Introduction

Foreign nationals seeking to enter, work, or reside in Nigeria must meet the country’s Immigration Rules. The Nigeria Immigration Regulations on work permits are outlined in the Immigration Act 2015 and the Immigration Regulations 2017. The agency responsible for issuing work permits to aliens is the Nigeria Immigration Service.

Definition of work permit

Section 116 of the Immigration Act, 2015, defines work permit as a document that allows a non-Nigerian expert to reside and work in Nigeria for specified period of time.

The procedures and requirements for obtaining a work permit in Nigeria

These involve several steps and documents. Here are the processes:

  1. Expatriate Quota

In Nigeria, the Expatriate Quota (EQ) is a form of authorisation granted by the Ministry of Interior to registere businesses and firms to hire foreign nationals for particular positions. Quotas are assigned to the company, not the expatriate. When an expatriate leaves a company, the position reverts to the sponsor. The company may hire another expatriate as long as the quota position is still valid. The goal of the EQ is to ensure that the relevant technology and skills are imparted to Nigerians during the work duration.

  1. Application: The Company seeking to employ a foreigner must apply for an Expatriate Quota from the Ministry of Interior.
  1. Requirements:

To obtain an EQ, companies must submit the following documents:

  • Corporate Affairs Commission (CAC) Incorporation documents
  • Business Permit (not applicable for companies with 100% indigenous ownership)
  • Feasibility study report
  • Evidence of imported machinery (where applicable)
  • Lease agreement or certificate of occupancy of business premises
  • Latest tax clearance certificate of the company
  • Permit or Certificate from appropriate regulatory body (where the company is involved in oil services, health services, fishing, mining, or construction)
  • Proof of the completed job and the contract’s worth (if the business is involved in building, civil engineering, or construction)
  • Proposed annual salaries for the foreign workers
  • Comprehensive training programs for Nigerian understudies
  • Certificate of Capital Importation (not applicable for businesses with 100% indigenous equity)
  • Bank Reference Letter
  • Completed Immigration Form T1 fully filled out
  1. Approval: The Ministry of Interior grants the quota for a specific period, usually, for a period of three (3) years in the first instance, renewable biennially for two consecutive times within a lifespan of seven (7) years. After receiving positions on the EQ from the Federal Ministry of Interior, foreign employees must apply for a Subject to Regularization Visa from the Nigerian Embassy or diplomatic mission in their country of residence.

II. Subject to Regularization (STR) Visa

The Subject to Regularization (STR) visa is a single-entry visa granted to foreigners who have been invited to Nigeria for long-term employment or business. It enables the transfer of knowledge and expertise from competent expatriates to Nigerians, while also helping businesses grow and increase their operations.

  1. Application: The foreigner applies for an STR Visa from the Nigerian Embassy or diplomatic mission in their country of residence.
  1. Requirements:
  • Passport with at least 6 months validity
  • Completed visa form in quadruplicate with four recent passport photographs
  • Copies of the letter of Expatriate Quota Approval from Ministry of Interior
  • Copies of credentials, certificates, and curriculum vitae, all vetted by a relevant official of Nigerian High Commission/Embassy (English Certified translated copy where applicable)
  • Copies of offer Letter of Employment
  • Four copies of Letter of Acceptance of employment, signed by expatriate
  • Nigeria Immigration Service Visa Payment Receipt and Visa Acknowledge
  • Copy of university/professional qualification
  • Yellow fever vaccination certificate
  • HIV test report

The STR visa is provided for 90 days, during which the expatriate must apply to the Comptroller General of Immigration to regularize the residency and acquire a Combined Expatriate Residence Permit and Aliens Card (CERPAC).

III. CERPAC (Combined Expatriate Residence Permit and Aliens Card)

The Combined Expatriate Residence Permit and Alien Card (CERPAC) is a document issued to foreigners to legally live and work in Nigeria. It is a crucial document for expatriates who have been invited to Nigeria for long-term employment or business opportunities.

  1. Application: The foreigner must apply for a CERPAC, which is a long-term work authorization.
  1. Requirements:
  • Copy of Expatriate Quota Approval
  • International passport with STR visa endorsement
  • A duly completed CERPAC statutory form
  • An STR package containing STR documentation received from the Nigerian embassy/consulate
  • Company’s board of directors’ resolution confirming the appointment as director (where applicable)
  • Application letter from the employer requesting Regularisation of stay and accepting Immigration Responsibility (IR) on behalf of the expatriate
  • Letter of Appointment/Employment
  • Acceptance of the Offer of Appointment/Employment
  • Proof of Financial Capacity
  • Payment of Prescribed Fees
  1. Exemptions:

The following people are exempted from applying for CERPAC and are instead granted CERPAC Gratis:

  • Diplomats
  • Government Officials
  • Niger-wives
  • Non-governmental Organisations
  1. Issuance: Upon approval, the Nigeria Immigration Service (NIS) issues a green coloured non-transferrable card, referred to as CERPAC, which is a long-term work authorization.

