In the last few years, the Nigerian Financial Technology (FinTech) space has witnessed exponential growth and has attracted both local and international investors. Nigeria is home to some unicorns especially in the payments segments of the financial services sector. Like in most jurisdictions, the regulators appear to be playing ‘catch up’ with FinTechs and it has been said that there appears to be an over regulation of FinTechs in Nigeria.

FinTechs in Nigeria are regulated by a number of regulators through laws, guidelines and regulations. While there appears to be concerns that FinTechs are overregulated in Nigeria in view of the series of regulations that mandatorily apply to their operations, there is also the view that the idea of overregulating FinTechs is a myth.

The article discusses the regulation of FinTechs in Nigeria in order to explore whether the concerns relating to the overregulation of FinTechs in Nigeria is a myth or reality.

The Reality of Overregulation of FinTechs in Nigeria

The main regulators regulating FinTechs in Nigeria include the Central Bank of Nigeria (CBN), the Nigerian Securities and Exchange Commission (SEC), Nigerian Deposit Insurance Commission (NDIC), the Nigeria Data Protection Commission (NDPC), Federal Competition and Consumer Protection Commission, etc.

These regulators have taken a robust approach to regulating the business activities and operations of FinTechs in many areas including licensing, consumer protection, data protection, risk management, technical requirements, etc.

These regulatory activities have prompted the discussion about the possibility of overregulation of FinTechs in Nigeria especially as sometimes there are conflicting signals coming out from different regulatory agencies. Some of these issues include the following:

1. Rigid Licensing Regime: Mandatory registration and licensing obligations are imposed on FinTechs before the commencement of any business operations in Nigeria by both the Central Bank of Nigeria and SEC.

There are mandatory, regulatory and documentary requirements for these registrations and licensing which are usually rigid and strict and may vary depending on the product offerings, business activities or nature of the FinTech company. These requirements are sometimes said to be very rigid and there are hardly any flexibilities or discretions on the part on the regulators.

2. Overlapping Regulatory Oversight: FinTechs in Nigeria are regulated by multiplicity of agencies. This multiple regulatory oversight creates a complex and confusing regulatory and compliance environment.

For instance, a digital money lending company licensed by the CBN and required to comply with the consumer protection framework of the CBN may also be required to comply with FCCPC’s regulations requiring registration with the FCCPC.

These two requirements are not the same and usually lead to overlapping and sometimes conflicting regulatory requirements.

In the past, the CBN had restricted banks from opening and operating bank accounts for digital/virtual assets companies despite the fact that SEC recognizes cryptocurrencies as digital assets and issued clear guidelines which regulate the operation of cryptocurrency and virtual asset companies in Nigeria.

The new Investment and Securities Act, 2025 somewhat seeks to address some of these conflicting positions. The jury is however still out on how the regulators would enforce the provisions of the new law.

3. Compliance with Established Minimum Standards: Minimum standards are prescribed and mandatorily required for equipment and technologies to be deployed in the provision of financial services by FinTechs in Nigeria.

For instance, the CBN provided the minimum standards for the equipment, applications and processing systems required for the provision of contactless payment through the Guidelines for Contactless Payments in Nigeria, 2023.

Thus, the systems to be deployed for contactless payments must comply with Advanced Encryption Standards, Payment Application Data Security Standard, ISO27001 – Information Security Management System, etc. for the operation of any contactless payment in Nigeria.

4. Prior Approval: There are a number of instances where CBN would require prior approval before certain actions could be undertaken by a FinTech company.

One of such instances is the requirements for potential operators in the FinTech space to obtain CBN’s prior approval in the form of Approval-in-Principle (AIP) before its promoters could apply to the Corporate Affairs Commission (CAC) for the incorporation of their companies. The CAC on the other hand will not usually require for Approval-in-Principle before it incorporates a FinTech company.

However, a promoter who incorporates a FinTech company before applying to the CBN for AIP could face regulatory challenges in obtaining the license as the CBN regulations with respect to these FinTech licenses are clear – do not incorporate before applying for AIP.

CBN also requires operators in the financial services sector to obtain prior approval and ensure that individuals to be employed are not blacklisted for employment in the sector.

With the bureaucracy in the CBN, it usually takes weeks or even months before these approvals could be obtained which can delay the commencement of business operations of the FinTech companies.

5. Stringent Capital Requirements: The capital requirements for various FinTech licenses from the CBN have been criticized and said to be very burdensome especially for start-ups.

These capital requirements have been said to make the provision of financial services unnecessarily expensive. For examples, the capital requirement for Payment Solution Service (PSS) license is 250 million Naira, Mobile Money Operators (MMO) license is 2 billion Naira, etc. these are expensive and not affordable for many potential players in the FinTech space.

These enormous capital requirements will inevitably stifle innovation and hinder financial inclusion. In 2018, the CBN increased the capital thresholds for Microfinance Banks (MFBs) from 100 million Naira to 1 billion Naira for state MFBs, and from 2 billion Naira to 5 billion Naira for national MFBs thereby causing many FinTechs to go out of business as they simply could not meet the new capital requirements.

6. Frequent Regulatory Changes and Issuance of New Regulations: The Nigerian FinTech regulatory environment is constantly evolving and this is closely marked by regulators issuing frequent amendments to guidelines and regulations. In some circumstances, guidelines and regulations are superseded with the issuance of new ones that introduce additional onerous compliance obligations, revised licensing fees, etc.

These frequent changes create regulatory compliance burden on FinTechs, requiring them to ensure that their processes, systems and operations comply with the latest regulations or amendments. For instance, the CBN issued a circular on 6 May 2024 requiring all financial institutions to reconfigure their systems for the purpose of deducting cybersecurity levy within a stipulated period.

However, barely two weeks after the CBN directive, the CBN circular requiring financial institutions to reconfigure their systems for the cybersecurity levy deductions was withdrawn by the CBN. Many financial institutions would have incurred cost as a result of taking steps to comply with the circular failing which they may be sanctioned by the CBN.

7. Compliance Costs: The many regulations hurdle that FinTechs are required to comply with, are quite expensive thereby leading to increased and expensive compliance costs. Many startup FinTechs struggle to absorb these costs. These enormous compliance costs together with operational costs create regulatory and operational burden for many FinTechs which if not managed properly, could prevent them from upscaling and ultimately may lead to their demise.

Overregulation as a Myth in Nigeria

Despite the various issues which show that FinTechs appear to be overregulated in Nigeria, there are various reasons why it is arguable that the nature of regulations of FinTechs is very necessary.

1. Consumer Protection: The regulation of FinTechs in Nigeria is necessary for the purpose of ensuring consumer protection. Many regulations put in place by the regulators such as customer due diligence requirements, FCCPC’s registration requirement, data compliance, etc. are designed to safeguard consumers in areas such as fraud, predatory lending practices and financial crimes, breach of data, etc.

The FCCPC’s registration requirement for digital money lenders was put in place to protect consumers from exploitative practices such as breach of data privacy, threats and intimidating tactics for loan recovery, etc.

