Author: The Nation

In this article, two Associates of Pinheiro LP Aanuoluwapo Babalola and Stephen Jones identify and analyse the steps Nigeria is taking to adequately address the problem of taxation of NRCs.

Taxation is a vital stream of revenue generation for Nigeria and in order to maximise this, there has to be valiant provisions to ensure the country generates enough revenue into her coffers. Taxation is the imposition of levies and financial obligations on citizens and corporate entities. Taxation revenue includes companies’ income tax, customs and excise duties, value-added tax and personal income tax.

For decades, Nigeria’s mainstream revenue has been through the trade of crude oil, until the oil crisis in 2014, which led Nigeria into an economic recession. Before then, the country had long neglected other viable sources of income (such as taxation, particularly the taxation of digital companies.) To salvage the prevailing negative economic position at the time, the regulatory authorities directed their minds towards tax optimisation which shift has resulted in the enactment of the Finance Act 2020 (FA 20). The FA 20 has widened the tax net by imposing taxes on the activities of Non-Resident Companies (NRCs) that generate income from Nigeria. This article will focus specifically on the taxation of (NRCs) carrying on business in Nigeria and the practicability of the laws, by examining whether or not the purpose and intent of the legislature are realistic and achievable.

Non-Resident Companies

NRCs are foreign companies which are not domiciled/incorporated in Nigeria, although carrying on business in Nigeria or having the intention to carry on business in Nigeria.

The challenges faced with the taxation of NRCs are not problems specific to Nigeria, but a worldwide conundrum and there have been concerted efforts to tackle this. The Organisation for Economic Co-operation and Development (OECD) is currently leading multilateral efforts to address tax challenges from digitalisation of the economy.

In the interim, we would be dedicating the remainder of this article to identifying and analysing the steps Nigeria is taking to adequately address the problem of taxation of NRCs.

First, Section 78 (1) of the Companies and Allied Matters Act No. 3, 2020 (CAMA) mandates that NRCs having the intention of carrying on business in Nigeria shall take all steps necessary to obtain incorporation as a separate entity in Nigeria for that purpose, but until so incorporated, the foreign company shall not carry on business in Nigeria or exercise any of the powers of a registered company.

Section 78 (2) of CAMA goes on to provide that any acts of NRCs in contravention of the incorporation mandate is void. It is the opinion of the author that the purpose and intent of these provisions is to ensure that through incorporation in Nigeria, the NRCs fall within the ambit of section 55 of Companies Income Tax Act Cap. C21 (CITA) which mandates every company in Nigeria to at least once a year without notice or demand therefrom, file their audited accounts, as well as tax computations. It ensures that through incorporation, NRCs become taxable in Nigeria.  Examples of NRCs that comply with these provisions include Standard Chartered Bank, Domino’s Pizza, Shell Nigeria, Texaco, KPMG, amongst others.

In reality, there are NRCs who carry on business in Nigeria without registration/incorporation, thereby not paying tax in Nigeria. Examples of such companies include Netflix, Spotify, Twitter, YouTube, among others.

There have been three (3) main enactments by legislators to mitigate the loss of tax revenue that Nigeria suffers as a result of this tax leakage, these are namely: CITA, the Finance Act 2019 (FA 19) amendments, and the further amendments by Finance Act 2020 (FA 20). These will be dealt with individually.

Companies Income Tax Act (CITA)

Section 13 (2) of CITA was the first provision with the aim of imposing tax on companies other than Nigerian companies. It provided thus:

The profits of a company other than a Nigerian company from any trade or business shall be deemed to be derived from Nigeria-

(a)  if that company has a fixed base of business in Nigeria to the extent that the profit is attributable to the fixed base;

(b) if it does not have such a fixed base in Nigeria but habitually operates a trade or business through a person in Nigeria authorised to conduct on its behalf or on behalf of some other companies controlled by it or which have a controlling interest in it; or habitually maintains a stock of goods or merchandise in Nigeria from which deliveries are regularly made by a person on behalf of the company, to the extent that the profit is attributable to the business or trade or activities carried on through that person;

(c) if that trade or business or activities involves a single contract for surveys, deliveries, installations or construction, the profit from that contract; and

(d) where the trade or business or activities is between the company and another person controlled by it or which has a controlling interest in it and conditions are made or imposed between the company and such person in their commercial or financial relations which in the opinion of the Board is deemed to be artificial or fictitious, so much of the profit adjusted by the Board to reflect arm’s length transaction.

CITA was enacted in 1977 and the provisions cited above did a good job in qualifying how a foreign company should be taxed at the time. The business landscape at the time of CITA’s enactment was very different as this was before the advent of the internet and other modern communication tools that made it easier for people and businesses to interact without being physically present in the same place. However, the growth of technology and ease of doing business has broken down a lot of barriers to entry in carrying on business.

The world has become a global village, as such companies are able to tap into different markets without being domiciled in that market. An example is Spotify, a digital music streaming service that gives its users access to podcasts and millions of songs. Spotify recently made its services available in Nigeria; its offering contains a specified pricing plan that takes into effect the economic position and buying power of its Nigerian target market. Spotify is not incorporated in Nigeria, nor does it have a fixed base/office in Nigeria, as such per the application of the CITA provisions cited above, the profits Spotify makes in Nigeria would not be deemed to be derived from Nigeria and therefore not taxable. This provision occasioned tax leakage in the light of technology advancements and thus needed to be amended.

Finance Act 2019

It is important to note that the Finance Act 2019 made amendments to CITA which took effect on                                                                January 13, 2020. The aim of the amendments pertaining to NRCs was to widen the categorisation of NRCs that will be taxable in Nigeria to reflect technological developments since the world becoming a global village. Section 4 of FA 19 introduced new provisions to section 13 (2) of CITA, it added new subsections (c) and (e):

The profits of a company other than a Nigerian company from or taxable in any trade or business shall be deemed to be derived from Nigeria-

(c) if it transmits, emits or receives signals, sounds, messages, images…to Nigeria in respect of any activity,…high frequency trading…to the extent that the company has significant economic presence in Nigeria and profit can be attributable to such activity;

(e) if the trade or business comprises the furnishing of technical, management, consultancy or professional services outside of Nigeria to a person resident in Nigeria to the extent that the company has significant economic presence in Nigeria.

These provisions, particularly (c) was added so that digital companies such as Spotify, Facebook, Twitter, YouTube, Netflix, amongst a plethora of others who operate in Nigeria without incorporation in Nigeria or having an office in Nigeria will become taxable in Nigeria.

The words “Significant Economic Presence’’ alluded to in the new provisions added by FA 19 was defined in Companies Income Tax (Significant Economic Presence) Order 2020 as where a NRC derives gross turnover or income of more than N25 million or its equivalent in other currencies from its digital operations in Nigeria in that year.

