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#NigeriaDecides2019: Political Decisions and Its Economic Effects | B.K. Saka, Esq.
Independent National Electoral Commission on January 9, 2018 released the
official timetable and calendar of exercises for the anticipated general elections
which is down to less than a month. As a major aspect of arrangements for the polls,
INEC has registered an aggregate of 91 political parties and through its
Continuous Voter Registration which was suspended on August 31, 2018, had been
able to register 84,004,084 (Eighty-Four Million, Four Thousand, and Eighty-Four)
eligible voters.
to Reuters, Nigeria’s economy will grow more slowly this year than previously
forecasted, this is due to investors hold off before elections this year, the
average investor is a capitalist he is concerned about the profitability of the
market he is trading in, the indicators have not shown positivity as such he
holds off. Investigators and financial experts’ conjectures demonstrated a
middle of 2.1 percent development for Nigeria, quickening to 3.0 percent one
year from now, a noteworthy downsize from the past survey taken three months
back, which demonstrated Africa’s biggest economy growing 2.6 percent this year
after a dreary 0.8 percent in 2017. The upcoming elections and its trademark of
related high-wire political issues would affect business and investment alerts
with respect to economic stakeholders. Business and venture decisions are definitely
subject to the aftermaths of the forth coming elections.
the fact that President Buhari, to some degree, won the 2015 race on the
strength of his anti-corruption promises, corruption is still endemic in
Nigerian public life and it appears that it is only members of the opposition
parties that are being prosecuted. Nigeria has one of the biggest youth
populaces on the planet, with at any rate half of its evaluated 180 million-in
number populace younger than 30. This could be a gigantic advantage for the
nation yet the current financial conditions where this advantage is harnessed,
the reverse is sadly the case, as a very large percentage of these young
persons are unemployed and the economic environment makes its unrealistic for
them to thrive.
these negatives, we expect the continuous recuperation in oil generation to
make ready for robust medium-term prospects, helped by enhanced transparency in
the energy sector and others. Likewise, the bounce back in the economy would be
coordinated by enhancements in the fiscal balance, as the spending shortfall is
anticipated to ease from 3.6% of the GDP in 2017 to 3.2% in 2018. An enhanced
business atmosphere and speculators’ certainty have been the aftereffects of
the upward development in Nigeria’s ease of doing business ranking.
enhancement in credit to the private sector will drive individual investment development
and thusly affect business and buyer utilization emphatically. The standpoint
of the naira past 2018 stays empowering regardless of fears that the raw
petroleum supply excess may bring costs down in 2019. Having directed its month
to month Forex request by 65% in 2017, a further significant decline is normal
in 2019 as Nigeria’s biggest Forex use the importation of refined oil-based
goods is probably going to be taken out when the Dangote refinery goes ahead
stream.
2019 races move closer, stock trade dives by 19.77%. The year 2018 was not all
that glowing for the Nigerian Stock Exchange as its significant markers
devalued by 19.77 percent because of vulnerabilities encompassing the expected
general decisions. The News Agency of Nigeria reports that the NSE which was
named the third best performing stock trade on the planet in 2017 with more
than 43 percent degree of profitability performed horridly in 2018. Specialists
said the market, which began the primary quarter on a positive note, plunged
because of the withdrawal of assets by remote portfolio financial investors who
were concerned over the pending elections.
all these Negatives, one way out of a conceivable reaction on the economy is
that Politicians and their cronies need to receive down to business systems
that would ensure quiet battles and balance out the country to guarantee a
practical market bounce back. Besides, it should be perceived that uncertainty
and social issue are disincentives to speculation. Government should meet
people’s high expectations of handling, with all earnestness, the lamentable
advancements so as to re-establish investors’ certainty.
quiet. Politicians should be upstanding and play by the standard by following
fair treatment to guarantee a serene environment in front of the decisions. Politicians
require not overheat the polity. The political class needs to understand the
nexus between political decisions/indecisions and economics. It will be
ridiculous to win an election, then spend years convincing investors to come (or
comeback) to invest in the country. To have a prosperous 4-year ahead, our
leaders have to take strict business decisions that will make Nigeria a hive
for investors and magnates.