IV. ECOWAS Residence Card

The ECOWAS Residence Card is a legal authorization issued to citizens of Economic Community of West African States (ECOWAS) member countries to live and work in Nigeria.

  1. Application: ECOWAS nationals must register with the Nigerian Immigration Service (NIS) in their place of residence after becoming resident in Nigeria.

Step-by-Step Process:

  • Visit the Nigeria Immigration Service (NIS) portal and fill out the online application form
  • Pay the required fees
  • Upload the necessary documents
  • Print the acknowledgment slip
  • Proceed to the NIS office for interview and verification
  1. Requirements:
  2. Application letter for the ECOWAS Residence Card made by the Individual/Employer/Embassy/High Commission/Diaspora Union accepting Immigration Responsibilities:
  • ECOWAS Travel Certificate or National Passport valid for not less than 6 months
  • Photocopy of bio-data page of ECOWAS Travel Certificate or National Passport
  • Two copies of applicant’s recent passport photograph
  • Evidence of e-payment i.e. printed payment confirmation page
  • Duly completed and signed application form

Additional documents for employed ECOWAS nationals:

  • Letter of offer of employment
  • Letter of acceptance of an offer of employment
  • Letter from Employer accepting immigration responsibilities;
  • Applicant’s Credentials/ CV where applicable;
  • Evidence of registration with professional bodies (if applicable)
  • Copy of ECOWAS Registration Certificate from LGA of Applicant’s domicile.
  1. Application letter for the ECOWAS Residence Card made by Business owners:
  • Valid ECOWAS Travel Certificate or International Passport;
  • Photocopy of Bio-data and Information page of Passport;
  • 2 copies of applicant’s recent passport photograph;
  • Evidence of e-Payment i.e. printed payment confirmation page;
  • Duly completed and signed Application Form;
  • Letter from Employer accepting immigration responsibilities;
  • Applicant’s Credentials/ CV where applicable;
  • Evidence of Lease/ Ownership of business premises;
  • Certificate of Incorporation of business name with Corporate Affairs Commission;
  • Copy of COT form;
  • Tax Clearance Certificate; and
  • Evidence of Capital Importation (where applicable).

Upon issuance by the Nigerian Immigration, the ECOWAS Residence Card is valid for work in Nigeria and serves as prove of residence in Nigeria.

V. Temporary Work Permit (TWP)

Temporary Work Permit (6 month) is a multiple-entry visa issued to experts invited by corporate bodies to provide specialised skilled services such as after-sales installation/commissioning/upgrading/maintenance/repairs of equipment and machinery, training/capacity building for Nigerian staff, and auditing of machinery/equipment and financial records. It is an authorised visa issued by the Nigerian Embassy with the approval of the Controller General of Immigration. The temporary work permit is valid for a maximum of 90 days from the date of issue.

  1. Application: The corporate body in Nigeria files a formal request to the Comptroller General of Immigration (CGI) on behalf of the expatriate.
  1. Requirements:
  • Passport valid for at least 6 months with at least 2 blank visa pages for endorsement
  • Formal application for R11 Visa from the Employer/ Institution accepting Immigration Responsibility
  • Letter of Offer of Appointment and Acceptance of Offer
  • Educational qualifications and Curriculum Vitae
  • Evidence of financial support
  • Any other document as may be requested by the Nigerian Immigration Service

VI. Business Visa

A business visa permits holder to undertake business, attend business meetings, business conferences, client meetings, create business partnerships, business meetings for a branch of another organisation or their own organisation, and so on but not to work. It is accessible to people of all countries except ECOWAS Nationals who do not need a visa to visit Nigeria and other countries that have entered into visa abolition agreements. Business Visa is valid for 90 days.

  1. Application: The foreign traveler applies for a Business Visa from the Nigerian Embassy or diplomatic mission in their country of residence.
  1. Requirements:
  • Passport with at least 6 months validity
  • Completed visa form in quadruplicate with four recent passport photographs
  • Copies of the letter of invitation from the Nigerian company
  • Copies of the itinerary of the trip
  • Payment of prescribed fees

Conclusion

The procedures and requirements for work permit in Nigeria are complex and involve multiple steps. Foreign nationals seeking to work in Nigeria must first obtain an Expatriate Quota from the Federal Ministry of Interior. 