Section 3 of FA 19 also introduced a new provision which substitutes the provision of Section 10 of CITA. This new provision requires every company operating in Nigeria to obtain a Tax Identification Number (TIN) which shall be displayed by the company on all business transactions with other companies and individuals. Conversely, one of the requirements in obtaining TIN in Nigeria is a Certificate of Incorporation in Nigeria as well as other Incorporation documents. This requirement means NRC not incorporated in Nigeria would find it impossible to obtain TIN without first incorporating the company in Nigeria.

Finance Act 2020

The further amendments pertaining to NRC made by FA 20 to CITA focuses on how NRCs will pay tax. It provides thus:

1A) Where any company other than a Nigerian company derives profit from or is taxable in Nigeria under section 13 (2) of this Act, such company shall be required to submit a return for the relevant year of assessment containing:

1. a) the company’s full audited financial statements and the financial statement of the Nigerian operations, attested by an independent qualified or certified accountant in Nigeria;
2. b) tax computation schedules based on the profits attributable to its Nigerian operations;
3. c) a true and correct statement, in writing, containing the amount of profits from each and every source in Nigeria; and
4. d) duly completed Companies Income Tax Self-Assessment Forms:

Provided that in a year of assessment where a company other than a Nigerian company only earns income on which withholding tax is the final tax under this Act, the obligation to file a tax return in the manner prescribed shall not apply to such company in that year of assessment.

These provisions mandate that NRCs who derive profit from Nigeria shall submit financial statements of their Nigerian operations as well as the financial statements from every country in which it operates at least once a year to the Federal Inland Revenue Service. This is a clearly onerous and ambitious responsibility being placed on NRCs, especially as the aim of the legislation is to ensure that NRCs become easily compliant with the taxation requirements in Nigeria, as well as promote the ease of doing business in Nigeria which is one of the goals of the present administration as laid out by the Presidential Enabling Business Environment Council (PEBEC).

There is also the issue of ascertaining exactly how much revenue is derived from their Nigerian operations as well as ascertaining capital expenditure attributable to the Nigerian market, i.e. issues of determining the tax deductible expenses from the total accrued income. How an independent certified accountant in Nigeria can satisfy itself of the true position on the profits of NRCs generated within and outside Nigeria remains unclear.

What are the penalties for failure to comply?

Section 55(4) of CITA provides that any company that fails to comply with the time of filing returns shall be liable to pay as penalties:

(a) N25,000 in the first month in which the failure occurs; and

(b) N5,000 for each subsequent month in which the failure occurs.

To put these fines in perspective as it targets NRCs who more often than not transact in foreign currencies, a defaulting NRC would be liable to pay $200 per annum (based on current exchange rate) as penalties for failure to comply with the time of filing returns. This in the opinion of the author is pittance and does little or nothing as the deterrence it is intended to be.

Additionally, section 85(1) of CITA provides that if any tax is not paid within the period of assessment, a sum equal to 10 percent per annum of the amount of tax payable shall be added, the tax due shall also carry interest at bank lending rate. Interestingly, this provision also applies even where the NRCs have not submitted its tax filings as section 65(3) of CITA provides that:

Where a company has not delivered a return and the Board (Federal Inland Revenue Service) is of the opinion that such company is liable to pay tax, the Board may, according to the best of its judgment, determine the amount of the total profits of such company and make an assessment accordingly.

This means that even where a NRC does not file its returns, the Board may exercise its discretion in determining the taxable profits attributable to the NRC, using the best judgement assessment.

The penalties set out in section 55(4) of CITA has largely remained unchanged since 1977 and are shrouded in ineffectiveness and uncertainty, thereby making them pointless and/or inapplicable to the realities of NRCs.

Also to be noted is that a majority of NRC that fall under these new taxation provisions are companies that carry on business in other countries through a permanent establishment situated therein. As such, they might fall under the Double Taxation Relief (DTR) Orders Nigeria has with other contracting States which precludes them from paying tax in Nigeria as they have already paid tax in the contracting state. Nigeria currently has DTR with 14 countries, namely: The United Kingdom, Netherlands, Canada, South Africa, China, France, Philippines, Singapore, Slovakia, Czech Republic, Romania, Belgium, Pakistan, Italy, and all these treaties are comprehensive except that of Italy which covers Air and Shipping Agreements only. An example of a NRC that may fall under the DTR is Spotify. Spotify is domiciled and pays tax in the United Kingdom; based on this Spotify may be exempted from paying Companies Income Tax in Nigeria.

Is there a silver lining? (Conclusion)

These amendments are welcome improvements as they mean that the legislative arm of government are becoming pragmatic and not stuck in the old ways of doing things. However, there is a realisation that some of the provisions of the legislation might be difficult to enforce, or such enforcement would lead to more damage than good to Nigeria’s economy. For example, deciding to ban the operations of NRCs who do not comply with the taxation requirements in Nigeria would likely lead to more harm than good; there would be public outcry if the Federal Government decides to ban Twitter.

Also, there is no clear way to ascertain revenue generated in Nigeria vis a vis the capital expenditure on the Nigerian market. This therefore creates a clog in the way of enforcing taxation by non-resident companies.

The innovative amendments have done a good job in widening the tax net to account for the world becoming a global village and the changes in how companies operate. For example cryptocurrency and commodities trading platforms that operate in Nigeria such as Binance, eToro, and DriveWealth are now taxable in Nigeria. These platforms are a departure from the traditional way of trading commodities which required people going to registered stock brokers before they could trade stocks.

The applicability of the provisions has not been smooth sailing as the provisions impose onerous filing obligations on the NRCs. If the intention of the legislators were to make NRCs tax compliant in Nigeria, then the focus should be on the ways to make it easy for them to comply with the said provisions. For example, the requirements of NRCs to submit the company’s full audited financial statements from all territories in which it operates and the financial statement of the Nigerian operations should be eased; NRCs should only submit the full audited financial statement of its Nigerian operations.

The legislators were relying on the good faith and integrity of the NRCs to willingly comply with the taxation requirements. However, business owners operate a cutthroat culture and expecting them to willingly submit to paying tax is akin to viewing the world through an unduly idealistic, optimistic, or wistful perspective. Whilst the theoretical part of the provisions sounds good, its application has failed to live up to expectations.

Overall, the improvements made to CITA are laudable as they seek to plug the hole of tax leakage and will increase the revenue generated from tax in the country. This is however the first iteration of such policies, therefore there are bound to be areas for improvement. Subsequent iterations would seek to cure the oversight and/or lack of proper structure occasioned by its implementation.

The OECD leading multilateral efforts to address tax challenges from digitalisation of the economy would create a consensus-based solution thereby evicting the need for Nigeria to act unilaterally.