prestigious Ayanlaja, Adesanya & CO, Situate in ILupeju, Lagos. He has keen
interest in Business and Corporate Law, Commercial arbitration and Fintech. He
also writes and advises business start ups and SMEs.
k_basyt@yahoo.com,
@_Kolamposi
Crypto-Currency Anarchy – A Comparative Overview | Michael Jonathan Numa
have evolved tremendously and has increasingly established itself as a payment
system globally. Today, crypto-currencies are a Multibillion-dollar venture
with dual potential as both an investment and an electronic medium of exchange.
Increasingly, mainstream retailers are announcing plans to accept bit-coins.
Bit-coin ATMs are growing in prominence; the first bit-coin debit cards were
launched by an Hong Kong domiciled company called Xapo in the year 2014 and the
first Bit-coin derivative transactions have been executed on a US-regulated
exchange. Yet, there remain numerous risks and challenges associated with
crypto-currencies. In addition to experiencing significant volatility in
exchange rate and susceptibility to attacks from illicit users and
cybercriminals; the crypto-currency marketplace remains largely unregulated.
Governments around the globe are taking widely divergent actions- or taking no
action at all- to define and regulate crypto-currencies. This article is an
attempt to provide some context for the crypto currency landscape, including
regulatory and law enforcement developments.
peer-to-peer payment systems that are digital representations of value and can
be transferred, stored and traded electronically. At their core, they are
distinct from other digital payments (e.g PayPal, Facebook Credits, airline and
hotel miles) because they provide intermediate party. They do not have legal
tender status; they operate with no central authority or banks, and their issue
is carried out collectively by a distributed network. While the transaction
between buyer and seller is direct, the identities of the parties are encrypted
and therefore no personal information is transferred. However, crypto-currency
transactions such as bit-coin transactions are not fully anonymous. A
transaction record of every bit-coin and every bit-coin user’s encrypted
identity is recorded on a public ledger. As a result, it is most appropriate to
characterize bit-coin and many other crypto-currencies as pseudonymous as
opposed to being anonymous. This pseudonymity, combined with its efficient and
decentralized nature, makes it appealing to both consumers and criminals alike.
thousands) of crypto-currencies in existence with a current market
capitalization as at April 2018 of over $200bn. The bit-coin system is the most
prominent and perhaps most dominant crypto-currency. Other mineable crypto-currencies
with sizeable market capitalization include ButsharesX, Peercoin and Dogecoin.
understanding of what crypto-currency is, they do clarify the role of
crypto-currencies in the modern financial system. Are they a commodity, a
currency? Policy makers and regulators are still trying to answer these
questions. The department of Treasury’s Financial Crimes Enforcement Network
(FinCen) has defined crypto-currency as a medium of exchange that operates like
currency in some environments, but does not have all the attributes of real
currency, does not have legal tender status in any jurisdiction.
Service (IRS) held that crypto-currency would be treated as property, not
currency, for tax purposes. And a Former Acting Commissioner of the Commodity
Futures Trading Commission (CFTC) stated his belief in May 2013, that bit-coins
would be likely to be considered a commodity under the Commodity Exchange Act.
Finance Stability Board Mr. Mark Carney while in agreement with the U.S.
Securities and Exchange Commission (SEC) to classify crypto-currencies as
securities subject to laws governing how they are issued and traded stated inter
alia thus “For many reasons the crypto assets in your digital wallets are
unlikely to be the future of money, but that is not meant to dismiss them.
Their core technology is already having an impact. Bringing crypto-assets into
the regulatory tent could potentially catalyze innovations to serve the public
better”.
ecosystem should be held to the same standards as the rest of financial system,
which will bring great privileges, but also greater responsibility.
