Need for a revamped CAC for competitiveness

There is no doubt that Nigeria is a great country. It is now a member of MINT and recently it was announced that it has overtaken South Africa as the largest economy in Africa. The richest man in Africa, who is listed in Forbes is a Nigerian.

Equally, the richest woman in Africa is a Nigerian. It is the most populous nation in Africa and its Income Per Capita has increased substantially.

What other evidence of greatness does any person want? One of the positive outcomes of these recent developments is that the international community now sees Nigeria as one of the best emerging markets to invest in.

Greatness however comes with responsibilities. There is no where in our economic life that our short-coming is first exposed to foreign investors, other than the Corporate Affairs Commission. Nigeria cannot seriously wishes to be a major player in the international economic system in the 21st century, when it has a Company registry that still operates a 19th century model.

I started conducting professional business at the CAC in the early 90s and in those early days it was fun. However, after sometime I began to notice that the quality of the service was going down the drain and the CAC registry was gradually becoming like ‘Oyingbo’ market, so I decided to stop going there. For several years, I sent my work to CAC through colleagues.

One other reason I stopped was that I was increasingly finding myself disagreeing with the processes and procedures foisted on service users, which had no root in the Companies and Allied Matters Act. Throughout this period of absence, the story I heard from my colleagues were unpalatable.

However in 2010, I decided to visit the registry again, just to see things for myself. This time around, the open registry was like Oshodi bus stop in Lagos, prior to the Fashola administration. Most of the staff had become de facto CAC agents, without being accredited.

For most of the time, there was no one to attend to you, as the staff were busy running around to complete their ‘clients’ assignments. They actually went out of their way to frustrate you, especially if they knew you came from outside Abuja, particularly Lagos.

Indeed, as the 2.00 pm deadline approached, the looks on their faces were: “it is either you use our personal service or you will end up going back to Lagos without completing your assignment.” It was after my 2010 visit that I decided that service users of CAC – Lawyers, Accountant and Chartered Secretaries – must do something about CAC, before it is too late.

So many things are wrong with the CAC but I will just draw attention to a few:
CAC Forms
I do not know who designed the CAC forms, but one thing I do know however is that they must have been designed with little or no thought put into them. Some of the columns are either totally irrelevant or downright meaningless. While in some forms, useful columns are either too small or totally omitted.

Furthermore, the forms are expensive. In the 21st century it makes no sense to ask service user to buy forms, carrying some funny rubber stamps, whose origins are of doubtful validity.

Until recently, CAC refused to accept for filling, forms printed from CAC website. The standard instruction from staff at the open registry was that (I hope it has now changed) you must go and buy hard copy forms that carry the rubber stamps of CAC.

Recently, I sent some forms which I printed from CAC website to CAC for filling but they were rejected on the basis that they were not hard copy forms carrying the rubber stamps of CAC. I took the issue up with the Registrar-General, who initially ignored my letter. He only responded when I threatened in my second letter to take the matter to his Board of directors.

Happily, in his response, he confirmed that it was not the policy of CAC to reject forms printed from its website, provided they are printed with colour printer. I believe the demand to print forms in colour is unnecessary but I will leave that for another day.

I decided to take up the issue relating to the form because I was fed up with having to argue at all time with staff at the registry, who are either oblivious of the provisions of CAMA or just being mischievous. Secondly, I found it amusing that in the 21st century, where companies are now routinely incorporated online in most countries in the world, CAC will not accept forms printed from its own website. I thought it was scandalous.

The issue regarding Form may seems trivial, for me however, it was a fundamental issue, as my clients had in the past lost important business deals due to non-availability of incorporation forms. As a lawyer that acts for clients that live in different part of the world, sometime getting forms across to them can be a huge challenge.

Not too long ago, I was in the process of incorporating a company, with promoters resident in Nigeria, UK and the USA and it posed serious logistics challenge for me. As I was out of the country at the time, I had to ask someone to buy Form from Lagos and sent same to me outside Nigeria, at considerable costs and time.

As a company lawyer, I usually stock-up on incorporation Forms but like most things, sometime they do run out. Sometime ago, a group that I was advising was in Holland for a business meeting with a potential technical partner for a new project in Nigeria.

As the discussion progressed, it became necessary that a new company would have to be incorporated for the joint venture, due to local contents legislation, among others and the Dutch partners were happy and ready to sign.

Of course, we could not get incorporation Forms to the Dutch partners immediately to sign, as the position of CAC at the time was that it would not accept Forms printed from its website.

After that meeting, the Dutch partners were no longer interested and that was the end of the business deal. Businessmen and women will tell you that striking a business deal is like being a blacksmith; you must strike the iron while it is hot.

In the UK, if you register a company online, you get your certificate of incorporation within one or two hours. If there are any queries, a staff will contact you by email immediately and you can respond by email or telephone to resolve the queries immediately.

If you choose to do paper filing, you receive your certificate within 5 working days by post and if there are queries, Companies House will write to you within 3 working days.

Interestingly, you do not need to go to Companies House or send somebody, as allransactions are conducted by post, phone or online.

In CAC, what do we get for the exorbitant fees we pay for services? Nothing. A couple of years ago, I paid N50,000 for same day incorporation to register a company that was required to bid for a contract but we did not receive the certificate until almost 2 weeks and it was with so much struggle.

CAC Registry
The CAC registry is a shamble. As previously stated, staff are more interested in sorting out their “clients’” matters than dealing with service users. Indeed, most of the time, there is nobody to attend to you. Documents are not safe and secured, as companies files are usually given to service users to conduct searches themselves. Sometime when you apply for searches, the relevant documents are not even in the file.

I still cannot understand why over 20 years after CAC was established, online filling system has not been set-up? Information Technology is no longer rocket science. It is very easy to set-up these things nowadays. In the absence of online filling, why can’t document be sent to CAC by post or by courier? For several years now, I have been doing business with the Companies House in the UK and I have never been to the office of Companies House. I do all my work by post, telephone or online. Why is it that the CAC registry is like Oshodi bus stop?

More importantly, the staff are incompetent, discourteous and rude. Indeed, they are law unto themselves and they arrogate power to themselves which are not founded on the provision of CAMA. Recently, we filed an application to appoint a secretary for a company and the application was queried on the ground that the secretary was appointed by ordinary resolution instead of a special resolution.

We asked them to tell us the provision in CAMA that requires a secretary to be appointed by a special resolution but they could not. S.296 of CAMA is very clear on appointment of secretary and it provides for a secretary to be appointed by an ordinary resolution.

These are some of the issues that the management led by Mahmoud Bello should deal with. Nigeria deserves a better CAC, especially now that Nigeria has been recognised as one of the fastest growing emerging economies in the world. Let’s not wait until the foreign investors start coming before we take action.

Mr Omatsuli, a Legal Practitioner and a Solicitor of the Supreme Court of England & Wales is a commentator on Company law and Practice. Email: oworitse@yahoo.com