Recommendations:

To further strengthen Nigeria’s drive towards taxation of NRC, we recommend:

• That regulatory authorities particularly the FIRS engage with relevant stakeholders to clarify grey areas of implementation.
• That the relevant regulatory agencies draw up clear and implementable strategies which would prevent tax evasion by NRCs.
• Investment in the creation of a central database for all companies operating physically and digitally in Nigeria in order to harmonize information.
• Upward revision of the penalties provided for default to file returns to meet present commercial needs.
• The requirements for obtaining TIN should be eased specifically for NRCs. The requirement of CAC Number/Certificate of Incorporation should be removed for NRCs in order to encourage compliance.

Babalola and Jones are Associates of Pinheiro LP

 

 

Afolabi Cassandra Adeola, an Intern with Directorate of Research and Policy Analysis, Institute for Peace and Conflict Resolution (IPCR), Abuja writes on the state of insecurity affecting the country contending that weak institutional frameworks, weak and poorly funded military establishments, inequality and absence of fairness and justice, unemployment and ethno-religious rivalry must be addressed effectively for stability and growth.

Section 14(2) of the 1999 Nigerian Constitution provides that “The security and welfare of the people shall be the primary purpose of the Government”. The safety of citizens and the protection of their human rights is paramount. On April 21 2021, unidentified gunmen attacked a private University in Kaduna State killing a staff and kidnapped an unknown number of students, days later remains of three of the kidnapped students were found dead in a village close to the university. The gunmen haven’t been found, the other students haven’t been rescued.

The above mentioned attack is just one amongst the several crimes being orchestrated in the Northern parts of Nigeria by bandits. Over the past few years, the state of insecurity and level of safety has degenerated. Lives are lost daily, most businesses are in comatose, the population is being depleted, investments are diminishing and unemployment is soaring high.

There have been countless reports of kidnapping, armed robbery incidents on high ways, inter-communal farmers-herders conflicts, various assaults and killings on citizens regardless of class and other inter-ethnic tensions all over the nation. The insecurity paranoia is beginning to affect every inhabitant of the country and citizens are realising that the government cannot effectively guarantee the security of their lives and properties.

These security issues have significantly gotten worse and they can be traced to several fundamental issues. One, weak institutional framework ridden with corruption resulting in the inability/incapacity of the government to provide basic necessities for the Nigerian people, this has prompted a multitude of frustrated people who resort to violence at the slightest incitement or opportunity. Because of this situation, the crime rate shoots up and the security of lives and properties are no longer guaranteed.

Secondly, ethno-religious conflicts, this exist when the social relations between members of one ethnic or religious group and another of such group in a multiethnic and multi-religious society is characterised by lack of cordiality, mutual suspicion and fear, and a tendency towards violent confrontations to settle grievances. These conflicts have also revolved around who gets what and how in the state especially as it concerns the distribution of scarce resources. This particular situation forms the etiology of the conflicts between farmers and herders in the Benue valley, which has now extended to the eastern and western parts of the country.

Thirdly, military and paramilitary establishments and the Police force under federal control are weak institutionally, heavily politicised and poorly funded thereby leaving the nation’s security compromised. Funds also allocated to the states for security are siphoned for other purposes, leaving the citizens unprotected against criminals.

Fourthly, the growing awareness of inequalities, and disparities in life chances which leads to violent reactions. A general perception of marginalisation exists by a section of people in areas of government development policies, political patronage which in turn leads to resentment of the government and revolt.

All of these have attributed to the security challenges we are currently facing in the country. Consequently, they have resulted in a plethora of issues that are adversely affecting the economy and socio-economic development of the nation. The inability of the government to provide a safe and secure environment for persons to conduct business has amounted to low foreign investment rates and also difficulty in sustaining local businesses. It has occasioned a rise in unemployment rates and the shutdown of several businesses.

The agricultural sector in the country has also been affected, the herdsmen and farmers conflict in the different parts of the country have resulted in the displacement of farmers and their families, destruction of farmlands and farm produce resulting in an increase in prices of food items nationwide. Currently, agricultural and economic activities in the North-East have seized as a result of terrorist activities.

The state security agents who are saddled with the responsibility for the security of life and property which include- the police, state security service, the military, immigration and correctional services have all performed poorly in the discharge of their duties. These security problems had obviously defied the capacity and competence of the existing security apparatus and infrastructure in the country. The state security agents have been overwhelmed by the increasing nature of threats to our collective security and national well-being.

The poor performance of the Police Force has led to the lack of public confidence for the institution, Nigerians constantly live in fear and majority have resolved to form local or community vigilantes to protect themselves against attacks by criminal gangs and bandits.

During the last quarter of 2020, a movement began in the country by youths to end police brutality perpetrated by a particular unit of the Nigeria Police Force (SARS) and to necessitate the review and reform of the entireNi geria Police Force, to make them more responsive and accountable in dealing with the current security issues in the country. Little has been done by the government to effect these changes to reposition the police force to meet the security challenges.

Nigeria’s situation is a paradox where the country is over-policed and under-secured. The policing system is plagued with several operational issues. In the words of Mohammed D. Abubakar (former Inspector General of Police), he states that

“The Nigeria Police Force has fallen to its lowest level and has indeed become a subject of ridicule within the law enforcement community and among members of the enlarged public. Police duties have become commercialised…Our men are deployed to rich individuals and corporate entities such that we lack manpower to provide security for the common man. Our investigations departments cannot equitably handle matters unless those involved have money to part with. Complainants suddenly become suspects at different investigation levels following spurious petitions filed with the connivance of police officers. Our police stations, State CID and operations offices have become business centres and collection points for rendering returns from all kinds of Squads and Teams set up for the benefit of superior officers. Our Special Anti-Robbery Squads (SARS) have become killer teams, engaging in deals for land speculators and debt collection. Toll stations in the name of check-points adorn our highways with policemen shamelessly collecting money from motorists in the full glare of the public.” These issues have been overstated and reiterated countless times but actions from the government to solve these issues are still lacking.

It is possible to link the unprecedented rise in violent crimes and the alarming new dimensions of organised terrorist activities to corruption and bad governance. The government often appears indifferent about these issues and the nature of response to conflict management is often slow & misdirected. The overall stance of the government towards security issues are weak. For instance, the rehabilitation of the arrested members of the Boko Haram (the terrorist group plaguing the North-east). It is confusing what these measure seems to accomplish. It is trite law that where a crime has been perpetuated, such crime is to be punished according to law so that justice will be deemed served. This punishment often serves as a form of deterrence for others in the society. Now when a non-deterrence measure is being adopted “to stabilise the region” and it proves not effective and does not curb the prevalent crime, would it be wise to still continue with such non-deterrence measures. Putting in consideration that measures to stop the recruitment of citizens into these terrorist groups have not been adopted and measures to limit the activities of this terrorist group to the barest in this region has not also been adopted yet the government is asking the victims of these terrorist attacks to accept them into the community even as they struggle to heal and rebuild. Can this act by the government be likened to justice for the survivors of the brutal terrorist attacks?