Without FinTech regulations, consumers may be subject to arbitrary charges, data breaches and delayed or lack of resolution of legitimate complaints, etc.

The capital requirements and the strict licensing regime put in place by the CBN also ensure that only promoters that are financially capable are admitted into the Nigerian FinTech ecosystem. In doing so, the CBN ensures that consumers’ funds are protected while in the custody of licensed FinTech operators.

The SEC also requires the registration of players in the Nigerian capital market to enable it bring the players within its regulatory purview. SEC has consistently advised Nigerians against investing in unregistered investment schemes and issued notices notifying Nigerians of fraudulent/unregistered investment schemes.

The effort by the SEC is to ensure consumer protection by ensuring that Nigerians do not invest in fraudulent/unregistered investment schemes and thereby lose their funds. Despite the efforts of the SEC, many Nigerians invested and lost about 822 million USD in CBEX, a Ponzi Scheme which promised Nigerian investors high returns on their investments. Without regulation of FinTechs, there would be little to no consumer protection.

2. Stability and Security of the Financial System: The regulators issue regulations to address important issues that may affect the stability and security of the financial systems if left unregulated.

To ensure the security and stability of the financial system, the regulators such as the CBN have put in place the minimum standards that must be complied with for any FinTech company to operate in Nigeria. These minimum standards are put in place to safeguard the financial system and also protect consumers whose funds and data may be stolen by cybercriminals without the adoption of the minimum standards.

The CBN issued the Risk-Based Cybersecurity Framework and Guidelines for Other Financial Institutions, 2022 providing for the minimum cybersecurity measures to be taken to ensure their continued safe and secured operations. The CBN also requires compliance with Anti-money laundering requirements by promoters applying for financial licenses from the CBN.

These efforts by the CBN are to ensure that the financial system remains stable, reliable and secured for consumers and other players in the financial sector.

3. Supportive Regulatory Initiatives: The regulatory sandbox and the regulatory incubation programs operated by the CBN and SEC respectively tend to provide potential operators in the financial services sector with regulatory support to ensure that their innovative products are tested in a regulated environment fostering innovation while also ensuring compliance.

The CBN has also issued regulations which ensures that the provision of financial services is not restricted to the use of traditional bank account number through regulations that allow the creation and operation of e-wallets, opening of bank accounts with phone numbers, etc.

4. Continued Growth of the Fintech Sector: Despite the enormous regulatory challenges which FinTechs tend to face in Nigeria, they have continued to experience exponential growth. Nigeria is home to FinTech unicorns which include Flutterwave, Opay, Moniepoint, etc. This shows that when followed to the letter, the regulations do not necessarily inhibit the normal operation or growth of FinTechs or limit their profitability but instead provide them with a necessary framework for growth.

Conclusion

We have discussed the key areas where there appear to be strict and burdensome regulations of FinTechs in Nigeria in what could be regarded as overregulation. We have also considered some of the key issues which show that strict FinTech regulations are necessary especially for ensuring the stability and security of the financial system and the protection of consumers.

There are valid arguments on both sides which show that FinTech overregulation in Nigeria may be a reality and may also be a myth. Whether FinTechs are overregulated in Nigeria would depend on which angle one decides to look at it.

When viewed from the necessity of ensuring consumer protection, fraud prevention, KYC, anti-money laundering, the stability and security of the financial system, one could argue that FinTech overregulation in Nigeria is a myth.

However, when viewed from the rigid licensing and capital requirements, mandatory minimum standards, lack of discretion, etc, it may be argued that FinTech overregulation in Nigeria is a reality. It is important that the regulators maintain a balanced perspective when regulating, issuing guidelines and regulations to ensure that FinTech companies are not stifled from innovating and growing.

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.
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Arbitration is a process where parties to a dispute agree to submit their dispute to one or more neutral third parties, known as arbitrators, who render a binding decision on the matter. This method is distinct from other ADR forms, such as mediation or conciliation, in that the arbitrator’s decision is typically final and enforceable, similar to a court judgment. The consensual nature of this approach allows parties to tailor the process to their specific needs, selecting arbitrators with relevant expertise and determining procedural rules that best suit the context of their dispute.

The advantages of using Alternative Dispute Resolution in Commercial disputes provides confidentiality, expertise, flexibility and autonomy, enforceability, cost and time efficiency.

Regulatory Framework in Nigeria.

Nigeria has established a comprehensive regulatory framework for private dispute resolution, notably through the Arbitration and Mediation Act 2023 (the Act). This legislation modernizes and consolidates the country’s approach to alternative dispute resolution, aligning it with international standards and best practices.

Key Features of the Arbitration and Mediation Act 2023:

1. Unified Legal Framework: The Act creates a unified pathway for resolving conflicts via private mechanisms, promoting fair and efficient outcomes in commercial matters.
2. Mandatory Stay of Court Proceedings: Courts are now mandated to halt proceedings and refer parties to dispute resolution when a valid agreement exists, unless the agreement is deemed void, inoperative, or incapable of being performed.
3. Third-Party Funding: The Act explicitly permits third-party funding, addressing previous uncertainties and enhancing access to justice. This arrangement involves a funder who has no prior interest in an investment or commercial dispute, providing financial support to one of the parties engaged in the dispute resolution, in return for a share of the eventual proceeds of the award, if any.
4. Award Review Tribunal: This innovative provision allows parties to opt for an Award Review Tribunal to review arbitral awards, providing an additional layer of scrutiny before resorting to court intervention.
5. Interim Measures: The Act empowers both arbitral tribunals and national courts to grant interim relief to protect parties’ interests during dispute resolution. Interim measures issued by arbitral tribunals are enforceable by the courts, strengthening the process’s effectiveness. Examples of Interim measures include injunctions, security for costs, preservation of assets.
6. Arbitrator Immunity: The Act grants immunity to arbitrators, appointing authorities, and arbitral institutions, except in cases of bad faith, promoting impartiality and independence.
7. Electronic Communications: Agreements can now be validly made through electronic communications, broadening the scope of acceptable forms for such agreements.

These provisions collectively enhance Nigeria’s alternative dispute resolution landscape, making it more attractive for both domestic and international commercial disputes. The Act’s alignment with global standards underscores Nigeria’s commitment to providing a robust and efficient dispute resolution mechanism.

