OrderPaperToday – The Senate on Tuesday, considered and passed a bill seeking to amend the Nigerian Investment Promotion Commission (NIPC) Act, in order to protect Micro, Small, and Medium Enterprises (MSME) from unfair competition by foreign individuals or enterprises.
Sponsored by Senator Uche Lilian Ekwunife (PDP, Anambra Central), the proposed legislation is titled a ‘Bill for an Act to Amend the Provisions of the Nigerian Investment Promotion Commission Act Chapter N117, 2004 to Make Provisions for the Protection of Micro, Small, and Medium Enterprises (MSME) From Unfair Competition And For Other Related Matters.’
The bill scaled second reading in the Senate was first read on October 15th, 2020.
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According to the sponsor, the bill also sought to make provision for minimum foreign capital investment thresholds for foreigners willing to participate in some other areas of businesses with Nigerians.
“Unemployment rate in Nigeria increased from 23.1% in Quarter 3 of 2018 to 27.1% in Quarter 2 of 2020 and has moved to 35% as at the end of 2021. Similarly, the poverty rate in Nigeria stood at 40.1% at the onset of Covid-19 and has since increased to 42.8% as at 18th November 2021.
More so, it is logical to assume that a larger portion of Nigerian households and individuals that make up these numbers depend largely on Micro, Small, and Medium Enterprises (MSMEs) for survival.
“Consequently, this bill seeks to amend the Nigerian Investment Promotion Commission (NIPC), Act Chapter N117 LFN 2004, to protect that very critical sector of our nation’s economy from unfair competition.
Across countries, analyses revealed that Ghana with the Headquarters of African Continental Free-Trade, Liberia, and other African countries’ Investment Acts imposes restrictions on foreign ownership of or entry into certain business activities/enterprises, and make provision for minimum foreign capital investment thresholds on others.
Looking at the Legal Framework and Policy Documents of African Continental Free Trade Area (AfCFTA) to which Nigeria is signatory, it is imperative that we should be deliberate in legislationS relating to our trade and commerce.
“As a matter of policy and in liaison with various government agencies, we must begin to review our laws in such a manner that should place our country at an advantageous position within the world’s largest single market AfCFTA has become.
With the fact that the operationalisation of AfCFTA commenced on January 1, 2021, against the original dateline of July 1, 2020, which could not be actualized because of COVID 19, it has become most compelling that the passage of this amendment be fast-tracked,” she stated.
The clauses of the bill for amendment are Clauses 2 and 3 seeking to strengthen the composition of the Council of the agency.
Clause 4 deals with the real essence of the amendment, by highlighting the flaws in the principal Act.
“In the principal Act, Section 17 provides that “a non-Nigerian may invest and participate in the operation of any enterprise in Nigeria” except those on the ‘’Negative’’ list, which equally applies to Nigerians, as interpreted in Section 31 of the principal Act.
“The provision of section 17 of the principal Act, if not amended as canvassed here, then a foreigner who chooses, can practically go into ANY form of business in Nigeria, including retail sales of Garri, Suya or Akara, without any form of restrictions or control.
Clause 5 seeks to enforce compliance with due process in business registration processes.
Clauses 6 and 7 deal with some aspects of responsibilities of all tiers of Governments of the Federation.
“The purpose of this amendment has been clearly defined here, and the outlined is devoid of complexities. The provisions are consistent with the mandate of the Nigerian Investment Promotion Commission; and in particular, this Bill does not in any way add financial burdens on Government, rather in a short run, it is going to yield revenue to Government.
In addition, the proposed amendments as presented here, will go a long way in protecting Nigerian-owned MSMEs and help boost local entrepreneurship. Finally, the amendment would help mitigate the high unemployment rate in the country,” Ekwunife mentioned.
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In supporting the bill, Senator Barau Jibrin (APC, Kano North) stated that the MSMEs are the largest employers of labour in the country, adding that any legislation geared towards protecting them should be welcomed.
Deputy President of the Senate, Ovie Omo-Agege, who presided over Tuesday’s plenary referred the bill to the Committee on Establishment for further legislative inputs.