The government has continued to trudge on in the face of this daring challenge and has continued to evolve strategies to contain or douse this conflagration rather than put an end to them infinitely. The importance of putting the citizens first in planning the development of the nation cannot be overstated.

On regional and state levels, security outfits have been launched and deployed to deal with security challenges. In as much as this is a step in the right direction, these security outfits exist only to assist the Nigeria Police Force. However, where the Police Force is plagued with fundamental issues that affect their performance, it is not expected for these steps to amount to reasonable and quantifiable results. The government needs to act strategically, taking into consideration policing systems in other developed countries and adopting other conflict resolution methods as opposed to the use of force towards putting an end to insecurity in the country.

It is important to point out that if the issue of weak institutional frameworks, weak and poorly funded military establishments, inequality and absence of fairness and justice, unemployment and ethno-religious rivalry are not addressed effectively, the state of insecurity will continue to degenerate and give rise to an unstable economy which will stifle national development and growth.

• Adeola is an Intern, Directorate of Research and Policy Analysis Institute for Peace and Conflict Resolution (IPCR), Abuja.

By Adebisi Onanuga

The executive of the Nigerian Bar Association (NBA) and branch chairmen have been urged to ensure full participation and support in the forthcoming SPIDEL Annual Conference taking place in Ibadan between May 23 and 26, 2021.

Chairman, NBA Section on Public Interest and Development Law (NBA-SPIDEL), Prof. Paul Ananaba (SAN) made the appeal in a letter written to the bar leaders.

He said the conference will hold May 24 at the popular Jogor Event Centre and declared open by Governor Seyi Makinde of Oyo State.

The theme of the conference is “The Role of Public Interest in Governance in Nigeria.”

The sub-themes included: “The Imperatives of Public Interest in Governance in Nigeria; Internal Security: A Prerequisite for National Development; Legality and Efficacy of Public Inquiry Panels by State Governments; Legality and Efficacy of Regional Vigilantes; When the State Truly Defends: assessing the role of the Office the Public Defender Lagos State; Anti-Corruption Model: Assets Declaration and Public Access; Showcase Session for NBA: Public Interest Litigation Committee – Broadening the strategy for NBA’s Intervention in Public Interest Lawyering” among others.

Prof. Ananaba listed those to speak at the conference to include the Vice President, Prof.  Yemi Osinbajo (SAN); the Chief Justice of Nigeria (CJN),  Justice Tanko Muhammad ; Justice Eko Ejembi of the Supreme Court of Nigeria, Speaker of House of Representatives ,  Femi Gbajabiamila, President of the Senate, Senator Ahmed Lawan; Governors  Makinde , Rotimi Akeredolu (SAN), Dr Bala Mohammed and Engr. Dave Umahi  of Oyo, Ondo, Bauchi and Ebonyi, States respectively.

He listed others who have confirmed their attendance to include Senator Ibrahim Shekarau and Senator Shehu Sani: Prof Pat Utomi; Prof Festus Emeri (SAN); ICPC Chairman, Prof  Bolaji Owasanoye (SAN); Oyo State Attorney General, Prof. Oyelowo Oyewo (SAN); former Chairman, National Human Rights Commission (NHRC)Prof. Chidi Odinkalu; Ogun State Attorney General, Mr. Gbolahan Adeniran; NBA Board of Trustees Chairman, Dr. Olisa Agbakoba (SAN); Mr. Austin Alegeh (SAN); Mr. Paul Usoro (SAN); Dr. Babatunde Ajibade (SAN); Chief Bolaji Ayorinde (SAN); Mr. Kemi Pinheiro (SAN).

Others are former Solicitor General, Lagos State,  Mr. Lawal Pedro SAN; Mr Muiz Banire (SAN), Mr J.S. Okukpeta (SAN), Mr Afam Osigwe (SAN),  Attorney General  of Lagos State, Moyosore Onigbanjo (SAN); Mr Seun Abimbola (SAN, Ms Hafsat Abiola and leading human rights lawyers such as  Femi Falana (SAN); Chief Mike Ozekhome (SAN); Mr. Ebun Adegboruwa (SAN) and Mr. Jiti Ogunye, .

Others are Executive Secretary, NHRC, Anthony Ojukwu , Aisha Yesufu, Liborous Oshoma and Mr. Opunabo Inko-Fariah.

He said the legislature will be represented by  Senator Enyinnaya Abaribe, Senator Ike Ekweremadu, Senator Dino Melaye, Oyo State House of Assembly Speaker, Rt. Hon. Adebo Ogundoyin and his Lagos counterpart, Rt. Hon. Mudasiru Obasa.

The Chief Host is the NBA President, Mr. Olumide Akpata while NBA-SPIDEL Chairman, Prof. Paul Ananaba SAN is the Host.

Ananaba said the ancient city of Ibadan is already wearing a new and beautiful look as a result of the tremendous effort being put in place by the current administration to deliver the dividends of democracy to the people.

“Therefore, we are poised to have a beautiful conference in an atmosphere of peace and tranquility. In fact, Governor Makinde has been emphatic in assuring delegates thus: “We will ensure that you have a very good experience”, he assured.

He urged members wanting to register for the conference to click on the link http://nbaspidel.ng/nba-spidel-conference/.

The 2021 Annual Conference of the Nigerian Bar Association (NBA)  Section on Legal Practice is scheduled to hold between June 13 and 16, 2021 in  Uyo, Akwa Ibom State, Nigeria.

The theme of this year’s Conference is “Law, Lawyers and the Next Generation”.

NBA Chairman on SLP, Olusegun Abimbola (SAN) said the focus of the conference is to periscope the journey of the bar over the years as a nation of laws, the role of lawyers, and chart the course for a desirable future for the next genre of laws, and generation of lawyers.

It is also to prepare for a wonderful conference experience with exciting business sessions, inspiring speakers, and the warmth, attractions & cuisine of Akwa Ibom, ‘’The Land of Promise’’.

Abimbola requested lawyers to contact  fadekeslp@gmail.com or baderemi@nba-slp.org for further information on the programme.

 

By Robert Egbe

The African Bar Association (AfBA) has described any unconstitutional overthrow of government as an international crime that would only lead such individuals to misery.

It warned that it could also reverse such a country’s socio-political and economic gains.

AfBA president Hannibal Uwaifo stated this while reacting to the recent attempted military interference in the government of the Niger Republic.

The government of Niger said that on March 31, 2021, it thwarted an attempted coup d’é·tat just days before the inauguration of its current president Mohamed Bazoum.