Reasons Why Parties Should Choose Arbitration

This method offers several compelling advantages over traditional litigation, making it an attractive option for resolving commercial disputes:

1. Confidentiality: Proceedings are conducted in private, ensuring that sensitive business information remains confidential. This privacy helps protect trade secrets and maintain reputations.
2. Expertise of Arbitrators: Parties can select arbitrators with specialized knowledge relevant to their industry or the specific issues at hand, leading to more informed and appropriate decisions.
3. Flexibility and Control: The process can be customized to fit the parties’ preferences, ranging from the procedural rules and timelines to the venue of hearings.
4. Enforceability of Awards: Arbitral awards are generally easier to enforce internationally compared to court judgments. Nigeria is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which means that awards obtained abroad can be enforced in Nigeria.
5. Cost and Time Efficiency: This mechanism is often quicker and less expensive than court litigation. . The streamlined procedures and limited discovery processes often result in faster resolutions, reducing legal fees and associated costs. For example, a typical court case in Nigeria can take 4 to 10 years to conclude, depending on the complexity of the case and the jurisdiction, with some cases taking even longer.
6. Neutral Forum: In international disputes, it offers a neutral venue, which can alleviate concerns about potential biases in a foreign court system. This neutrality fosters fairness and can be pivotal in disputes involving parties from different countries.

The Arbitration Process in Nigeria

To effectively utilize this method of dispute resolution, it’s essential for parties to include clear and comprehensive dispute resolution clauses in their commercial agreements. These clauses serve as a mutual commitment to resolve potential disputes handle potential disagreements outside the courtroom.

The process typically unfolds in the following stages:

1. Commencement: The process begins when a party submits a “Notice of Arbitration” or “Demand for Arbitration,” outlining the dispute and the relief sought. This notice is sent to the opposing party and where applicable, to the designated dispute resolution institution.
2. Selection of Arbitrator(s): Depending on the clause in the agreement, parties select one or more arbitrators based on criteria such as expertise, neutrality, and availability. Selection can be by mutual consent or through institutions such as the Nigerian Institute of Chartered Arbitrators (NICArb), Lagos Court of Arbitration, International Centre for Arbitration and ADR, Maritime Arbitrators Association of Nigeria, or the Lagos Chamber of Commerce International Arbitration Centre. etc.
3. Preliminary Hearing and Scheduling: Once appointed, the arbitrator(s) conduct a preliminary hearing to discuss procedural matters, including timelines, discovery processes, and the scheduling of hearings. This stage ensures that both parties understand the procedures and have an opportunity to present their case adequately.
4. Exchange of Information (Discovery): Parties exchange relevant documents and information pertinent to the dispute. Although this stage is usually more concise than in court proceedings, it still allows for meaningful disclosure to support the hearing.
5. Hearing: During the hearing, both parties present their evidence and argument through their skilled lawyers. This may include witness testimonies, expert reports, and documentary evidence. Hearings can be conducted in person, via video conference, or through written submissions, depending on the agreement and circumstances.
6. Deliberation and Award: After the hearing, the arbitrator(s) deliberate and issue a written decision, known as an award. This award is binding on the parties and enforceable in courts, subject to limited grounds for challenge.

Throughout the dispute resolution process, parties maintain control over various aspects, such as selecting arbitrators and tailoring procedures to fit the specific needs of their dispute. This flexibility, combined with the binding nature of arbitral awards, makes this method a valuable tool for resolving commercial disputes efficiently and effectively.

Parties’ Role in the Arbitration Process

In resolving disputes outside the courtroom, the disputing parties play a central and proactive role, exercising significant control over various aspects of the process. Their key responsibilities and rights include:

1. Initiating the Process: A party seeking to begin proceedings must file a “Notice of Arbitration” or “Demand for Arbitration,” formally initiating the proceedings and outlining the dispute and desired remedies.
2. Selecting Arbitrators: Parties have the autonomy to choose arbitrators with relevant expertise and impartiality, ensuring a knowledgeable and unbiased tribunal.
3. Determining Procedural Rules: Through mutual agreement, parties can establish the rules governing the proceedings, including timelines, confidentiality measures, and specific procedures, tailoring the process to their specific needs.
4. Presenting Evidence and Arguments: Parties through their lawyers are responsible for presenting their case, including submitting evidence, calling witnesses, and making legal arguments to support their positions.
5. Maintaining Confidentiality: Given that this form of dispute resolution is a private process, parties are expected to uphold the confidentiality of the proceedings, safeguarding sensitive information and the integrity of the process.
6. Complying with the Arbitral Award: Once a decision is rendered, parties are obligated to adhere to the terms of the arbitral award, which is binding and enforceable. It can be contested on specific grounds including misconduct, fraud or error in judgement.

By actively engaging in these roles, parties can ensure a fair, efficient, and tailored resolution to their commercial disputes.

Contract Clauses and Pending Court Proceedings

When a commercial contract includes an alternative dispute resolution clause specifying that disputes should be resolved through a private adjudication process, and a party initiates court proceedings instead, the legal framework provides mechanisms to address this situation.

Under the Arbitration and Mediation Act 2023 (AMA), if a lawsuit is filed concerning a matter covered by such an agreement, the defendant can request the court to refer the parties to the agreed procedure. Section 5(1) of the AMA mandates that courts must redirect the matter unless the agreement is found to be “null and void, inoperative, or incapable of being performed.” This provision underscores the judiciary’s commitment to upholding parties’ agreements to arbitrate disputes.

To enforce the private dispute resolution clause, the defendant should promptly file an application for a stay of proceedings before submitting any pleadings or taking further steps in the court process. Timeliness is crucial; any delay or participation in the court proceedings may be interpreted as a waiver of the right to arbitrate. The court, upon receiving such an application, is obligated to halt its proceedings and direct the parties to follow the agreed path,  provided the agreement is valid and applicable to the dispute at hand.

The enactment of the AMA has further solidified the legal framework supporting private dispute resolution in Nigeria. By aligning with international standards, the AMA enhances the enforceability of such agreements and awards, providing parties with greater confidence in choosing this method as their preferred dispute resolution mechanism.

Conclusion

Arbitration plays a crucial role in resolving commercial disputes by offering parties a flexible, efficient, and enforceable alternative to litigation. As an ADR mechanism, it provides confidentiality, expert decision-making, international enforceability and cost-effectiveness, making it a preferred choice for businesses seeking to protect their commercial interests.

By including well-drafted dispute resolution clauses in commercial agreements, parties can ensure that disputes are resolved in a structured manner, avoiding the delays, costs and uncertainties of court litigation.

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

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

In Nigeria, it is possible to apply for the cancellation of a registered trademark based on any of the grounds provided by law and upon satisfaction of some conditions as outlined by the Nigerian Industrial Property Office (NIPO). The main grounds for applying to revoke a trademark in Nigeria are usually for non-use and non-renewal of the trademark.

Section 31(1) of the Trademarks Act of Nigeria, 2004 (the Act) states that a registered trademark can be removed from the Register of Trademarks in relation to specific goods for which it is registered. This removal can be initiated through an application made by any person who establishes sufficient interest to the satisfaction of the Registrar or the court. The Act stipulates various grounds for applying to the Registrar of Trademarks for the removal of a registered trademark.

Grounds for Revocation of a Trademark in Nigeria

The grounds for removal of a registered trademark include non-use, non-renewal, failure to observe a condition precedent, where the registration was obtained by fraud, etc.

1. Non-use:

   The Act allows a trademark to be revoked if it has not been used. One ground for cancellation is when the trademark was registered without any genuine intention to use it. In this case, no real use of the trademark should have occurred up to one month before the revocation application.