This quota is issued to companies seeking to employ foreign workers. Once the quota is obtained, the foreign national can apply for a Subject to Regularization (STR) visa, which is a single-entry visa that allows them to enter Nigeria for a period of 90 days. 

During this time, they must apply for a Combined Expatriate Residence Permit and Aliens Card (CERPAC), which is a permanent residence and work permit. The CERPAC is issued by The Nigerian Immigration Service (NIS) and is valid for two years. Foreign nationals can renew the CERPAC for an additional two years, but they must first apply for an extension and provide the required documents.

A work permit is not necessary for certain jobs, such as those with the federal, state, or local governments, or for West African nationals registered with ECOWAS. If an employer fails to secure a legal work permit before hiring a non-Nigerian, both the employer and the employee may face fines or imprisonment.

Note: The content of this article is anticipated to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstance.

By Adeola Oyinlade & Co.

Adeola Oyinlade & Co.; a full-service law firm in Nigeria provides help and offers advisory to both local and foreign clients on immigration related matters including work permit and visas in Nigeria. 

Need help? Kindly contact us using the details below:

Email: info@adeolaoyinlade.com

Mobile: +234 803 826 7683 / +234 802 686 0247

The Central Bank of Nigeria (CBN) has launched a new online platform for submitting microfinance bank (MFB) license applications, known as the CBN Licensing, Approval, and Other Requests Portal. The new online platform replaces the previous laborious approach of physically submitting MFB license applications to the CBN. These are the steps to apply for an MFB license online.

  • Open a browser, input the URL https://larp.cbn.gov.ng/to access the application. On the navigation bar below, click on “Register”.
  • Select an “application type”, from the drop-down list above and then enter the proposed institution name (as reserved by CAC).
  • Enter the CAC Reservation Code.
  • Enter the Applicant details and submit the registration details. NOTE: If the proposed application name is already an existing financial institution, the system will not accept the name.
  • If the LGA of the proposed application is in a Tier 1 LGA location, you will be required to pay the minimum deposit based on the location of the proposed MFB.
  • If the LGA of the proposed MFB is not in a Tier 1 LGA location, you may select the Tier of the application you want to register the application.
  • The applicant’s email address must be verified. This will involve an OTP being sent to the applicant’s email address. After the verification, the user can continue with the registration process.
  • The applicant would be required to input the OTP that was sent to their email to complete verification to proceed.
  • The applicant would be required to check the “I agree with the terms of use” and click on register to complete the registration process.
  • Once the registration is completed, an email will be sent, and the applicant will be required to make payments for the Application Fee and the Minimum Capital Deposit at his preferred Bank within 72 hours.
  • Then see screenshot for the mail received upon registration:
  • Once the Bank has made your payment, they will give the applicant a printout. The applicant is expected to wait for 24 – 72 hours for the payment to be verified and approved by CBN. When the payment process has been completed, an email with the applicant username and default password will be used to log into the system.
  • Thereafter, the applicant will be prompted to change your password. Ensuring that the password consists of Uppercase, Lower Case, Number, Special Character, and it must be a minimum of 8 characters.

A Microfinance Bank in Nigeria is a specialized financial institution dedicated to providing affordable and accessible banking services to the unbanked and underserved portions of the population, particularly micro-entrepreneurs and small enterprises.

Microfinance Bank (MFB) is any company licensed by the Central Bank of Nigeria (CBN) to carry on the business of providing financial services such as savings and deposits, loans, domestic funds transfer and non-financial services to microfinance clients.

What are the specific objectives of the new microfinance policy?

The specific objectives of the microfinance policy are to: 

  1. Make financial services accessible to a large segment of the potentially productive Nigerian population which would otherwise have little or no access to financial services.
  2. Provide synergy and mainstreaming of the informal sub-sector into the national financial system.
  3. Enhance service delivery by microfinance institutions to micro, small and medium entrepreneurs (MSMEs).
  4. Contribute to rural transformation by mobilizing savings.
  5. Promote linkage programme between microfinance institutions (MFIs), Deposit Money Banks (DMBs), Development Finance Institutions (DFIs), specialized Funding institutions.
  6. Create employment opportunities and increase the productivity and household income of the economically active poor in the country, thus enhancing their standard of living.
  7. Promote a platform for microfinance service providers to network, exchange view and share experience.

Who can establish a Microfinance Bank?

Microfinance bank can be established by individuals, groups of individuals, community development associations, private corporate entities or foreign investors.

What are the regulatory and operational framework for microfinance banks?

Microfinance banks are among the specialised banks and other financial institutions governed by the CBN’s supervisory guidelines outlined in Sections 61-63 of the Banks and Other Financial Institutions Act, 2020 (BOFIA) (as amended) and Section 33(1)(b) of the CBN Act 7 of 2007. The following regulations govern the operation of Microfinance Banks in Nigeria.

