions. The type of Letter of Credit used for domestic transaction is called INLAND LC

LC is a form of Guarantee and is issued by the Bank or Insurance company at request of BUYER (local or foreign) in favour of SELLER

(3) POST DATED CHEQUES
Postdated cheque is one that is written with a future date indicated on it. This is usually done to account for an anticipated delay in deposit.

In Nigeria, like any ordinary cheques, post-dated cheques have a validity of 3 months from the date of issuance.

Post Dated Cheque is not a Guarantee issued by the Bank or Insurance company but rather an understanding between BUYER and SELLER to take advantage of illegal issuance of Post-Dated cheque without sufficient funds as a form of Guarantee for payment

*Knowledge shared here are for Sales and Marketing team of an organization or any individual assuming such a roles.