   The person seeking revocation must prove that the owner never intended to use the trademark and that it has not been used during that time.

   Another ground for removal is when the trademark has not been used for a continuous period of at least five years, up to one month before the application date. Even if there was an initial genuine intention to use the mark, it can still be revoked if it remains unused for five years and one month in relation to the registered goods or services.

Exceptions to Revocation on the Ground of Non-Use

The Act provides for exceptions or defenses to the cancellation of trademarks on the ground of non-use.

1. Bona fide Use:

   If the trademark has been used in good faith by the proprietor for the goods it is registered for, it is exempt from removal due to non-use. This use must fall within the relevant period before a revocation application can be made.

   However, this exemption does not apply if the applicant seeking revocation has been allowed under Section 13(2) of the Act to register an identical or similar mark for the goods, or if the tribunal permits such registration despite prior use.

2. Special Circumstances:

   Special circumstances that prevented the proprietor from using the trademark also protect against revocation for non-use. Non-use caused by factors beyond the proprietor’s control, rather than an intentional decision to abandon the trademark, is a valid defense.

   For example, if a government ban restricts an industry such as cryptocurrency, the trademark for that business may be unusable during the ban. This situation is considered a valid exception since the trademark was not deliberately abandoned.

3. Protection for Well-Known Marks:

   Well-known trademarks registered across various goods classes cannot be revoked for non-use in Nigeria because of their popular status. This protection applies even if the mark isn’t used for all registered classes.

   A highly popular mark may be exempt from removal if the proprietor applies and the Registry acknowledges it as a well-known mark. This ensures genuine trademark rights are preserved fairly.

4. Failure to Observe a Condition Precedent:

   A registered trademark can be revoked if it is shown that the proprietor of the relevant mark or goods failed to comply or observe a condition precedent in relation to the trademark.

   In defense, a proprietor can provide evidence of compliance or fulfilment of the stipulated conditions to avoid removal of the trademark.

5. Non-Renewal of Trademark:

   The registration of a trademark in the Register of Trademarks does not guarantee perpetual protection of the mark. Registration is valid for an initial period of seven years in Nigeria, with the possibility of renewal for subsequent fourteen-year periods.

   The non-renewal of an expired trademark may lead to the cancellation of the mark upon the application of an interested party.

   A defense to an alleged non-renewal is proof that the Registrar did not issue the required statutory notice for renewal.

Other grounds for removal include giving inaccurate or misleading information regarding a trademark when obtaining or maintaining a trademark registration, where the trademark registration was obtained by fraud, where the trademark is likely to cause confusion, where it is scandalous or contrary to law and morality and where the trademark is found to be infringing on the rights of another party.

Procedure for Revocation of a Trademark in Nigeria

An application for the cancellation of a trademark in Nigeria can be made to either the Registrar of Trademarks or to the Federal High Court.

Where it is made to the Registrar, it shall be in the prescribed form and accompanied by a statement of the applicant’s interest, relevant facts upon which the case is founded, and reliefs sought.

Where the applicant is not the registered proprietor of the trademark in question, copies of the application will be provided by the applicant and sent by the Registrar to the registered proprietor.

The defendant is entitled to file a Counter-Statement or Defense to the applicant’s claims. The applicant may file a Reply if necessary.

In revocation proceedings before the Registrar, evidence is typically provided through statutory declarations unless the Registrar directs otherwise. In any case where the Registrar thinks it right to do so, he may take oral testimony instead of or in addition to evidence by statutory declaration.

After reviewing the evidence, the Registrar will determine the question between parties, subject to appeal to the Federal High Court. It is important to note that the Registrar may at any stage of the proceedings refer the application for cancellation to the court.

An application for removal is made to the Federal High Court in the prescribed form where a matter is pending before the court regarding a particular trademark. An appeal from a decision on removal of trademark by the Registrar lies firstly with the Federal High Court, then with the Court of Appeal and finally with the Supreme Court.

In the case of non-renewal of trademark, the Registrar may revoke an expired trademark where the proprietor fails to pay the renewal fee prior to the expiration date or fails to pay the renewal fee with the appropriate surcharge after the expiration date, after the necessary notice of impending expiration has been sent by the Registrar.

The Registrar is statutorily required to notify the registered proprietor of the trademark of the impending expiration not less than one month and not more than two months to the expiration date in the first instance and not less than 14 days but not more than one month to the expiration date in the second instance.

Where the proprietor fails to pay the necessary fee before the expiration date, the Registrar shall advertise the expiration of the trademark in the Trademarks Journal and shall be free to remove the trademark from the Register where the proprietor fails to pay the renewal fee with any surcharge for late renewal within one month after the advertisement.

Conclusion

Nigerian law allows for cancellation of trademark on a variety of grounds. These include non-use, non-renewal, obtaining registration by fraud, etc. An application for revocation can be made by an interested party to the Registrar of Trademarks or to the Federal High Court.

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

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

In October 2022, Nigerian president at the time, signed the Start-up Act, which aimed to enhance the development and growth of the Nigerian Startup sector and encourage innovation and entrepreneurship for startups.

As a result of this Act, there has no doubt been a lot of regulatory attention on Start-ups, with regulatory compliance becoming an important factor for new companies to consider.

A start-up can be referred to as a company that is in the early or initial stages of business or development. According to the Nigerian Startup Act, 2022, a start-up is a company which has been in existence for a period not more than 10 years.

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

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

1. Incorporation of Company

It is a mandatory requirement that all businesses in Nigeria must be incorporated with the Corporate Affairs Commission (CAC) in accordance with the Companies and Allied Matters Act (CAMA), 2020. Incorporation grants your company legal identity and is mandatory before an organization commences business. For official information and updates on company incorporation and compliance, visit the Corporate Affairs Commission’s Public Notes 

2. Regulatory Compliance for Tax Registration and Filings

Start-ups must register with the Federal Inland Revenue Service (FIRS) and State Inland Revenue Service for remittance of Company Income Tax (CIT), Value Added Tax (VAT), Personal Income Tax and Withholding tax (WHT) where applicable.

Upon registration with the FIRS, a company is issued a Tax Identification Number (TIN), which serves as the company’s identification number for all dealings with the federal tax authorities. Failure to register for tax will attract sanctions from the FIRS.

The first CIT must be filed within 18 months of incorporation, and subsequently within six months of their financial year-end. Companies are also required to file and remit VAT on or before the 21^st day of the month following that which the transaction was made.

Remittance of Personal Income Tax or PAYE (Pay As You Earn) on behalf of local employees are to be filed monthly to the state government where the worker resides on or before the 10^th day of the month following the month of deduction.

Additionally, employers are required to file annual PAYE returns not later than 31^st January in respect of all employees in its employment in the preceding year.

WHT returns are to be filed monthly within 30 days from the date the amount was deducted or the time the duty to deduct arose. Failure to file the relevant tax returns result in penalties and tax liabilities.