Armed attackers tried to seize the presidential but were fought off by the presidential guard.

The democratic transfer of power in the country, which is prone to coups, won international praise, but Mr Bazoum’s rival Mahamane Ousmane rejected the result of the election.

Uwaifo said: “Military take-over of the government of Niger Republic is not acceptable and will not be tolerated anywhere in Africa.

“We are alarmed that despite the laudable efforts of the institutions of governance in the Republic of Niger to sustain democratic governance and take the country to the next stage of global recognition as a peaceful democratic country, some renegade military officers are planning to take the country back to anarchy”.

He called for proper investigations of the culprits for punishment according to law.

“We commend the government of Niger for swiftly bringing the situation under control and call for a thorough investigation to identify the perpetrators of this crime and their sponsors for the maximum punishment allowed by the law.”

TITLE:
Fundamental Rights(Enforcement Procedure) Rules, 2009:
Practice, Procedure, Forms and Precedents.

AUTHOR:
CHIEF OGWU J. ONOJA, SAN.

PUBLISHER:
BAR & BENCH PUBLISHERS LIMITED.

VOLUMES:  1 AND 11

PAGES:  1,046 PAGES.

COVER PRICE:    N50,000.00

YEAR OF PUBLICATION:    2020.

DATE OF PUBLIC PRESENTATION:  MARCH 19, 2021.

ISBN NO: 978-978-985-403-5.

REVIEWER:       
PROF. OFFORNZE D. AMUCHEAZI, (SAN).

INTRODUCTION

It is indeed a great honour and privilege to be invited to review the book written by my learned colleague and an outstanding leading legal practitioner, Chief Ogwu J. Onoja, SAN. The book titled “Fundamental Rights (Enforcement Procedure Rules), 2009″ which we gather to witness its public presentation is largely unrivalled by any work on human rights in Nigeria.

The book analyses and simplifies fundamental issues relating to procedures, proceedings, jurisdiction and enforcement of fundamental rights in Nigeria and applicability of international instruments on human rights in Nigeria. It is remarkable for its clarity, rigorous analysis and examination of complex issues involved in human rights.

His writing style is simple and easy to comprehend.

Chief Onoja is a fine legal mind. He has the inestimable advantages of a committed scholar – fine and brilliant legal mind, the facility of language and the ability to raise and explore fundamental issues that other writers often fail to consider.

He examines issues with a combination of sophistication and dexterity rare to find among lawyers in litigation.

Clearly evident all through the book is the resourcefulness, vitality, and enthusiasm of an enquiring scholar deeply committed to the task of using the law to make society better.

The book, Fundamental Rights (Enforcement Procedure) Rules, Practice, Procedure, Forms and Precedents, is an assemblage of a richly researched work and I commend the author for the painstaking and diligent research he has put into this work. As the Chief Justice of Nigeria, Hon. Dr.  Justice Ibrahim Tanko Muhammad, CFR,  stated in his foreword:

“This book is both engrossing and handy. The book in its experimental and expository sense is a model text on the subject of procedure for the enforcement of human rights. It is recommended as a reference material and ready companion for practising lawyers, the law enforcement agents, academics, law students and persons interested in advancing the course of human rights”

The book is divided into two volumes of three parts.

DISCUSSIONS

Part 1 contains in-depth discussions on the Preamble and fifteen (15) Orders of the FREP Rules, 2009.

 

PREAMBLE

The inclusion of Preamble in the FREP Rules, 2009 is the first major difference with the 1979 Rules. The preamble, though not forming part of the Rules, encapsulates the principles and general intendment of the fundamental rights enforcement rules. It urges the courts (and equally admonishes parties and their representatives to assist the courts) in giving full effect to the overriding objectives of the Rules. Part of the overriding objective of the Rule is an expansive and purposeful interpretation of Chapter 4 of the 1999 Constitution and the African Charter on Human Rights. The objective also includes respecting municipal, regional and international instruments on human rights.

This preamble established the essence of the Fundamental Rights Enforcement Procedure (FREP) and x-rays the duties of stakeholders (the court, practitioners and the parties) in realising the objectives of the FREP. The author painstakingly examines the duties of the lawyer to the court, as ministers in the temple of justice, using the provisions of the Rules of Professional Conduct, 2007, particularly, section 30 & 32 to drive home his point.

 

ORDER I – Application &Interpretation

The author in analysing Order 1 of the FREP Rules, 2009 reminded

Lawyers and courts on the use of rules of interpretation and the need to always resort to case laws, in interpreting its provisions where the need arises in FREP application.

 

ORDER II – Commencement of Action

The author brought his legal prowess to bear in his expository of the provisions of Order II of FREP. The book enumerated with the help of case laws what amounts to cause of action by FREP and what ought not to be included as a cause of action.

The book focuses more on the inclusion and applicability of the provisions of the  African Charter on Human and Peoples’ Rights (Ratification &Enforcement) Act, Universal Declaration on Human Rights and a host of other international instruments on human rights. The author explicitly outlines what constitutes a cause of action and stated thus; P. 59, paragraph 2. –

“thus, it is respectfully submitted that the right of action available under the FREP rules, 2009 are as sanctioned by the provisions of Chapter IV of the 1999 Constitution, the African Charter on Human and Peoples’ Rights… the various international protocols on human rights of which Nigeria is a signatory and the case laws which are the decisions of superior courts on cases on fundamental rights in Nigeria”.

He went on to enumerate rights protected under the 1999 Constitution, rights protected under the African Charter, etc using the appropriate sections and articles for easy reference.

 

ORDER III – Limitation of Action

The book highlights a major difference between the FREP Rules, 1979 and FREP Rules, 2009 which is the expulsion of time limitation for instituting an action under the  FREP Rules, 2009.

The author notes that “under Order II Rule I of the annulled 1979 FREP rules, time was a limitation period of 12 months from the occurrence of the breach complained of within which an applicant could bring an application for leave to enforce his fundamental rights, except the delay could be explained to the satisfaction of the court, the right to institute and action would be extinguished”.

 

ORDER V – Service of Court Process

The author elucidated on the issue of service of court process and application for substituted service of court processes as provided by the FREP Rules, 2009. Even though the FREP, Rules, 2009 does not provide for electronic service of court process, the author makes a compelling analogy on the use of electronic means of service using the provision of various court Rules.

 

ORDER VI- Deals with Amendment of Statement & Affidavits.

 

ORDER VII – Consolidation of several applications relating to the same Infringement.

This order deals with procedures for making an application for consolidation. The author examines the conditions that must be met by the applicant before an order for consolidation may be made or granted. This part of the book is a compelling manual for any applicant or respondent rooting for consolidation. It is a guide to lawyers and saves the time of the court, lawyers and litigants.

