The NBA-SBL organised its 10th Annual Conference with the theme “Law Reform and Economic Development”. The event drew the attention of several top government officials, judges, lawyers and Industry leaders. Tobi Soniyi who attended the 10th Annual Business Law Conference of the Nigerian Bar Association Section on Business Law Reports.
The NBA SBL Conference presents a rare opportunity for lawyers engaged in corporate and commercial law practice to become abreast of emerging trends in the business world. It also provides a forum for interaction with top government officials and industry leaders.
The conference attracted some of the best authorities in corporate and commercial law practice. The resource persons were extremely qualified with intimidating credentials. It was definitely worth its registration fee.
The theme, Law Reform and Economic Development allowed regulators, lawyers and business executives engage in meaningful discourse on policies and regulations that shape economic growth.
In his welcome address, the Chairman of the SBL Conference Planning Committee Dr. Babatunde Ajibade, SAN set the tone for the conference when he asserted that: “There is no gainsaying the fact that these are tough economic times for the Nigerian nation and a time when all hands must be on deck if we are to turn our economy around.” He noted that Nigeria was paying the price for relying solely on oil revenues as a source of economic development. According to him, the fall in oil price has exposed the nation to the dangers of being solely dependent on oil and is forcing Nigeria to take the issue of diversification very serious.
This scenario, he said informed the decision to choose conference sessions that focussed on the key drivers of diversification and development of the economy.
Apart from focusing on how to diversify the economy, there were sessions that focussed on reforming the necessary laws to make it easier to do business in Nigeria.
SBL Chairman, Mr. Asue Ighodalo explained the choice of the conference theme thus: “We settled on this theme to re-emphasise that law reform begets rapid economic development, effective resource allocation, employment, attraction of appropriate investment, economic diversification and security.”
Reforming the laws and make them fit for purposes, he said, required a collective effort. “Archaic, restrictive and retrogressive laws must be repealed or appropriately reviewed to ensure an enabling business environment which supports sustainable economic development”, he added.
According to the NBA President, Augustine Alegeh, SAN, the conference could not have come at a better time than now when Nigeria is focusing on how to resuscitate several comatose sectors of the economy and diversify the economy.
The Vice President, Professor Yemi Osinbajo, SAN who delivered the keynote address and declared the conference open took advantage of the opportunity to warn that the passage of the Petroleum Industry Bill would not cure all the ills afflicting the oil sector. He stated that there were more pressing problems in the oil and gas industry.
While responding to Alegeh’s concern over the non-passage of the PIB by the National Assembly in the last 14 years, Osinbajo explained that the problems in the oil industry were not necessarily legislative issues but the nature and structure of the nation’s joint ventures as well as the fairness or otherwise of the agreements between the joint venture partners.
He stated that: “What seems to be the problem for us today, really is more of how our joint ventures are structured, especially our cash core deficit and how to address those cash core deficit.
“However you choose to write the PIB, it must still be the case that you must find a way of resolving questions around who pays for our own portion of the joint venture.
“Over time, we have somehow found a way of not paying, so there is a huge backlog.
“But aside that, there is a question around Production Sharing Contracts and whether those PSCs should be framed the way they are. And these are not necessarily legislative issues.
“They are more issues around agreements and how agreements are drawn up or and whether the agreements are fair or not fair.
“I think for us really, the major problems today revolve around the questions how the agreements we have entered into are wrongly entered; how those joint ventures are wrong; how those PSCs are wrong and what we need to be doing moving forward.
The Chief Justice of Nigeria, Justice Mahmud Mohammed, who was represented by another Justice of Nigeria, Justice Sylvester Ngwuta, mentioned that legal reforms must be set in motion to address the nation’s problems.
He called on lawyers to act as agents of changes and be ready to fulfil their calling in helping the nation to confront many of its current challenges.
The general consensus opinion is that some of the laws under which businesses operate are far from conducive. Many of our laws are not just archaic they also act as disincentives to economic growth.