3. Post incorporation filings

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

4. Industry-Specific Licenses and Permits

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

5. Mandatory Meetings for Regulatory Compliance

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

6. NSITF Contribution and Pension

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

7. Nigerian Data Protection Commission Registration and Data Audit

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

8. Brand Protection

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

9. Corporate Governance

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

9. Nigerian Investment Promotion Commission (NIPC) Registration

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

10. National Office for Technology Acquisition and Promotion (NOTAP) Registration

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

11. Special Control Unit Against Money Laundering (SCUML) Registrations

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

Conclusion

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

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

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

Therefore, any person or entity desiring to provide inbound cross-border money remittance in Nigeria is required to be licensed as an IMTO with the CBN. Under the previous regime provided by the Guidelines on International Money Transfer Services in Nigeria, 2014, IMTOs were able to engage in both inbound and outbound international money transfer but this is no longer the case following the new Guidelines issued by the CBN in January 2024 which restrict IMTOs only to inbound international money transfers.

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

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

Permitted Operations for IMTOs

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

Non-Permitted Operations

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

Procedure for Obtaining IMTO License from the CBN

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

1. Approval-in-Principle

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

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

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

2. Final Approval

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

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

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

Renewal of IMTO License

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

Prohibited Entities

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

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

Conclusion

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

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

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

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

Significant judicial decisions were also delivered by the courts which shaped the tax and gaming landscapes in Nigeria. This legal recap is divided into four parts representing the four quarters of the year, highlighting what we think are the most impactful laws and regulations, reforms, and judicial decisions in 2024.

Q1 2024 Legal Recap: Key Developments in Nigerian Law (January – March)

As part of this Legal Recap, it is important to note that forex policy reforms were implemented by the Central Bank of Nigeria (CBN) with the aim of stabilizing the Naira, fostering economic growth and the provision of agricultural funding to support food production.

Financial policy and regulations were revised by the CBN to ensure the financial industry players operate within a well-regulated environment ensuring the integrity of the financial services sector.

• On 5 January 2024, the Supreme Court of Nigeria delivered a judgment in the case of National Inland Waterways Authority (NIWA) v. The Lagos State Waterways Authority (LASWA).
  The Supreme Court reaffirmed the power of the Federal Government through the National Inland Waterways Authority (NIWA) to control the activities on the country’s waterways.
  The decision of the court settled the dispute between NIWA and Lagos State over the appropriate party with regulatory rights over the country’s waterways with the decision of the court in favour of NIWA.
• On 18 January 2024, the National Agency for Food and Drug Administration and Control (NAFDAC) launched the Narcotic Drugs Serializations Pilot Project, in a bid to strengthen the quality and security of medical products in the country’s drug distribution network.
  NAFDAC disclosed that the initiative was aimed at combatting the proliferation of substandard and falsified medicines by implementing a traceability system, addressing challenges posed by unscrupulous elements in the pharmaceutical supply chain.

• On 29 January 2024, the CBN issued the Financial Market Price Transparency circular requiring all Authorized Dealers that the CBN has permitted financial markets transactions to be conducted on a ‘’willing buyer will seller’’ basis.

  The CBN therefore expects prices to be quoted and displayed in a transparent manner.

• On 31 January 2024, the CBN issued the Reviewed Guidelines on International Money Transfer Services in Nigeria. The Guidelines stipulate the regulatory requirements that must be met to process and obtain license to provide international money transfer services in Nigeria.
  The Guidelines revised upward the application fees, capital requirements, etc.
• On 31 January 2024, the CBN issued the Harmonising of Reporting Requirements on Foreign Currency Exposure of Banks to address the growth in foreign currency exposures of banks through their Net Open Position (NOP).
  Therefore, to ensure the risks are well managed and avoid losses, the CBN issued the guidelines to address it.
• On 2 February 2024, the CBN issued the Cash Reserve Requirement Framework Implementation Guidelines which stated the implementation of a significant policy change by revising the Cash Reserve Ratio (CRR) framework.

  This update included a reduction in the Loan-to-Deposit Ratio (LDR) compliance requirement from 65% to 50%, aiming to address lending shortfalls among deposit money banks. The revised framework requires banks falling short of this new LDR threshold to allocate 50% of the shortfall as part of their CRR with the CBN.

• On 27 March 2024, the Nigerian president issued a directive titled Implementation of a Single-Digit Tax System which aims to streamline Nigeria’s tax structure by reducing the number of taxes to a maximum of nine.
  This initiative seeks to simplify the tax code, alleviate the tax burden, and foster a more business-friendly environment. The directive will take effect following the completion of the Presidential Committee on Fiscal Policy and Tax Reforms’ work.

• On 28 March 2024 the CBN issued the Review of Minimum Capital Requirements for Commercial, Merchants and Non-Interest Banks in Nigeria which stipulated new minimum capital requirements for banks. It sets the minimum capital base for commercial banks with international authorization at N500 billion.

  The minimum capital base for commercial banks with national authorization is now N200 billion, while the requirement for those with regional authorization is N50 billion.
  Merchant banks are required to have a minimum capital base of N50 billion, while non-interest banks with national and regional authorizations must meet minimum requirements of N20 billion and N10 billion, respectively.

  All banks are required to meet these requirements within 24 months starting from 1 April 2024 and ending on 31 March 2026.

Q2 Legal Recap: Nigeria Regulatory Developments (April – June 2024)

The second quarter of this Legal Recap highlights continued legislative activity, particularly around fintech and digital assets. The Central Bank of Nigeria (CBN) issued revised guidelines for International Money Transfer Operators (IMTOs), while the Securities and Exchange Commission (SEC) proposed new rules for virtual asset service providers.

The Student Loans Access to Higher Education (Repeal and Re-enactment) Bill, 2024 was enacted.
The Cybersecurity levy was set for implementation by the CBN but was eventually suspended due to public outcry over the announcement and the proposed implementation of the levy.

The electricity market is also gradually being deregulated by states with some states receiving the approval of the NERC to regulate electricity market within their respective states.

• On 3 April 2024, the Nigerian president signed the Student Loans Access to Higher Education (Repeal and Re-enactment) Bill, 2024 into law. This revised legislation aims to provide financial assistance to indigent Nigerian students by offering interest-free loans through the Nigerian Education Loan Fund.
  The law is intended to promote accessible higher education and functional skill development for students across the country.
• On 22^nd April 2024, the Federal Government launched a ₦200 billion Intervention Fund Aimed at Supporting Micro, Small, and Medium Enterprises (MSMEs) and Manufacturers.
  This initiative, introduced by the Bank of Industry, is designed to stimulate local production, reduce import dependency, and enhance Nigeria’s industrial growth.

  Eligible businesses can access loans under favourable terms, including single-digit interest rates and flexible repayment conditions, to improve capacity, expand operations, and create jobs.

