In Nigeria, business owners and managers list a “hostile business environment” as one of the top challenges for business in the country – changing government regulations is a top contributor to this hostile business environment.
With the unclear business protocol, multiple agencies handling multiple processes, and ever-changing government regulations and policies, businesses can easily find themselves swept up in the whirlwind that’s called “Nigerian business confusion”
These frequent changes and uncertainty can easily bring a fresh business to a surprising halt that was unplanned for.
With such a dynamic landscape, businesses have to anchor down by paying attention to the agencies and policies that affect their business.
Although this is not a full list, we did our best to list the agencies – along with their respective government regulations – and how they can affect your business.
We also included some tips on staying ahead of the curve.
Federal Government Regulations
Financing & Macroeconomic policies
Central Bank of Nigeria is in charge of the overall control and administration of monetary and financial sector policies of the Federal Government of Nigeria.
As the central financial institution, they have control over the foreign exchange reserves management and the exchange rate. This is very important for businesses that partake in international trade.
Keeping an eye on the policies that the CBN deploys and the levels in the country’s federal reserves are big determinants of Nigeria’s economic landscape and resilience.
CBN’s reserves and capital management provides confidence to the international community that the country is able to meet its external obligations.
The CBN also monitors the inflation rates which is a key factor in the interest rates on loans given by banks to business in Nigeria.
Resources to monitor government regulations on financing:
Official: Central Bank of Nigeria Website
Personal Favorites: Daily updates on macroeconomic policies from CardinalStone’s blog and newsletters keeps you in tune with what is going on in the market.
Trade & the Ports
The National Port Authorities and Nigerian Custom Services are two agencies to monitor because their government regulations and policies affect trade particularly when it comes to imports and exports of goods into and out of the country.
For instance, changes in government regulations could place certain products that are important in your value chain on this import prohibition list.
Policies by the Nigerian Port Authorities can also expedite or slow down the movement of goods through the ports.
To remain vigilant about these agencies and what they do:
Official: Nigerian Ports Authorities, Nigerian Customs Services
Personal favorites: The Ship & Ports blog and daily newsletter is a good resource for updates in Nigeria’s shipping and ports sector.
Product Registration – NAFDAC
Whether you are importing or manufacturing foods, drugs, medical devices, veterinary products, vaccines, or cosmetics in Nigeria, you will have to register your products with The National Agency For Food and Drug Administration and Control (NAFDAC).
Make sure you are up to date with all the new government regulations related to the registration and certification of these products. Here are the resources to watch for updates:
Official: NAFDAC Website
Personal favorites: LawPadi blog provides extensive legal procedures and guides on lawfully doing business in Nigeria including product registration.
Standards Organization of Nigeria
According to its quality policy, Standards Organisation of Nigeria (SON) is committed to providing standards and quality assurance services for all products, services, and processes in Nigeria in line with international best practices and to ensure continual improvement.
This agency is in charge of quality control for goods imported and manufactured in Nigeria. Their mandate includes “Designation, establishment, approval, and declaration of standards in respect of metrology, materials, commodities, structures and processes and the certification of products in commerce and industry throughout Nigeria”.
If you are going to be importing goods into Nigeria you might need a SONCAP registration and certificate.
Stay up-to-date and check the government regulations around the goods you are producing and importing to determine the appropriate product registration procedure:
Official: Standards of Nigeria (SON)
Company Incorporation
We should have started with this at the top of the list because if you are going to do business in Nigeria as a legal entity, you have to register your company with the Corporate Affairs Commission (CAC).
To expedite the registration of your company, get the assistance of a seasoned lawyer or law firm to walk you through the entire procedure.
Official: Corporate Affairs Commission (CAC)
Personal favorites: Here are the steps to registering a business in Nigeria – and the steps for incorporating a foreign subsidiary in Nigeria.
Employment & Labor
As you hire employees, make sure you are aware of all the government regulations around labor and the most recent employee rights policies.