At the session on “ Law Reform and Economic Development” participants agreed that there is a nexus between law reform and economic development and that Nigeria has failed to live up to the expectation of business in terms of law reform. While countries such as Great Britain keep on amending their laws to respond to necessity of modern businesses, Nigeria has retained old laws including some inherited from the colonialist. Chaired by Mr. Fola Adeola of Fate Foundation, those who attended the session benefited from the presentation of speakers such as Senator Oladipo Odujirin a Senior Partner at Odujirin and Adefulu, Mr. Kefas Magaji, the Acting Chairman of the Nigerian Law Reform Commission, Dr. Jumoke Oduwole, the Senior Special Assistant to the President on Industry, Trade and Investment, Office of the Vice President and Dr Gerald Tanyi, a Chief Counsel at the International Finance Corporation.
In his presentation, Tanyi stressed the need for a “deliberately crafted legal and institutional framework (including laws, regulations and policies) designed to jump-start economic development”. But with the benefit of hindsight he warned that a modern business legal framework would not be enough.
Senator Odujinrin identified the challenges in the law making process including the lack of communication between the executive and the legislative arms of government as well as a lack of consistency at the National Assembly. He suggested the establishment of a Federal Legislative Clearing House system.
Mr. Kefas stated that the law reform commission had indeed identified laws that should be amended or outrightly repealed but observed that the draft laws were not getting the desired attention.
The session on Managing Nigeria’s Economy-Is there a need for institutional reforms was chaired by Mr. Gbenga Oyebode, the Managing Partner of Aluko and Oyebode and had the Minister for Finance, Mrs. Kemi Adeosun as speaker. Members of the panellists include, Dr. Alex Otti, former Managing Director of Diamond Bank Plc, Mrs. Peju Adebanjo, Managing Director, Project Management, Lafarge Africa Plc, Dr. Doyin Salami of the Lagos Business School and Mr. Segun Ogunsanya, Managing Director, Bharti Airtel.
Otti argued that there was an urgent need to reduce the cost of governance he stated that a government of 109 Senators, 306 members of the House of Representatives, 774 Local Government Areas with council members and 980 State House of Assembly members of average 27 members per state, was not sustainable.
He also addressed the issue of the ease of doing business. Among 189 countries, Nigeria is ranked number 169.
Otti noted that: “Clearing goods at the sea ports in Nigeria takes 20 days, in Benin it takes 5 days while in Mauritius and Singapore it will take 2 days and one day respectively. In Botswana, it takes 7 hours.”
He also stated that the time and cost of starting and running a business in Nigeria remained discouragingly high. He cited the recurrent problems of multiple taxation, policy inconsistency and the slow judicial process. When the challenge of providing security is added to these, no one is left in doubt of the fact that despite its large population, Nigeria is not competitive when it comes to attracting businesses.
At a time when the Federal Government does not have enough resources to allocate to states, The Minister of Finance stated that most states of the federation lacked tax space for private investors, for them to generate reasonable Internally Generated Revenue (IGR), to fund the states.
She described how the states could generate more funds, rather than relying on the Federal Government for bail out funds.
While fielding questions during the session, Adeosun also pointed out that the Federal Government is adopting fiscal sustainability plan to resolve some of the outstanding salaries owed workers nationwide.
On why the government has not been partnering with Nigerians in diaspora, she stated that there should be a natural relationship with the Nigerians in diaspora and Nigerians at home, but added that government still has to improve the business environment, alongside its unwavering fight against corruption.
“It is Nigerian investors first that draw in foreign investors and diasporans, if we Nigerians cannot make ourselves invest, how can we bring in foreigners to invest in Nigeria?
On the policy framework being adopted by the present administration, she admitted that the government had not been good with communication, but that it was proactive towards diversification of the economy and fight against corruption.