• On 2 May 2024, the Federal Inland Revenue Service (FIRS) issued a directive titled Implementation of Stamp Duty on Mortgage-Backed Loans and Bonds. The Nigerian government directed banks to deduct stamp duty charges on mortgages. This directive is aimed at improving revenue generation from the stamp duty on financial transactions.
  The charge is applicable to all mortgage transactions and is expected to support government revenue collection.
  It introduced a 0.375% stamp duty on mortgage-backed bonds. This charge applies to various types of mortgage and legal instruments as specified under the Stamp Duties Act (SDA).
• On 6 May 2024, the CBN issued the Cybercrimes (Prohibition, Prevention, etc) (Amendment) Act 2024 – Implementation Guidance on the Collection and Remittance of the National Cybersecurity Levy. The Guidance required the deduction of 0.5% cybersecurity levy on all electronic transactions.
  The Guidance exempted certain transactions including loan disbursements and repayment, salary payments, letters of credits, cheques clearing and settlement, etc.
  The implementation of the Guidance has now been temporarily suspended following protests by the public.
• On 7 May 2024, the Corporate Affairs Commission (CAC) issued a public notice titled CAC and Fintech Operators which mandated all Point of Sale (POS) operators in Nigeria to complete their business registration with the CAC by 7 July 2024 which was eventually extended by 60 days to 5 September 2024.
  This directive by the CAC aligned with the Companies and Allied Matters Act (CAMA) 2020 and the Central Bank of Nigeria’s (CBN) agent banking guidelines which aim to safeguard the operations of FinTechs, improve accountability, and strengthen the economy.
• On 22 May 2024, the CBN issued the Revised Regulatory and Supervisory Guidelines for Bureau De Change Operations in Nigeria. The Guidelines required existing Bureau De Change (BDC) operators to re-apply for a new license in accordance with any of the license categories and meet the minimum capital requirements within six months.
  New applicants are also required to comply with the Guidelines which supersedes the Revised Operational Guidelines for Bureau De Change in Nigeria dated November 2015.
  It also categorizes BDC license into tier 1 with permission to operate in any state and tier 2 with permission to operate in only one state.

• On 14 June 2024, the SEC issued a circular titled Implementation of Enterprise Risk Management. It provides that all Capital Market Operators (CMOs) are required to implement an Enterprise Risk Management (ERM) framework that conforms to international standards such as the Committee of Sponsoring Organizations of the Treadway Commission (COSO), the International Organization for Standardization (ISO 31000),

  Financial Action Task Force (FATF) Recommendations and any other internationally recognized risk management standards.

  The adoption of comprehensive risk management practices is important in minimizing systemic impact and safeguarding the interests of all stakeholders.

• On 24 June 2024, The Securities and Exchange Commission released a circular titled Revamped E-Dividend Mandate Management System Portal which launched the revamped e-Dividend Mandate Management System (e-DMMS) Portal.
  This is noted to be an important step towards curbing the growth of unclaimed dividend and generally improving investor experience in the Nigerian Capital market.

  The revamped e-DMMS Portal introduces a “self-service interface” that allows investors apply to mandate their accounts for e-dividend virtually, without having to visit a Registrar or a Bank.

• On 28 June 2024, the Nigerian president signed an executive order eliminating tariffs, excise duties, and VAT on imported pharmaceutical inputs. This is part of a broader initiative to support local drug manufacturers and improve the availability of essential medicines in Nigeria.
  The executive order is intended to make local pharmaceutical producers more competitive by reducing costs, thereby ensuring more affordable healthcare for Nigerians.

Q3 2024 Legal Recap (July – September 2024)

This Nigeria Legal Recap for Q3 reflects a dynamic policy environment. The CBN, SEC and NCC were all very active as they issued regulations and initiated reforms applicable to operators in the various sectors which they regulate.

The Federal Government introduced the Deduction of Tax at Source Regulations 2024, aligning with the National Tax Policy and exempting certain sectors like telecommunications. Significant judicial decisions were also handed down as in the case of the Federal High Court allowing companies to have single shareholder regardless of the incorporation date.

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

Q4 2024 Legal Recap (October – December 2024)

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

• On 2^nd October 2024, the Federal High Court sitting in Abuja ruled in the case between Abubakar Marshal v. Vehicle Inspection Officers (VIO) that VIOs lack statutory authority to stop private vehicles, demand roadworthiness certificates, impound vehicles, or impose fines on motorists. The court clarified that the requirement for roadworthiness certificates applies exclusively to commercial vehicles under existing laws. The court described the actions of the VIOs, including the imposition of fines and confiscation of private vehicles as oppressive, unlawful, and without legal foundation.
• Value Added Tax Modification Order 2024 and Notice of Tax Incentives for Deep Offshore Oil & Gas Production in accordance with the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024 were issued by the Federal Government. The VAT Modification Order 2024 exempts energy products including diesel, LPG, CNG and clean energy infrastructures from VAT while the Notice of Tax Incentives introduces new tax reliefs to attract investments into Nigeria’s deep offshore Oil & Gas projects.
• On 3 October 2024, the Federal Inland Revenue Service (FIRS) issued a public notice notifying taxpayers that The Deduction of Tax at Source Withholding (WHT) Regulations, 2024 would take effect from 1^st January 2025 ending the current withholding tax regime contained in the Companies Income Tax Act.
• The FIRS launched an Unstructured Supplementary Service Data (USSD) Code on 9 October 2024 for the purpose of improving taxpayers’ satisfaction. The USSD enables taxpayers to retrieve their Taxpayers Identification Number (TIN) verify Tax Clearance Certificate (TCC), etc.
• On 7 October 2024, the Federal High Court, Lagos struck out the suit commenced by the Manufacturers Association of Nigeria (MAN) v. National Electricity Regulatory Commission (NERC) & 11 Others which challenged the implementation of electricity tariff review on the grounds of the suit being an abuse of court process having not being commenced in accordance with due process and no disclosure of reasonable cause of action.
• In October 2024, Moniepoint, a Nigerian FinTech startup became a unicorn by getting a $1 billion valuation after raising $110 million in Series C funding which highlights the rapid growth and importance of FinTech payment providers in Nigeria.
  In November 2024, the Federal Government announced its plan to establish a national data bank to serve as a centralized platform for the collection, analysis and dissemination of transport-related data for the purpose of informed decision-making and policy formulation.
• On 15 November 2024, the Supreme Court of Nigeria declined to declare the Economic and Financial Crimes Commission (EFCC), Nigerian Financial Intelligence Unit (NFIU) and Independent Corrupt Practices and Other related offences Commission (ICPC) as illegal and unconstitutional in the suit between Attorney General of Kogi State & 18 Ors v. Attorney General of Federation suit No: SC/CV/178/2023).

• On 22 November 2024, the Supreme Court of Nigeria in the case between Lagos State Government & Ors v. Attorney General of Federation & Anor suit No SC/1/2008 nullified the National Lottery Act, 2005 and limited its application to only the Federal Capital Territory (FCT). The National Lottery Act, before the decision of the Supreme Court, applied in the entire country to sports betting and lottery licensing.