CRYPTOCURRENCY
respective platforms have all the semblance of a Ponzi scheme, this similarity
will be treated anon. Owing
to the fact that Crypto-currencies transcend traditional Sovereign jurisdictions,
financial regulators globally, have diverse opinions and approaches on the
phenomenon, and are struggling to agree on market standards, amid fears of
crypto-currency bubble.
and four other regulatory bodies jointly issued the Notice on Precautions
against the Risks of Bit-coins (the Joint Chinese Notice). In an Echo of the
IRS ruling, the Joint Chinese Notice defined Bitcoin as a virtual commodity and
found that it was not a currency, and therefore should not be circulated and
used in the Market as such. Banks and payment institutions in China may not
deal in bit-coin but the Central Bank clarified that it was not prohibiting
trading in crypto-currencies, however, it is apparent that the Chinese investor
interest in Bit-coin has been tempered. In September, 2017 the Chinese
government quickly moved to ban Initial Coin Offering (ICO), viewing them as
illegal means of financing. It also launched an investigation into 60 local
platforms dedicated to managing them; South Korea Followed suit, introducing an
ICO ban later that month. It is however an entirely different story in many
other developed economies with strong legal frameworks, including Australia,
Canada, the European Union, Hong Kong, Singapore, the United Kingdom and the
United States. Regulators in these jurisdictions are now looking to treat a
coin that functions like a security in a similar way as it would be under their
existing domestic securities laws. Japan, an early adopter of ICOs, has
more than ten regulated bit-coin exchanges, controlling a large chunk of global
market. A key topic in various jurisdictions is to try to put ICOs under the
umbrella of the Local Securities laws, but there is no best practice yet
globally. Recent survey has revealed that ICOs are looking to avoid being
defined as a security, so trying to regulate them seems to conflict with the
purpose of ICOs and Crypto-currencies. Such inconsistency is breeding
uncertainty among marketers.
in two forms: various enforcement actions and the issue of investor advisory
notices. Recent actions indicate that even in the absence of new regulations
specifically addressing crypto-currency, the SEC has significant existing
authorities to regulate a wide range of matters involving bit-coin. The first
SEC enforcement action relating to crypto-currency occurred in July 2013, when
the SEC charged Trendon Shavers of Texas with defrauding investors in
Bit-coin-denominated Ponzi scheme. Shavers, the founder and the operator of
Bit-coin savings and trust, offered and sold bit-coin-denominated investments
online, raising at least 700,000 Bit-coins in what was allegedly a Ponzi
Scheme. In September, 2014, a US Federal Judge found that the SEC established that
the Company was a Ponzi Scheme, and ordered Bit-coin Savings and Trust and
Shavers to Pay a combined $40.7m. In so finding, the court held that the
Bit-coin investments at issue qualified as investment contracts and securities
under the Securities Act of 1933, as amended, and the Exchange Act of 1934, as
amended. The finding that Bit-coins are properly treated as securities is
likely to have broad implications in the future. In conjunction with the civil
enforcement action, SEC issued an investor alert at the same time, warning
investors of the dangers of Ponzi schemes and other potential scams using
crypto-currencies. In the alert, SEC expressed its concern that heightened use
of crypto currencies may entice fraudsters to lure investors into Ponzi and other
schemes in which these currencies are used to facilitate fraudulent or simply
fabricated investments or transactions.
including suspension of companies using mobile platforms to facilitate bit-coin
trading. However, the New York department of financial Services (NYDFS)
has adopted one of the most aggressive stances when it comes to
crypto-currencies, and it became the first state in the US to propose a robust
regulatory framework for crypto-currencies. In 2014 the NYDFS requested
proposals from firms to set up regulated exchanges from crypto-currencies all
in a bid to strengthen oversight including robust standards for consumer
protection, cyber security and anti-money laundering compliance.
amendment to its proceeds of crime (Money Laundering) and Terrorist Financing
Act that will treat crypto-currency as Money service businesses for the
purposes of the Canadian Anti-money laundering law. As a result, companies
dealing in Crypto-currencies will be required to register with the Financial
Transactions and Reports Analysis Centre of Canada, implement compliance
programmes, maintain records, report suspicious or terrorist-related property
transactions and determine if any of the customers are politically exposed
persons.