The consensus at this session was that the Company and Allied Matters Act CAMA is no longer serving the needs of the business community. The session comprised of experienced people such as Professor G.A. Olawoyin, SAN who chaired it, Dr. Gbolahan Elias (Speaker) and Alex Mouka (Moderator). The panellists included Professor, Joseph Abugu of the Faculty of Law, University of Lagos, Mr Bello Mahmud, the Registrar General of the Corporate Affiars Commission and Ms Angela Omo-Dare, the Head, Country Legal Services at Stanbic IBTC holdings Plc
Elias identified many redundant provisions of the CAMA and suggested they be expunged. Interestingly, he received support from the Registrar-General of the Corporate Affairs Commission who stated that the CAC had also compiled areas that needed to be amended.
According to Elias, CAMA is now nearly 30 years old.
He noted that: “In some respects, it was already dated at the time it was passed. It was based on pre-1985 English Law.
“Since then, English Law has already enjoyed several sets of major reforms some of which include share buy back and financial assistance now being restricted to public companies.”
While supporting Elias’s position, the CAC Registrar General, Mahmud explained that: “The passage of time and development in both the Nigerian and global economies have made some of the provisions of the Act impracticable and inadequate to meet current challenges in companies’ administration and regulation.” All the participants agreed.
He proposed at least eighteen provisions of CAMA which he said would simplify business registration, regulation and administration in the country.
One of those areas is the provision requiring two or more people to form a private company. He suggested that this be amended to allow one person to form a private company. In his view, this “will encourage the migration of micros, small and medium enterprises from the informal sector to the formal sector so that they can be fully integrated into the economy.”
Mahmud also stated that this would reduce conflicts and wrangling amongst shareholders arising from distrust and mutual suspicion. He cited UK, Hong Kong, New Zealand and South Africa among jurisdiction that had adopted this option.
Professor Abugu could not understand why small companies should be burdened with filing annual returns. Others who spoke on the issue stated that it would be preferable for states to be given powers to register companies.
Hardly can any discussion about the Nigerian economy be concluded without reference to the oil and gas sector because of the role the sector plays in the development of the country. Former NBA President Olisa Agbakoba, SAN chaired the session while the Minister of State for Petroleum, Dr. Ibe Kachikwu was the speaker. The session was moderated by Mr Ola Alokolaro while panellists included Mr. Ken Etim, Managing Partner, Banwo and Ighodalo, Mr. O.A. Avuru, Chief Executive Officer, Seplat Petroleum Plc, Mr. Tunji Mayaki, Deputy Managing Director, Addax Petroleum Development (Nigeria,) Limited and Mr. Demola Adeyemi-Bero, Managing Director, First Exploration and Production Limited
Despite the gloomy outlook for the oil and gas industry, Kachikwu was optimistic that the future remained bright and had rewarding prospects. Nevertheless, he conceded that the environment remained challenging.
He listed some of the critical challenges facing the industry which include transparency, income leakages for government, policy somersaults and inconsistencies, global market uncertainties and loss of global market share.
The Minister reassured that this present administration would deepen transparency in the sector and appeal to stakeholders to give the government a chance.
Participants at the session made a case for the PIB to be passed into law to open up more opportunities.
The session discussed the weaknesses in the Arbitration and Conciliation Act as a vehicle for the resolution of commercial disputes. Former Attorney General of the Federation and Minister for Justice and an expert in arbitration, Chief Bayo Ojo, SAN chaired the session while another arbitrator, Mr. Yemi Candide-Johnson, SAN was the speaker. This session had Hon. Justice Peter Affen of the FCT High Court, Mr. Babatunde Fagbohunlu, SAN, Mrs. Doyin Rhodes-Vivour and Mr. Jerome Finns as panellists with Mr. Isaiah Bozimo as Moderator.
One of the critical sessions was devoted to exploring how Nigeria can improve its rank in World Bank’s rank of ease of doing business. As it is now, the country is not competitive at all.