• On 29 November 2024, the Central Bank of Nigeria (CBN) released Revised Guidelines for The Nigerian Foreign Exchange Market (NFEM), marking a significant overhaul of the country’s FX operations. The new framework consolidates all FX windows, redefines the roles of market participants, and introduces stricter compliance and transparency measures.

  Key provisions address the roles of Authorized Dealers, Bureaux de Change (BDCs), pricing mechanisms, interbank trading, compliance, and reporting standards. The guidelines mandate that all BDC transactions comply with licensing terms and be reported in real time.

  Furthermore, all FX transactions must now be priced through the Electronic Foreign Exchange Matching System (EFEMS), a centralized platform that also publishes daily FX rates for public access, underscoring a strong emphasis on pricing transparency and rigorous reporting requirements.

• On 3 December 2024, the Lagos State Governor signed the Lagos Electricity Bill 2024 into law, marking a significant step toward energy independence for Lagos State. This legislation establishes the Lagos State Electricity Regulatory Commission to oversee the electricity market, regulate power generation, and set tariffs.

  It also created the Lagos State Electrification Agency to promote off-grid solutions and enhance electricity access in underserved areas. Additionally, the bill introduces the Lagos Electrification Fund to finance the state’s grid expansion and off-grid projects with a focus on renewable energy, energy efficiency, and decarbonization.

• On 11 December 2024, the Central Bank of Nigeria (CBN) imposed a fine of ₦1 billion each on Moniepoint and OPay for regulatory non-compliance.
  These penalties were part of the CBN’s routine audits of the activities of FinTechs which identified compliance issues within these companies.
  The fines underscore the CBN’s commitment to enforcing strict regulatory standards in Nigeria’s rapidly expanding digital financial services industry. On 16 December 2024, the Federal Competition and Consumer Protection Commission (FCCPC) rejected Coca-Cola Nigeria Limited’s appeal against a N186 million fine.
  The fine was imposed due to deceptive branding practices, including misleading product descriptions and unfair marketing tactics. The FCCPC’s decision underscores its commitment to protecting consumers and ensuring fair and honest practices in the Nigerian market.
• On 16 December 2024, the Securities and Exchange Commission published the Re-exposure of Amendments to Rules on Digital Assets Issuance, Offering Platforms, Exchange and Custody.
  The proposed amendment is to extend the rules to cover new virtual assets activities and business models such as cross chain transfer services, on/off-chain transmission orders, advisory on virtual assets investment, placing and distribution of virtual assets, etc.

Conclusion: Insights from the 2024 Legal Recap

This legal recap underscores how 2024 shaped the rule of law and business environment in Nigeria. The government introduced impactful rules and regulations including policy changes in areas such as tax, financial services sector, capital markets, electricity, minimum wage, with regulations like the Deduction of Tax at Source (Withholding) Regulations 2024, Lagos Electricity Law 2024 and the National Minimum Wage Act reflecting efforts to improve economic conditions.

The Central Bank of Nigeria, the Securities Exchange Commission and Federal Inland Revenue, the Nigerian Communications Commission, etc. also issued new and amended guidelines and regulations to provide updated regulatory requirements and obligations of players in the regulated industries.

The judiciary also delivered impactful decisions such as the Federal High Court’s ruling on the issue of single shareholder pursuant to the Companies and Allied Matters Act, 2020 and the decision of the Supreme Court nullifying the application of the National Lottery Act in the federating 36 states of the country.  As we approach the new year, we extend our sincere gratitude to all our clients for their continued trust in us and wish you a Merry Christmas and a prosperous New Year 2025.

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

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

Gambling activities in Nigeria broadly include sports betting, lottery, gaming, casinos, lotto, etc. In order to legitimately operate any type of gambling activity in Nigeria, an operator must first obtain the appropriate licenses from the regulatory authorities. Using Lagos State as a case study, this article explains the regulatory requirements and processes involved in obtaining a betting license in Lagos State.

Regulatory Framework

Previously, a betting company wishing to operate within Nigeria required both a federal license issued by the National Lottery Regulatory Commission (NLRC) and a state licence from the state in which it wishes to operate from.

At the federal level, the NLRC, established under the National Lottery Act, 2005, served as the primary body overseeing gaming activities across the country. Concurrently, state governments regulated online betting within their jurisdictions through their respective regulatory authorities.

However, a recent landmark judgment in Lagos State Government & Ors v. Attorney General of Federation and Anor with suit number SC/1/2008 delivered by the Supreme Court of Nigeria in November 2024, has changed this position by nullifying the National Lottery Act, 2005 and declaring that the National Assembly lacks the jurisdiction to legislate on matters related to lotteries and games of chance, as such powers reside exclusively with state Houses of Assembly to legislate on lottery and gaming within their respective states.

Thus, the import of the Supreme Court judgement is that the National Lottery Act, 2005 now applies only within the Federal Capital Territory (FCT) where the National Assembly has the legislative power to enact laws on lottery and gaming matters. Therefore, lottery and online betting companies are now only required to obtain licenses solely from the state(s) in which they intend to operate.

In Lagos State, the regulatory body responsible for controlling and regulating betting activities is the Lagos State Lotteries and Gaming Authority (LSLGA). Sports betting companies must obtain the requisite license from LSLGA before commencing operations in the state.

With a large internet penetration and the rise of online betting, in practice, an online betting company can obtain a license in one state and be accessible online in another state thereby avoiding the need to apply for licences in multiple states.

Requirements for Obtaining a Sports Betting License/Permit from Lagos State Lotteries and Gaming Authority (LSLGA):

As stated above, the regulatory body responsible for issuing the said license/permit in Lagos State is the Lagos State Lotteries and Gaming Authority (LSLGA). The requirements for obtaining this permit from the LSLGA include:

1. Company Incorporation: The first step towards obtaining the license from the LSLGA is the incorporation of a local company in Nigeria with the Corporate Affairs Commission (CAC) as mandated under the Companies and Allied Matters Act, 2020 (CAMA). This is a compulsory regulatory requirement for any company wishing to do any business in Nigeria.
2. Share Capital: The company must meet the minimum share capital requirement of N20,000,000.00 (Twenty Million Naira) as prescribed by the LSLGA. Please note however that the CAC now requires that any company with foreign participation must have a minimum share capital of N100,000,000 (One Hundred Million Naira). If the company being set up has foreign participation either by shareholding or directorship, the minimum share capital from a CAC point of view must therefore be N100,000,000. Also note that this amount is merely the minimum value of the company shares at the time of registration and the shares do not have to be fully paid up.
3. Financial and Technical Ability: The company must demonstrate the financial and technical ability to operate an online betting business. The applicants must demonstrate financial stability and viability by submitting audited financial statements, proof of sufficient capital, and a detailed business plan. Regarding the technical ability, operators must invest in a robust technical infrastructure for their online betting platform, including secure servers, data protection, and reliable payment processing systems. Compliance with international online security standards is also very essential.
4. Applicant companies cannot be wholly-owned by foreigners as Nigerians are required to hold at least fifteen percent (15%) of the shares in foreign-owned companies to fulfil local content requirement and promote local participation.
5. Payment of application and license/permit fees.