 

ORDER VIII – Notice of Preliminary Objections Disputing the Courts Jurisdiction.

In discussing   Order VIII of FREP, 2009, the author examines the conditions that have to be fulfilled before a preliminary objection is granted or refused.

 

ORDER IX – Effect of Non-Compliance

Order ix is at variance with the provisions of the 1979 FREP rules which allowed technicalities to be used to strike out an application based on non-conformity with the rules. Under the 2009 rules, non-conformity does not go to the root of the application as it is seen as a mere irregularity

 

ORDER X – Application to Quash Proceedings

The book, with the help of decided cases, explains and expatiates on the essence and meaning of order X and the rule therein.

ORDER XI –Order which the Court May Make.

The orders which a court may make are discussed here. These include an order of injunction, Habeas Corpus, Mandamus etc.

 

ORDER XII – Hearing of the Application.

The Order dealt extensively on written address, adoption of same, oral arguments and content of written addresses. It is a comprehensive guide for lawyers before and after filing a fundamental right application.

ORDER XIII – Right of any Person or Body to be Heard

This Order is a class departure from the provisions of FREP rules, 1979. The FREP rules, 2009 expanded the category of persons and bodies that can be heard whether they filed processes or not. The capacity to appear on behalf of a person, group/class is also energised by this order.This includes provisions for the appearance or presentation of Amici Curiae in fundamental right cases.

ORDER XIV – Committed for contempt

ORDER XV – Transitional provisions.

 

PART II

This part deals with contemporary issues of enforcement of fundamental rights. It provided materials and guides on the use of Garnishee Proceedings in the enforcement of FREP Rules, 2009. It further discussed issues such as:

-Derogation and limitation of fundamental rights under the 1999 constitution.

– Power of the Police, EFCC and other law enforcement agencies to investigate and prosecute crimes.

– Virtual or remote proceedings

– COVID-19 practice directions and guidelines

– Ruling on mock virtual court proceedings.

Part two of the book depicts the entire book as a compendium on application and adjudication of Fundamental Human Rights applications with the inclusion of the following:

–  a complete sample of FREP application,

– Chapter IV of the 1999 Constitution as amended

– Fundamental Rights (Enforcement Procedure) Rules, 2009

-African Charter on Human and Peoples’ Rights

-Universal Declaration of Human Rights.

 

PART III

Part three of the book presents us with the opportunity of reading the mind of the court through a replication of Federal and State High Courts judgements/rulings on FREP applications.

 

CONCLUSION

The learned author has presented before us with a series of in-depth analysis and a working manual for both lawyers and the court on Fundamental Rights Enforcement in Nigeria. The end product, of course, is a timely, innovative and insightful work of very high academic quality that is conceptually and empirically rich and well researched. It is my hope that this book will prove to be of great significance to the legal community. It is therefore for this reason that I recommend this book to academics, judges and legal practitioners with an interest in human rights.

 

By John Austin Unachukwu

The Institute of Chartered Mediators and Conciliators ( ICMC) has declared  its  readiness to work with stakeholders for the promotion and mainstreaming of mediation in international commercial disputes.

ICMC President Dr. Agada Elachi stated this in a goodwill massage  sent to the signing of a  Memorandum of Understanding between Guangzhou Arbitration Commission (GAC),  Swiss Chinese Lawyers Association (SCLA) and Geneva International Disputes Institute ( GIDI).

Elachi said the MoU was momentous, and an expression of economic expansion and growth between nations, notwithstanding the COVID-19 pandemic and allied matters.

He noted that a corollary of such economic progress is commercial dispute particularly on an international scale.

Elachi said: “As a practising mediator and arbitrator, I wish to emphasise the very important role that Alternative Dispute Resolution mechanisms such as Mediation and Arbitration play in ensuring that commercial disputes are resolved in a timely, efficient, and effective manner. The same can be said for international commercial disputes.

“With regards to global economic growth and expansion, I commend the increased economic relations and collaboration between Nigeria and China. Whilst I have never visited China, I have seen quite a lot of the industry and resilience of the Chinese in the role that they currently play in the economic space in Nigeria.”

He added that it is natural that there will be disputes in the course of such engagements.

Elachi noted that the Nigeria-China Bilateral Investment Treaty provides for arbitration as a dispute resolution mechanism.

He reasoned that the time had come to mainstream mediation in such engagements particularly in the light of the Singapore Convention on enforcement of settlement agreements reached via mediation and the development of the ICSID Mediation Rules as it relates to Investor-State Disputes.

“As the largest body of mediators in Africa, ICMC is a strategic partner and is available to work with other stakeholders like the signatories today for the promotion and mainstreaming of mediation and other processes for the resolution of international commercial disputes’’, he said.

Elachi added: “On behalf of the 10,000 plus members of the Institute of Chartered Mediators and Conciliators (ICMC, Nigeria), I congratulate the Guangzhou Arbitration Commission, Swiss Chinese Lawyers Association, and the Geneva International Dispute Institute on this auspicious occasion of the signing of the MoU, signifying a willingness to collaborate between all signatories.”

 

By Adebisi Onanuga

The Nigerian Bar Association (NBA) has concluded a Memorandum of Understanding (MoU) with Leadway Assurance Plc which enhanced the insurance products and benefits for all financial members of the association.

The development is  part of the efforts of the leadership of the NBA to ensure improved welfare of members of the association.

The association has also opened negotiation with National Health Insurance Scheme (NHIS) to provide insurance cover for members.

No fewer than 1,000 of its members will benefit in the pilot  health insurance scheme.

NBA National Publicity Secretary, Dr Rapulu Nduka gave details of the deals in a statement.

Under the MoU, all lawyers who paid their Bar Practice Fee (BPF) on or before  March 31, 2021 will, at no extra cost, have access to  N2 million as Life Insurance cover representing a 100 per cent increase from what obtained in the past.

The details of the MoU also provided that lawyers who suffer any ailment that qualifies as critical Illness under the policy will get N1 million as benefit and a further N1millon payable if the member unfortunately passes on.

The MoU between the two parties also provided for “ N1million for accidental permanent disability, with a further N1millon if the member unfortunately passes on; N60,000 to cover any medical expenses related to accidents; and free telemedicine access for lawyers with medical doctors approved by Leadway.

Similarly, the NBA is in advanced its negotiations with the NHIS to provide insurance cover at discounted rates, for members of the association who subscribe to the scheme.

To kick-start the NBA-NHIS Health Insurance Scheme, the NBA will, as a part of the pilot phase, be paying the health insurance premium for 1,000 lawyers selected from all branches of the NBA by a team led by the Chairperson of each Branch.

A statement by the Welfare Secretary, Kunle Edun, said the scheme was introduced in line with Section 3(12) and (13) of the NBA Constitution and further to the NBA President’s agenda to improve access to healthcare for its members.