regulatory framework (to the best of the writer’s knowledge) with respect of
crypto-currency. Although during the MMM saga the MPC issued a statements
warning members of the public not to be vulnerable to Money-doubling Ponzi
Schemes which are unapproved and unregulated by the CBN, this includes the
numerous Bit-coin related investments which are fast emerging in Nigeria
promoted by some Nigerian based platforms and some foreigners
alike. In a whole, there is a consensus across the various
jurisdictions that crypto-currencies are susceptible to all manner of crimes
because Bit-coin transactions can be very difficult to trace, and often cross
multiple legal jurisdictions, it is hard for law enforcement to track or seize
criminal profits. The FBI has published its concerns about Bit-coin,
particularly the lack of regulation for offshore services that may be used by
criminals as a safe haven for criminal conduct. Albeit, so the attraction
to the numerous investing public is not diminishing, this perhaps increases the
conundrum associated to the subject matter. click this link to
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Nigerian Code of Corporate Governance 2018: necessity or superfluity? | Teingo Inko – Tariah
corporate governance legal framework in Nigeria began in January, 2013 when a
Steering Committee on National Code of Corporate Governance was commissioned to
harmonize and unify all existing sectoral codes in Nigeria. Consequently, in
2016, the Financial Reporting Council of Nigeria (FRCN) published a draft
3-part National Code of Corporate Governance for the private, public and the
non-profit sectors in line with sections 11(c), 50 & 51 of the Financial
Reporting Council of Nigeria Act, 2011. The code for private sector was
mandatory but did not specify any commencement or effective date. The non-profit
sector code was stated to commence on October 17, 2016 on a “comply or justify
non-compliance” basis while that of the public sector was to take effect upon
the receipt of an executive directive from the Federal Government without a
specified approach in terms of operation and application. Related blog posts on
the 2015 code can be found here and here.
that trailed the provisions of the 3-part 2015 code including conflict with
existing law, the code was suspended by the Ministry of Industry, Trade &
Investment, the supervising Ministry for the Financial Reporting Council of
Nigeria pending a “detailed, review, extensive consultation with stakeholders
and reconstruction of the Board of the Financial Reporting Council”.
Consequently, the Nigerian Stock Exchange issued a circular on suspension of the frc code of corporate
governance.
2019, the Vice-President of Nigeria, Prof. Yemi Osinbajo and the Minister for
Industry, Trade & Investment, Dr. Okechukwu Enelamah unveiled the Nigerian
Code of Corporate Governance 2018. Below are some highlights of the content of
the new code.
code is to institutionalize corporate governance best practices in Nigerian
companies and to promote public awareness of essential corporate values and
ethical practices that will enhance the integrity of the business environment.
It is expected that by adhering to the principles articulated in the Code,
companies will demonstrate a commitment to good governance practices thereby
increase transparency, trust and integrity, and create an environment for
sustainable business operations. Consequently, this will rebuild public trust
and confidence in the Nigerian economy, thus facilitating increased trade and
investment.
The Code is applicable to companies of varying sizes and complexities
across industries/sectors. This will include public and private companies. The
Code recognizes existing sectoral codes viz:
Code of Corporate Governance for the
Telecommunication Industry 2016, issued by the Nigerian Communications
Commission (replaced 2014 NCC Code);
Code of Corporate Governance for Banks and
Discount Houses in Nigeria 2014 issued by the Central Bank of Nigeria (replaced
2006 CBN Code);
Code of Corporate Governance for Public
Companies in Nigeria 2011 issued by the Securities and Exchange Commission
(replaced 2003 SEC Code);
Code of Good Corporate Governance for
Insurance Industry in Nigeria 2009 issued by the National Insurance Commission;
and
Code of Corporate Governance for Licensed
Pension Fund Operators 2008 issued by the National Pension Commission.
not specify whether or not these codes would be subject to its provisions or
would be applied side-by-side with them. Worthy of note also are the recently
released codes of Corporate Governance by the Central Bank of Nigeria in 2018 for
Bureau De Change operators, Primary Mortgage Banks, Finance Companies,
Micro-Finance Banks, Development Finance Banks and Mortgage Re-finance
companies. These codes have been tailored to suit the various types of
financial institutions mentioned but there is no mention of these new set of
codes released by the Central Bank of Nigeria.