Procedures for Obtaining a Sports Betting License/Permit from LSLGA:

The procedure for obtaining this license from the LSLGA is divided into three stages as follows: the application stage, the approval in principle stage and the final or grant of license stage.

Application Stage:

At this stage, an application for a license/permit is to be submitted to LSLGA together with the following documents:

1. A letter of intent.
2. Evidence of payment of non-refundable application fee
3. Company incorporation documents issued by CAC (Certificate of Incorporation, status report showing details of directors, minimum share capital and registered address and MEMART).
4. Detailed business plan/proposal on the betting scheme which should provide information and documentation on the following:
   1. Business structure information such as address of the registered office, branches, outlets and planned locations, particulars, profile and relevant qualification(s) of directors and key personnel, Tax Clearance Certificate (“TCC”) of Director(s) in the last three (3) years, description of operations and management structure, a betting industry analysis that clearly demonstrates an understanding of the industry, marketing and distribution plans, address of planned location, branches and outlet(s). Please note that these must be lock-up shops – kiosks and mobile vendors are not allowed.
   2. Proposed sports betting operations including details of planned games, relevant sports activities, approximate odds to be used, Operator’s game rules and participants’ Code of Practice, Number and frequency of sports/games and prizes and price structure.
   3. Financial projections including management account, company’s bank statement of the preceding year to support financing plans, five years projected profit and loss account, balance sheet, cash flow analysis which should provide for the annual licence fee and monthly gaming tax, capital investments, etc.
   4. Hardware and software information including servers, routers, firewalls, operating systems and database application specification.
   5. General information on the architectural diagram clearly illustrating the technical operational flow, the proposed platform (whether self-host or cloud based) and the contact information of the hosting company if cloud based.
   6. Detailed information about the applicant’s bookmaker, betting sites and technical consultants, proposed technical topography including a schematic diagram clearly illustrating the technical operational flow.

Due diligence will be conducted on every application to determine the suitability of the applicant for the license within a period of 10 to 15 working days. The applicant will also be required to make a presentation before the LSLGA to justify the grant of the license as part of the application process. Upon the satisfactory fulfilment of the requirements of the application stage and payment of the license fee, an Approval in Principle (AIP) will be granted.

Approval-in-Principle (AIP):

After a successful presentation and upon a satisfactory fulfilment of the pre-approval requirements, the applicant must pay a license fee currently N50,000,000.00 (Fifty Million Naira). Once this payment is made, the applicant is issued an Approval in Principle (AIP).

An AIP serves as a temporary licence allowing the company to operate for a period not exceeding three (3) months (90 days) during which the company will be excused from paying tax.  The AIP is typically granted with specific conditions that must be met before the issuance of a final or substantive license.

Grant of License:

Upon the expiration of the AIP and the applicant’s fulfilment of all stipulated conditions set on the AIP, a final license is issued to the applicant. This license is valid for one (1) year from the date of issuance and is renewable annually for a fee currently N10,000,000.00 (Ten Million Naira).

Post-Licensing Obligations

Following the issuance of the license and commencement of operations, licensed operators are required to fulfill certain post-license obligations, including the remittance of a monthly gaming tax of 2.5% of their sales revenue to the regulatory body. Additionally, licenses must be renewed annually upon expiration to maintain operational compliance.

There are also other tax obligations for e.g. income tax, Value Added Tax (VAT), company income tax, etc. that are payable by the company either to the state revenue authority or the Federal Inland Revenue Services. The licensed operators are also required to make the filings of their annual returns with the CAC to ensure their regulatory compliance.

Conclusion

With the rise of online betting, the Nigerian gaming industry has experienced extraordinary growth in recent years. Previously, sports betting was regulated at both the federal and state levels in Nigeria. However, a recent landmark Supreme Court judgment in November 2024 clarified that betting companies are now only required to obtain licenses exclusively from the states where they intend to operate as the licensing and regulatory powers and oversight of the NLRC is now limited only to the Federal Capital Territory. Upon obtaining the license, operators must comply with all post-license obligations, including remittance of fees to the regulatory body, renewal of license, payment of taxes, filing of annual returns with the CAC, etc.

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

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

With the expansion of internet penetration in Nigeria, telemedicine has become an emerging business in Nigeria and has begun to experience significant growth. This is partly driven by the increasing need for accessible healthcare, the advancement of technology, the outbreak of Covid-19 which resulted into limited physical consultations with healthcare providers and the mass exodus of health care professionals from Nigeria in the last few years. Telemedicine also provides accessibility and thereby bridges the gap in healthcare access, especially in rural and underserved areas where medical facilities and professionals are scarce. Recently, there has been an increased interest in telemedicine business from both local and foreign players in that space.

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

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

Regulatory Requirements

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

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

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

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

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

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

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

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

Other Legal Considerations

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

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

Conclusion

Driven by the increasing need for accessible healthcare, the advancement of technology and the mass exodus of healthcare professionals from Nigeria in the last few years, there has been a marked increase in the provision of telemedicine in Nigeria.

The operation of a telemedicine business in Nigeria is regulated by various laws relating to the incorporation of businesses, licensing and registrations, data processing and protection, confidentiality, etc. Telemedicine providers must ensure that their healthcare professionals’ licenses and registrations are up to date in compliance with applicable laws and regulations. Contracts and agreements for the transfer of healthcare technologies are required to be registered with NOTAP.

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

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

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

There are 36 states and a Federal Capital Territory (FCT) in Nigeria and an operator must obtain the lending operators license from the regulatory authority in the relevant state(s) in which they wish to operate or the FCT before commencing operations. It is important to note that where the money lending business is to be carried on in more than one state, a money lenders license must be obtained in each state in which the money lending business is to be carried on. It is a criminal offence to engage in the business of money lending without a license.

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

Requirements for Money Lenders License in Lagos State

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

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

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

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

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

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

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

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

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

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

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

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

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

Conclusion

With the growth of FinTechs in Nigeria, there has been tremendous growth in the Nigerian online money lending space in the last few years. The business of money lending is regulated in Nigeria by the state governments, the FCT and the FCCPC.

An operator is required to obtain a lenders license in any of the 36 states of Nigeria in which it wishes to carry on business. Individual licenses must be obtained in every state in which an operator seeks to do business.

Any company desirous of providing money lending services through any digital platform is required to register with the FCCPC before commencing business in Nigeria failing which its business and digital apps could be permanently blacklisted.

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

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

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

Requirements for the Registration of Imported Products with NAFDAC

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

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

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

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

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

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

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

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

Product Registration Processes

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

1. Application

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

2. Import Permit

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

3. Laboratory Analysis

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

4. Factory Inspection

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

5. Approval

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

Product Registration Timelines

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

Practical Considerations

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

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

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

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

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

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

Conclusion

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

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

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