Filippo Amato, Trade Counsellor, Head of the Trade Economic Section, European Union Delegation and ECOWAS stated that Nigeria had no choice but to improve its rank especially in the face of falling oil prices.
He explained that with Boko Haram still not entirely neutralised in the North East, the militancy in the Niger Delta and the menace of the Fulani herdsmen, the odds against Nigeria when investors are considering an investment destination are many. There are enough factors to discourage investors. It can only get worse when avoidable bureaucratic barriers are added to these.
He mentioned that: “At the EU Delegation, we often get enquiries from European companies about perception of the business environment: Are there clear, predictable and stable rules? Will contracts entered into be respected? In cases of disputes, can an effective legal redress be sought? Are there bottlenecks that will hinder access to capital or access to foreign exchange? Is security improving in the country? Those in authorities would be well advised to pay attention to these questions
Amato expressed delight at the fact that the incumbent administration had established a Presidential Commission on Ease of Doing Business, co-chaired by the Vice President and the Minister of Industry, Trade and Investment.
Amato further stated that: “However, when I heard about the commission, I wondered whether and how it will interact with the National Competitiveness Council of Nigeria, a public-private sector body established under the previous administration.”
He noted that Nigeria performed below Sub-Saharan Africa in all Doing Business indicators relating to trading across borders. According to him, no progress was recorded year-on- year.
“The large size of the Nigerian market, which should in principle be an advantage, may be one of the reasons why Nigeria has not made progress in this indicator. He stated insightfully
“Nigeria is too inward-looking. Since the Nigerian market is so large, there is a tendency to believe that, to build a successful business, it is sufficient to serve domestic demand and to be protected from competition, mostly coming from outside. But in a global world, this inward-looking and projectionist attitude can only produce inefficiencies and affect competitiveness.”
In this session on “Promoting Commercial Agriculture As An Imperative
-What is required to awaken this sleeping giant?”, which was chaired by the Minister for Agriculture, Chief Audu Ogbeh, factors that could help Nigeria transit from subsistence farming to commercial agriculture were considered.
An expert in land law, Professor Imran Oluwole Smith, SAN was the speaker while Mrs. Onyinkan Badejo-Okusanya moderated the session.
In his presentation, Mr Kenyon Dashiell, the Deputy Director -General, International Institute of Tropical Agriculture, Ibadan, noted that farming had been restricted to the rural poor who could not use their farmland to access loans. As a result of this, yields and income are very low while farming remained unattractive. More so, the country was unable to produce sufficient food while Nigerians developed an unseemingly unquenchable appetite for imported food.
To reverse this trend, he advised government to make; land acquisition and registration easy; Access to credit facilities possible; and create easy access to farming inputs among others.
If Nigeria is able to do this, he was confident that the country would be able to generate employment opportunities and become self sufficient in food production and may be able to export food.
Apart from agriculture, Nigeria is shifting its focus to solid minerals to diversify its economy. The session titled “Nigeria’s Solid Minerals As a Source of Economic Development-tapping a latent resource” dealt with the expectations that had been built up around Nigeria’s acclaimed rich endowment in solid minerals. The session was chaired by the Minister of Solid Minerals, Dr Kayode Fayemi while Mr. Supo Shasore, SAN was the speaker. This session was moderated by Mrs. May Agbamuche-Mbu and had Ms. Nere Teriba, Mr. David Ofosu-Dorte, Mr. Rasheed Olaoluwa and Mr. Dapo Akinosun as panellists.
Mr. Shasore noted that the reality of the recent trend of low oil prices and its impact on the revenue and foreign reserves of the country meant that it had never been more imperative for Nigeria to protect herself by diversifying her revenue streams.
However, developing the solid minerals sector would not be easy as the sector, he noted remained plagued with issues ranging from inadequate infrastructure to illegal artisanal mining and community challenges. Consequently, potential investors were deterred.