For instance, there are certain fees to be paid on a yearly basis to the ministry of labor and employment to remain compliant as a licensed private sector operator. Stay current with these requirements:
Official: Federal Ministry of Labor and Employment
Personal favorites: Here are a few articles about employee rights on Law Padi.
Tax Government Regulations
It is very important to understand the tax liability of running a business in Nigeria, both to the states that you are operating in and to the federal government of Nigeria.
On a federal level, the Federal Internal Revenue Service (FIRS). After incorporating your company, you would have to obtain a Tax Identification Number (TIN) to be able to remit payments back to the federal government.
Changes in government regulations and policies regarding taxes affect all businesses in Nigeria.
It is important to monitor these changes to make sure your organization remains compliant:
Official: Federal Internal Revenue Service (FIRS)
Personal Favorites: Although geared towards large corporations, Nigeria’s Deloitte Tax blog is a good resource to follow for updates and thought-leadership on Nigeria’s tax regulations and how it affects businesses.
State-Specific Government Regulations
Government regulations and agencies vary from state to state.
It is important to be aware of any state-specific regulations in the state that you are operating your business in.
We will be focusing on Lagos States (other states will be added) – the commercial hub of Nigeria.
Lagos State
Taxes
The Lagos Internal Revenue Service (LIRS) is in charge of collecting internally generated revenue from businesses operating in Lagos.
Besides the tax obligations to the federal government, there are tax liabilities to Lagos state.
It is important to be aware of these tax liabilities and monitor any government regulation changes to make sure your organization remains compliant in Lagos:
Official: Lagos State Internal Revenue Service (LIRS)
Buildings, Land, & Environment
This is very important for businesses that have a physical location and representation.
Whether you have a retail space, a warehouse, or an office, being compliant is very important to avoid unexpected disruption to your operations.
There are a few agencies to be aware of in this field that is in charge of different regulations such as setting the standards on whether buildings are for residential or commercial purposes, determining environment & waste disposal responsibilities, or assigning liability for advertising signage attached to buildings.
To make sure you have all your bases covered, here are a few agencies to consult as you think about building or renting out space for commercial use:
LAWMA: Lagos Waste Management Authority is in charge of waste disposal at your premises.
LASEPA: Depending on whether your products are deemed hazardous or pollutants, Lagos State Environment Protection Agency determines a fee or liability that your company owes.
LASAA: For every visible advertising signs on your building, there’s a fee for each sign to be remitted to the Lagos State Signage & Advertisement Agency
Vehicles & Distribution
If you have a distribution fleet you want to make sure that your goods and vehicles are safe and meet all the standards.
Without the appropriate documentation, your operations could be interrupted by frequent stops on the road.
Reduce the interruption to your supply chain by getting your vehicles properly certified for commercial use.
Here are some of the major requirements for a commercial vehicle:
LASTMA: Lagos State Traffic Management Authority
Industry-Specific Government Regulations
Stay up-to-date with how the important stakeholders within your industry are shaping government regulations and policies by subscribing to news from industry-specific organizations.
For instance, the Manufacturing Association of Nigeria is the forefront organization that shapes decisions about boosting industrial development in Nigeria.
By following the specific organizations for your industry through news updates and attending conferences, you will be able to participate and contribute in shaping the government regulations for your industry and your business.
Here is a list of a few industry-specific organizations:
Manufacturing: Manufacturers Association of Nigeria (MAN)
Maritime Services: Nigerian Maritime Administration and Safety Agency (NAMISA)
Telecommunications: Nigerian Communications Commission
Power & Utilities: Nigerian Electricity Regulatory Commission
Oil & Gas: Nigerian National Petroleum Corporation
Aviation: Federal Airports Authority of Nigeria
Maritime: Nigerian Maritime Administration and Safety Agency
Automotive: National Automotive Council
These are just a few agencies. If we missed anyone else, please let us know. And we’ll continue to add to this list the more agencies we come across that are important to running a successful business in Nigeria
