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Nigerian Businesses Suffer Under Govt’s New Registration Policy

A system upgrade by the Corporate Affairs Commission (CAC) that has transferred business registration entirely online, has left businesses in the country stranded for months, unable to register and function properly.

The impact is huge for the country’s struggling small businesses, and Nigeria’s ease of doing business record.

The commission announced last December the upgrade of its online registration portal for businesses.

It said the upgrade would include features that allow the automation of key services and processes in line with the federal government’s effort to improve Nigeria’s ease of doing business.

But the exercise has instead slowed down registration for several months, leaving prospective registrants frustrated and causing a huge backlog of unattended cases.

Many business owners and lawyers who act as registration agents told PREMIUM TIMES applications they filed since 2020 were still pending at the commission.

Usually, the process of registering a business name may take one to two weeks, depending on the CAC workload and other factors, according to the commission. A registrant can do it themselves or engage an agent, usually a lawyer.

But since 2020, that process has lasted as long as six months in some cases.

A footwear entrepreneur, Johnpaul Okonkwo, based in Ekiti State, said his application for business name registration sent to the commission more than four months ago were still pending approval.

“I have been trying to log into the website to check if my registration has been done but the response I am getting from them is that the registration is under process,” he said.

“This has affected me in getting a name for my business. My initial plan was to get my registration done and also get a business account with it.

“Up till now, I can’t process the account without a business name.

“It’s a delay because I can’t do much with my business.”

An Aba-based fashion entrepreneur, Okezie Peters, shared a similar experience.

“Registering a business is very important when you want to do a serious business.

“But the way in which business registration in this country is done is unbearable and frustrating.

“It has been almost three months that I have been trying to register my business but everything proves abortive.

“I think the commission doesn’t want us to do business again in this country,” he said.

Ease of Doing Business

Nigeria ranked 169th out of 190 countries in the World Bank’s Ease of doing business in 2016, compared to 170th in 2015 and 147th in 2014.

In 2020, Nigeria moved 15 places up the ladder according to the World Bank’s EDB report to 131st from 146th position in 2019.

The Buhari administration has made efforts to improve the ease of doing business ranking in the country, and one area of attention has been the registration of businesses.

In 2016, President Muhammadu Buhari established the Presidential Enabling Business Environment Council (PEBEC), in line with the federal government’s economic recovery and growth plan (ERGP 2017-2020).

The plan targeted improving Nigeria’s ranking and pushing the country to be amongst the top 70 countries in the World Bank doing business index by 2023.

The PEBEC set an objective to make it possible to set up a business in 24 to 48 hours.

To achieve this, the following measures were enlisted: allowing online registration of businesses, online name searches, improving the reliability and user interface experience of the online portal, reducing the forms from seven to one and integrating the payment for stamp duties with the registration process.

Lawyers said the system upgrade by the CAC has become so frustrating, and it discourages business owners from applying for registration.

Arome Okwori, a Jos-based lawyer, said, “It’s been quite frustrating to be candid as it is now, most incorporation processes have stopped.

“You know because you don’t do anything physical they said it should be online.

“How do you do a post-incorporation process online?

“If you want to register a process and you go to the website, the website does not recognise you want to do post-incorporation,” Mr Okwori said.

Mr Okwori said not too long ago, he was to register a company and in the end, the company certificate came out without a registration number, which was “strange and it was so embarrassing.”

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“The client wanted the document so urgently he couldn’t get the document,” he said. “We have to start the process all over again.”

Mr Okwori noted that the delay in the business registration process has a huge implication for both entrepreneurs and lawyers.

“The implication is huge: loss of confidence by clients, loss of business for entrepreneurs and even the lawyers who are mainly into corporate companies. We sympathise with them because when there’s no work, no pay. This is the reality of the situation.

“Unlike before, if you have an issue there’s somebody you can call and approach but now you can’t access them. Who do you call?

“If you have a process online you have to just keep waiting until you get the response and it is very frustrating,” he said.

He urged the commission to do the right thing.

“I don’t know what is happening. Things are just not working the way they are supposed to work,” he said.

Another lawyer, Joseph Felix, said the ease of doing business was a mere “political statement.”

“Nothing like the ease of doing business; it’s just a political statement. How can you do an incorporation? They tell you the ease of doing business is one-stop but it takes like six months to get registration.

“And the client won’t understand that it will take you that long. There’s nothing like that,” he said.

“The experience has been very difficult. The waiting time is very outrageous because you don’t even get answers to your requests.

“Like in Jos here when you go to their zonal office they will just tell you to wait for a text message or email which may never come,” he added.