He came up with a time line for actions that must be taken if developing this critical sector must become a reality the first of which is to launch the roadmap and begin a communication campaign to generate industry buy in.
Without power, every developmental plan no matter how well drafted, will fall into pieces. The session on power titled –“When will the lights come on?” addressed issues surrounding the power sector. It is another critical area that has crippled businesses and stifled development. The session examined progress made so far in the sector through various reforms introduced by previous and present administration. Kaduna State Governor, Mallam Nasir el Rufai chaired the session while a former Minister for Power, Dr Lanre Babalola was the speaker. The session was moderated by the Mr Mohammed Mijindadi, the Managing Director of Gas Power Systems (Nigeria) GE.
The session titled the “Vision for Nigeria’s Infrastructure Development-What do we need to get there?” deliberated on the challenges faced by Nigeria and other developing African countries in bridging the infrastructure gap that presently existed in this part of the world.
In his remarks, Minister of Power, Works and Housing, Mr. Babatunde Raji Fashola blamed the poor state of infrastructure in Nigeria on the bad choices that the country made in the past.
These poor choices, according to him, manifested in the form of meagre budgetary allocations to the critical sectors of power, works and housing by past administrations as well as a non-release of funds even after budgets had been passed.
“We’ve been through a decade of daily production and sale of crude oil at $100 per barrel and all of us know some of the things that happened during that period. But what has changed? What has changed is that with a budget benchmark of $38 per barrel, this administration has budgeted more than N4 trillion; we have budgeted N6 trillion,” he noted.
“For me, it is a start, and it is an audacious start, the type that is needed in difficult economic times. It is reminiscent of what has been done all through history when economies were at difficult crossroads like this. It is reminiscent of the New Deal in America, it is reminiscent of the Marshall Plan in Europe, and it is also reminiscent of what China has done for a decade and a half to build its economy,” he added.
The Minister observed that apart from the size of the budget, what had happened also was that 30 percent of the 2016 budget has been dedicated to capital expenditure to finance infrastructure.
Not afraid to tackle critics, Fashola stated that people who asked why the country was going to borrow but at the same time asked for new roads were not being sincere.
“In the context that we are not earning enough money, we must borrow to finance infrastructure, it is a sensible investment, the amortisation period is longer,” he explained.
Fashola also drew a comparison between past budgetary allocations and this year’s allocation in order to highlight that things were changing for good.
“This year the Ministry of Power has N66 billion to spend to complete its transmission projects. In Works, for roads and infrastructure we now have N244 billion, and in Housing, we have N35 billion in the 2016 budget. So for those three ministries we have N345 billion to spend,” he said.
“So instead of N66 billion this year, Power had only N5 billion to spend in the 2015 budget for the whole of Nigeria. We know how much has been found in banks and under all sorts of places. That is why we don’t have infrastructure. It’s very simple, we just made poor choices. Works had N18 billion for all of Nigeria’s roads and bridges last year, whereas money was being hidden here and there. Those are the poor choices that we made.
“And of course for Housing, we had N1.8 billion to build houses for the whole of Nigeria. That gives a total of about N34 billion compared to about N345 billion that this administration is willing to commit,” he added.
The Minister stated that his meetings with contractors in Works and Housing preparatory to implementation of the 2016 budget revealed that they had not been paid for two to three years in spite of the budget, adding that what happened then was that after the budgets were made, cash was not released.
He added that all that was changing currently, contractors were being paid and they were returning to site, and even where they had not been paid, they were going back to work based on the integrity of the Buhari administration knowing that they would be paid.
It was not just work at the SBL Conference. As busy as these sessions were, the organisers managed to blend the sessions with opportunities to network. There was a cocktail party at Jabi Lake with the theme “African Night at the Lake”. Participants were also entertained at the end of the conference with Olamide, one of Nigeria’s popular contemporary artistes performing.
For those who missed the opportunity to attend this year’s conference, they will be well advised to start saving for the next conference.