Edun explained that the scheme seeks to provide free health insurance to 1,000 financial members of the association, for a period of one year, as a prelude to the subsequent enrolment of all members into the NHIS at concessionary rates.

He said all branches of the NBA are to nominate four  members, who meet the eligibility criteria prescribed by the NBA, to participate in the pilot scheme.

Of these four beneficiaries, two  shall be young lawyers between one to seven years post call and shall not be over 30 years of age) while two  shall be senior lawyers who are 60 years of age and above.

All branches, he explained, are required to constitute a branch selection committee comprising of the the Chairman (Chair of the Committee);  Welfare Secretary (Secretary of the Committee) and a nominee of the NBA President.

According to Edun, the branch selection committee shall be responsible for nominating beneficiaries under the scheme who meet the eligibility criteria prescribed.

The eligibility criteria included payment of BPF and branch dues for the year 2021; he or she must be acknowledged by the branch as a member who is unable to afford medical insurance; must  be in good standing with the association; and must furnish the branch with his/her blood group and genotype.

He said branches with membership strength of 500, 1,000, 1,500,  2,000, 2,500, 3,000, 3,500,4,000, 4,500, 5,000 and above are entitled to nominate additional beneficiaries of 2, 4 , 6, 8, 10, 12, 14, 16, 18 and 20 respectively.

The NBA fixed May 4 as deadline for the submission of list beneficiaries and all supporting documents  at ezekiel.david@nigerianbar.org.ng.

He said disqualification of a nominated beneficiary from the scheme will be as a result of failure by the member to meet the eligibility criteria as specified;  failure by the branch selection committee to submit the branch nominee form on or before the stipulated deadline; and failure by the branch selection committee to properly execute the branch nominee submission form.

“In the event of a disqualification as a result of the occurrence of any or all of the aforementioned events, the affected Branch shall lose the opportunity of selecting any other beneficiary and the national Secretariat shall nominate a beneficiary to fill the resultant vacancy”, he stated.

 

Cryptocurrency (also known as crypto), a digital currency, has created a headache for regulators. Widely embraced by youths, its potential for money laundering and terrorist financing has led to a ban. But is crypto all bad? What are the pros and cons and regulatory prospects? Legal, financial and anti-corruption experts examined these and more at a virtual conference organised by the Presidential Advisory Committee Against Corruption (PACAC). Deputy News Editor JOSEPH JIBUEZE reports.

The older generation may struggle to comprehend the concept of an artificial means of exchange that cryptocurrency is.

The idea of a virtual currency, or virtual money, which is issued and controlled by its developers and used among the members of a specific virtual community, may appear far-fetched.

But, cryptocurrency has come to stay. Nigerians have embraced it.

Cryptocurrency is a digital currency in which transactions are verified and records maintained by a decentralised system using cryptography, rather than by a centralised authority.

Decentralised cryptocurrencies, such as bitcoin (a type of digital currency), provide an outlet for wealth that is beyond restriction and confiscation.

Cryptocurrencies work using a technology called blockchain – a decentralised technology spread across many computers that manages and records transactions.

Simply put, a cryptocurrency is a type of currency that uses digital (invisible) files as money.

Usually, the files are created using the same methods as cryptography (the science of hiding information).

Part of the appeal of this technology are its security and anonymity. But these are the sources of worry for regulators and anti-corruption agencies.

Last October, a UsefulTulips report stated that $32.3 million worth of bitcoin was traded in Nigeria.

According to Paxful, a leading peer-to-peer bitcoin marketplace, Nigeria has the world’s second-largest Bitcoin trading volume.

It says Nigerians have traded 60,215 Bitcoins in the last five years, or more than $566 million.

While its potential is huge, there are associated dangers. These were highlighted by speakers at a virtual conference organised by the Presidential Advisory Committee Against Corruption (PACAC).

The event, with the theme: Global trends in cryptocurrency: opportunities and risks, featured legal, financial and anti-corruption experts drawn from the Senate, Ministry of Finance, Ministry of Justice, Central Bank of Nigeria (CBN), the anti-corruption agencies, regulatory agencies and the private sector.

 

Sagay: We have enough problems

PACAC Chairman Prof Itse Sagay (SAN) believes Nigeria already has enough problems to contemplate sanctioning the official use of cryptocurrency.

He said: “From its name crypto, it is not available to those who are not directly concerned with it. We have a currency that exists only notionally, that is, in the mind or on the internet.

“Cryptocurrencies are merely notional, perpetually invisible. They are creatures of the computers and the mind, which can be used as objects of crime, including money laundering.

“Why are we tolerating the operation of that type of system in our country? We have enough problems already with our highly regulated currency, the naira.

“Why tolerate an unregulated, secret, abstract digital-only currency so susceptive to criminal and illegal usage? Don’t we have enough problems already?”

Sagay called for a multi-pronged approach to ensuring that an appropriate legal and regulatory framework is designed and adopted to mitigate the associated risks.

Sagay got the backing of the National Assembly in that regard.

Chairman, Senate Committee on Anti-Corruption and Financial Crimes, Suleiman Kwari, said the National Assembly “would drive any needed legislation that will help regulate the use of cryptocurrency”.

Represented by his aide Mr Ashley Emenike, the Senator said: “The National Assembly is well aware of the dangers and potentials in the use of cryptocurrency.

“The areas of money laundering/disposal of the proceeds of crime, the financing of terrorism and the application of blockchain, cryptocurrency and distributed ledger technologies where all these transactions can take place without a trace, are of concern to the committee.

“The Financial Action Taskforce has mandated its members to implement a programme where sharing of cryptocurrency business-related transactions and other financial intelligence units will be made possible in our region.

“Knowing that up to $4billion was transacted in Europe alone, the Euro report says that 40 per cent of illicit/corrupt transactions in the EU were carried out using cryptocurrency.

“We welcomed the CBN directive that naira and kobo are the symbols of our sovereignty and the issuance of the directive that all banks and other financial institutions do not use, trade or transact in digital or virtual currencies.”

Kwari said there was a need “to urgently develop a national framework for robust regulation of the use of cryptocurrency”.

He said there was also the need to look at “the possible legislation to grant the anti-corruption agencies oversight on its spreading applications.

“We’re urging law enforcement agencies and the CBN to work in partnership in the formulation of a joint operation strategy that would mitigate any adverse effect of the criminal deployment of these digital technologies that can harm our national interests.

“No time will be wasted in putting legislative frameworks in place to enable the regulation and application of these cryptocurrencies,” Kwari said.

 

‘A double-edged sword’

Head of Cybercrime at the Economic and Financial Crimes Commission (EFCC), Lagos, Mr Dein White, said law enforcers globally are faced with the “geometric nature” of crime evolution driven by information technology.