He noted that the consent for incorporation of trustees has become very frustrating.

“I had an experience in which I applied for consent to file corporate trustees but it took almost six months before I got a response that they have upgraded their systems and I needed to go back again and make another application.

He said the delay made it difficult for clients to trust lawyers. More importantly, the process has badly affected small businesses in the country.

“This is affecting the small scale businesses in the country because you can not access any facility without being registered and most of these SMEs funds need registration.

“And by the time the client wants to access these facilities and they tell them to bring their certificates may be within one or two months and they come to us to register them and it’s taken six months definitely, they will not get those facilities.

“So it is affecting the small scale businesses,” he said.

More lawyers speak

An Abuja-based lawyer, Damilola Olafusi, said “Doing business with CAC has been terrible, they are making business so difficult for me, they are making my clients even lose confidence in me, my ability to deliver.

“It has been terrible since last year. There are works that I started since last year and I’m yet to get approval for them. And then when those work don’t get approved, a client that will ordinarily refer you can’t bring a referral because you’ve not even delivered their job to them.

“Also, certainty in delivery time is difficult to give when a client brings a job.

“You can’t tell them the actual time that you will deliver because, a job that takes a week, two weeks now takes months to get delivered. It’s been terrible and then the fact that we don’t even have access to the commission any more, makes it even more difficult because you send complaints via emails and they don’t still respond,” she said.

She said previously when an application is queried, the CAC sends the reason for the query for the applicant to know how to resolve it. That hardly happens now.

“The portal upgrade they do or whatever they said they did has caused a lot of problems and issues for them because things were going on fine before now,” the lawyer said.

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“You will go into CAC and get your job done. Within five to 10 minutes you are out of there.

“At most an hour you will resolve whatever you want and you are out and lawyers didn’t have issues with that.

“But now, there is a particular work I have been doing, they queried the work almost 15 times and I keep resolving it but they don’t even attach the reason for the query.

“So how would the person identify what exactly they are trying to talk about?” she queried.

According to her, prompt and timely registration is essential if the government wants entrepreneurship to have a surge effect on the economy because every business ought to be legally registered for that to happen.

“Money inflow that is supposed to come is not coming in,” she said.

“With the system they are running now the economy will be affected because now, let’s not look at it from the registration aspect, companies are existing that are doing businesses with either foreign companies or bigger companies that pick contracts. There are requirements for picking contracts: filing annual returns, doing a lot of post-incorporation work.

“If those things are not complied with, you can’t get the contract, you can’t proceed with some filings,” she said.

She added that the inability of CAC to offer timely business registration has many implications for the country economy and won’t attract foreign investors if things continue the way it is now.

“The foreign investors that want to come and incorporate companies in Nigeria when they see all of this, it discourages them because they look at it like if to register or incorporate business takes a lot of such time, what will it now be like when running the business?

“Ordinarily, security is a major issue for foreign bodies, delegates or investors to come into the country and invest.

“Timeline for service delivery is another problem and then other agencies, all of the tax issues, the money you have to pay for a foreigner to just come and invest then, now CAC is bringing a lot of issues also.

“So all of that is discouraging enough.

“People that also partner with foreign bodies when they have to do some filings and then those filings are not done, it also makes the foreign companies look at it that these people are not competent enough,” she said.

She advised the CAC to bring back the old way of registration if the new way is not working.

Johnson Omede, an Abuja-based lawyer, said his experience with the commission was not different from what others narrated. He said while CAC’s aim was lofty, the system upgrade had achieved the opposite.

“The only challenge that we are having is that the changes are having a slow pace and the sooner they can address that the better for everybody,” he said.

“Truly for the time we have had these issues, it has affected the ease of doing business,” he said.

He urged the commission to fast-track the process of developing the website and releasing it for business.

“It’s highly welcome by every one of us. We will only encourage the registrar-general to fast-track the process so that all these delays we have will not be there,” he said.

CAC speaks

Duke Ukaga, the Director, Public Affairs, Corporate Affairs Commission, CAC, said, “Well, you know, we have a new system on the ground and with every new system there will be challenges and those challenges have been worked upon every single blessed day.

“And very soon it shall all be over and everything will be smooth sailing,” he said.

“And then also, don’t forget that this is COVID pandemic period. The workforce of the federal government has been reduced by up to 50 per cent.

“Even though CAC has tried to meet up that gap by some online services, that’s also a factor.

“In other words, as I said earlier at cservice@cac.gov.ng, just send in any complaint you have. You will get a response,” he added.

Source: Premiumtimes

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