How Nigeria’s regulatory landscape will impact businesses in 2021

Nigeria has seen a surge of new laws and regulations in 2020, signaling the government's commitment to the ease of doing business and modernization. These changes are set to have a profound impact on businesses in the coming year. Zelda Akindele, Partner in the Finance Practice Group at Templars, joined CNBC Africa to discuss the key legislative developments and their implications on businesses for 2021. One of the most significant legislative changes in 2020 is the new Companies and Allied Matters Act. This act is expected to have far-reaching effects on both small and large businesses in Nigeria. For small and medium enterprises (SMEs), the act offers different options for structuring that may be more cost-effective, particularly in terms of share capital. Larger businesses will benefit from more efficient management and structuring opportunities. Additionally, the introduction of business recovery mechanisms provides hope for ailing companies, offering an alternative to immediate winding up. Another crucial development is the Federal Competition and Consumer Protection Commission's guidelines which have enhanced the commission's powers for regulating competition and consumer protection. The Central Bank of Nigeria (CBN) has also issued a series of circulars on various matters, including the regulation of microfinance banks and licensing requirements for payment service providers. These regulations are vital in light of the increasing number of digital banks and the evolving financial landscape. Furthermore, the fast-tracking of the Petroleum Industry Bills is set to revolutionize the industry with anticipated changes in governance, fiscal treatments, and overall operational clarity. While these bills are yet to be enacted, their expected passage in late Q1 or early Q2 of 2021 will reshape the oil and gas sector in Nigeria. The overarching message from the Nigerian government through these regulatory changes is a dual approach of facilitating ease of doing business while strengthening regulatory oversight. The government aims to streamline business operations by providing clarity on regulatory compliance while empowering regulators to ensure sectoral compliance and integrity. The focus is not just on improving the business environment for international companies but also on nurturing SMEs, recognizing their pivotal role as major employers and drivers of economic growth. These regulatory developments are indicative of the government's commitment to fostering a conducive business environment in Nigeria, albeit with a keen eye on regulatory compliance and sectoral integrity. The balancing act of promoting business growth while enhancing regulatory supervision sets the tone for businesses as they navigate the evolving regulatory landscape in 2021.