principles based ‘Apply and Explain’ approach which requires companies to show
how the specific activities undertaken by them best achieve the outcomes
intended by the principles of the Code. Thus, companies are expected to adapt
the principles to suit their type, size and growth phase.
parts: A – F, 28 principles and over 200 recommended practices. Each Part deals
with a broad aspect of corporate governance which is broken into principles and
recommended practices as follows:
Directors and officers of the Board
management, internal & external audit, whistle-blowing
shareholders – General meetings, continuous dialogue, equitable treatment and
shareholder protection.
with Ethics – values, conflict of interest, etc.
attention to sustainability issues including environmental, social,
occupational, community health and safety.
disclosure.
Implementation
the responsibility of monitoring implementation of the Code. This will be done
through sectoral regulators and registered exchanges who are empowered to
impose appropriate sanctions based on specific deviation noted and the affected
company. In addition, the FRCN may conduct reviews on implementation of the
code where deviations recur and adopt other monitoring mechanisms as a result
of such reviews. Where necessary, the FRCN in consonance with relevant
regulatory agencies may issue corporate governance guidelines to aid
implementation of the Code in line with sectoral peculiarities.
Corporate Governance appears to have deviated from the original goal of
harmonizing and unifying all existing sectoral codes in Nigeria. Rather, the
2018 code adds to the number of existing codes of corporate governance in
operation as listed above. However, since the 2018 code will operate more of a
principles than rules based approach, unlike the 2015 code, companies may not
face an additional burden of penalties and sanctions for deviation from the
code.
2018 code has adopted a different approach from the rules based model as there
are no express sanctions for non-compliance. There seems to be some uncertainty
as to the model of corporate governance to be adopted. Most of the sectoral codes
are rules based with sanctions for non-compliance. It is believed that this
will impact on implementation and assessment.
implementation of the 2018 code will fare especially as the FRCN hopes to work
through other regulators and exchanges in this regard. The Securities &
Exchange Commission has an existing code and currently, this forms the basis
for assessment of the corporate governance parameter of the index created by
the Nigerian Stock Exchange in conjunction with the Convention on Business
Integrity (CBi). The telecoms, financial and insurance sectors, among others,
also have codes of corporate governance.
Director of the FRCN reportedly stated that
the codes of Corporate Governance by the Central Bank of Nigeria and Securities
and Exchange Commission will serve as guidelines when the 2018 code takes
effect in January 2020, there is no clear expression in the code of how it will
stand with the existing sectoral codes in terms of which will supercede where
there is a conflict. Moreover, there are other sectoral codes not mentioned.
Will the regulatory bodies or exchange implement this new code of corporate
governance along with their respective codes? How feasible is it to implement
and monitor compliance with two parallel codes?
of codes may end up becoming a burden for companies on one hand and for
investors who wish to gauge their integrity and accountability on the other
hand. It may be necessary to have some form of harmonized system to standardize
corporate governance best practices in Nigeria. In the alternative, the new
code could be made applicable to companies other than those with sector
specific codes.
of the 2018 Nigerian Corporate Governance Code here nccg 2018
NBA Institutes Technical Committee For Planning The 2019 Annual Conference
IP ABC: Question Of The Week
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Duties Of Company Directors
Many CEOs always wonder why they must have Directors when registering their companies, it’s their business right!! .
Because the Companies and Allied Matters Act (CAMA) states 1 person cannot register a business in Nigeria (2 or more), most small scale businesses just have a family member, spouse or friend join the Board of their companies.
Businesses should note that Directors can be much more than names on the forms CAC 2 and CAC 7. A Director who is invested in the growth of the company can play a big role in steering the business venture to success.
Directors can bring critical expertise, experience and contacts into the business. Most importantly a Director need not be a Shareholder and can sometimes even be a paid employee of the company. .
Will love to hear from you, why did you appoint the directors currently on your Board?