“We find ourselves as law enforcement agents always playing the catch-up game. Virtually every facet of a crime seeks to have as its main objective a pecuniary gain through the laundering of the proceeds. Cryptocurrency has presented a unique opportunity for this to happen,” he said.

White likened the cryptocurrency to a kitchen knife, which can be deployed for useful and sinister purposes.

“The purpose for which cryptocurrency is used is what characterises it as good or bad. We cannot talk about potentials without risks within those potentials. So, it presents itself as a double-edged sword,” he said.

Highlighting the potential, he also pointed to its merits such as speed, anonymity, and low transaction cost.

The cybercrime expert explained that cryptocurrency transactions are peer-to-peer. In effect, no transaction charges go to intermediaries (banks).

He said: “Someone recently exited the cryptocurrency market with $1.3billion worth of cryptocurrency in 47 seconds. The processing charge only cost $80.

“Place that side by side with regular bank transactions. It will cost a lot more for that transaction to happen.

“The regulatory bottlenecks that will be faced from the originating point of that transaction to the end will not make it impossible to conclude it in such a record time. This also provides convenience for the person using it.”

But the potential for secrecy means stolen funds can easily be hidden.

White said: “At the same time, cryptocurrency poses a risk where the intention is to launder proceeds of crime. Cryptocurrency has opportunities that create risk in themselves.”

According to him, the mandatory regulatory requirements that ought to address money laundering, terrorist financing, tax evasion and different forms of fraud are largely not applicable to cryptocurrency.

On the risks of the obscure nature of crypto, White continued: “One of the major components is anonymity.

“Within the classes of tokens, there is the privacy coin, one of which is the monero (a privacy-focused cryptocurrency released in 2014).

“When a transaction has gone through, and it becomes part of an investigation, during audit and review, if you try to trace the trail of a transaction, which of course has different levels of anonymity within the value chain, you will see the public addresses of where it is coming from and where it is going to.

“But for privacy coins, it makes it almost bulletproof. You can hardly get even the least detail when queried.

“This anonymity is a threat because people seeking to launder or move large proceeds of fraud would not mind cutting their losses based on the current coin value of this particular coin, knowing that it provides a high level of privacy.”

The EFCC investigator said cryptocurrency also makes it easier to hide funds.

“There are coins you can purchase and the value will remain constant for as long as you let them be.

“Someone trying to hide funds can leave them there in a suspended animation state for as long as he wants till he decides to either trade or exchanges it for any other purposes.

“There is no recall option where money is wrongly transferred. In cryptocurrency, once a transaction has been consummated, it cannot be recalled. Such transactions are irrevocable at the point of transaction,” he said.

 

Fraud in the cryptocurrency realm

White said the Ponzi schemes can also occur in the world of cryptocurrency.

One of such scams, he said, is the pump and dump.

Scammers hype fake investment with huge returns. Victims invest, driving the price up. The scammers quickly sell their shares at a huge profit, causing the price to plummet (to fall very suddenly), leaving victims with worthless stock.

“They bring up new coins, they do social engineering to inflate the values of commodities and where people invest in them, when it gets to an all-time high, the owners pull out completely, leaving everyone in complete chaos,” he said.

White’s point that cryptocurrency markets remain a scammers paradise accords with current findings.

Academics at the University of Technology Sydney and the Stockholm School of Economics in Riga found 355 incidents of price manipulation across several cryptocurrency exchanges over a period of just seven months.

About $350m (£267m) of suspicious trading activity was linked to “pump and dump” scams that reaped an estimated profit of $6million for organisers.

The paper, published last August, concluded that the level of price manipulation in cryptocurrency is “unprecedented in modern markets.”

Another dangerous potential, according to White, is the ability to completely hide the nature of ill-gotten proceeds.

“There is a serious conversation on the need to balance the legitimacy and opportunities that cryptocurrency and blockchain hold and the regulation of their activities,” he said.

 

Way forward

Though the CBN has officially stopped banks from facilitating crypto trading, White believes more needs to be done.

He said: “The CBN has tried within its purview to stop financial institutions from dealing with ‘exchangers’ of cryptocurrency. It’s a laudable move.

“But as we saw during the #EndSARS protests, most people traded person-to-person in a Halala-style transaction format.

“They nominate where cryptocurrency would be converted to physical currency without going through any exchange other than just transferring the value between the cryptocurrency wallets and deciding where physical cash equivalent or service commodity of equal value will be delivered.

“There is a need to work around the framework of this regulation to beam more light on the person to person transactions within our jurisdiction.

“It is not an easy task because there are servers all over the world that play a critical role within the value chain of the consummation of transactions.

“It will take a lot but there might be some light at the end of the tunnel following what the UK and Canada are doing now.

“If we can look at some of these existing laws and policies that are slowly coming into the light, and try to tailor them to what we have here, as time goes on, we’ll be able to come up with something to reduce the excesses that cryptocurrency and blockchain present.”

 

‘Regulation needs innovation’

Mr Soji Apampa, the co-founder of the Convention on Business Integrity, which promotes ethical business practices, transparency and fair competition, noted that Nigerian youths now prefer to deal in cryptocurrency “and with good reasons”.

Quoting statista.com, he said Nigeria is the third-largest bitcoin trader by volume after the USA and Russia.

“Whether we regulate or not, agree with it or not, Nigeria is a top player. Nigeria is the eighth largest market by crypto adoption in the world after Ukraine, Russia, Venezuela, China, Kenya, the USA and South Africa.

“I agree with my brother from the EFCC that typically, regulation lacks innovation globally. Oftentimes, things spin faster than regulatory agencies can keep track of.”

Apampa underscored some of the factors that push youths towards cryptocurrency, such as disaffection with a banking system that creates few opportunities for them.

So, they would rather go for something that offers them returns.

“The inefficiency in the economy is also a factor. I think we need to look at those fundamentals because those are really what drive the adoption rate of cryptocurrency in the country,” Apampa added.

He emphasised that even if crypto is officially banned, it will only be driven underground.

Apampa added: “And it will become even harder to regulate and it will become even more attractive to the dark side of the web.

“So, we have to balance all of this to ensure we have some intermediate wins that help us to keep pace with the industry before we’re left behind.

“Most trades are notional and abstract. Even the notion of sovereignty is changing in the world today.

“I agree with the analogy of the knife, that it is at best neutral, and that it depends on whose hands it is.

“Therefore, it is imperative that we catch up on the regulatory side and in the understanding of the technology.

“I predict that governance systems, in the near future, will be underlaid with blockchain technology to hold public officers to account, which is one of the good potentials of blockchain technology, one of which application is cryptocurrency.

“The sooner we understand how to utilise it, the better for us because it is a global trend, and it was designed from the beginning to be out of the reach of the government.”