  • Central Bank of Nigeria (CBN) Act 2007;
  • Bank and Other Financial Institutions Act 2020;
  • Central Bank of Nigeria Guidelines for the Regulation and Supervision of Microfinance Banks in Nigeria, January 2020.

How many categories of MFB licences are available?

There are four (4) categories available to promoters based on geographical spread:

  1. Tier 1 Unit Micro Finance Bank (with urban authorization): They are licensed to operate in banked and high-density regions, with a maximum of four (4) branches outside the main office within five (5) contiguous Local Government Areas recognized by the CBN. The minimum share capital for this type of licensing is N200,000,000 (Two Hundred Million Naira).
  1. Tier 2 Unit Micro Finance Bank (with rural authorization): They are licensed to operate solely in rural, unbanked, or underbanked areas and may open one (1) branch outside the main headquarters within the same Local Government Area. A Tier 2 Unit Micro Finance Bank has a minimum share capital of N50,000,000 (fifty million naira).
  1. State Microfinance Bank: This type of Microfinance Bank is permitted to operate in a single state or the Federal Capital Territory. It is permitted to open branches within the same state or FCT, subject to prior written approval from the CBN for each new branch or cash center. It may not open more than two branches in the same Local Government Area (LGA) unless it has established at least one branch or cash center in each LGA in the State. A newly licensed State Microfinance Bank cannot begin operations with more than ten (10) branches. State microfinance banks must maintain a minimum capital of one billion naira (₦1,000,000,000).
  1. National Microfinance Bank: This Microfinance Bank is authorized to operate in multiple states, including the Federal Capital Territory. A newly licensed National Microfinance Bank is prohibited from commencing operations with more than ten (10) branches. National microfinance banks must have a capital barrier of five billion naira (₦5,000,000,000).

What are the permissible business activities of the Microfinance Bank?

A Microfinance bank is allowed to offer the following services to its clients:

  • Acceptance of various types of deposits including savings, time, target and demand deposits from individuals, groups and association;
  • Provision of credit to its customers;
  • Provision of housing micro loans;
  • Provision of ancillary services such as capacity building on record keeping and small business management and safe custody;
  • Issuance of debentures to interested parties to raise funds from members of the public with the prior approval of the CBN;
  • Collection of money or proceeds of banking instruments on behalf of its customers including clearing of cheques through correspondent banks;
  • Act as agent for the provision of mobile banking, microinsurance and any other services as may be determined by the CBN from time to time, within the geographic coverage of its licence;
  • Appoint agents to provide financial services on its behalf in line with the CBN Agent Banking Guidelines, within the geographic coverage of its licence;
  • Provision of payment services such as salary, gratuity, pension for employees of the various tiers of government;
  • Provision of loan disbursement services for the delivery of the credit programme of government, agencies, groups and individual for poverty alleviation on non-recourse basis;
  • Provision of banking services to its customers such as domestic remittance of funds;
  • Maintenance and operation of various types of account with other banks in Nigeria;
  • Investment of its surplus funds in suitable money market instruments approved by the CBN;
  • Operation of micro leasing facilities, microfinance related hire purchase and arrangement of consortium lending;
  • Participate in CBN Intervention Fund and funds other sources;
  • Provision of microfinance related guarantees for its customers;
  • Financing agricultural inputs, livestock, machinery and industrial raw materials to low- income persons;
  • Investment in cottage industries and income generating projects for low-income persons as may be prescribed by the CBN from time to time;
  • Provision of professional advice to low-income persons regarding investments in small businesses;
  • Issuance of domestic commercial paper subject to the approval of the CBN;
  • Provide financial and technical assistance and training to microenterprises; and
  • Any other permissible activity as may be approved by the CBN from time to time.

What are the non-permissible business activities of the Microfinance Bank?

Microfinance banks are forbidden from providing the following financial services:

  • Foreign currency transactions, except foreign currency borrowings;
  • International commercial papers;
  • International corporate finance;
  • International electronic funds transfer;
  • Clearing house activities;
  • Collection of third-party cheques and other instruments for the purpose of clearing through correspondent banks;
  • Dealing in land for speculative purposes;
  • Dealing in real estate except for its use as office accommodation;
  • Provision of any facility for speculative purposes;
  • Leasing, renting, and sale/purchase of assets of any kind with related parties and/or significant shareholders (five per cent or more of the equity) of the MFB, without the prior written approval of the CBN;
  • Financing of any illegal activities; and
  • Any activity other than those permitted as stated above or as may be prescribed by the Central Bank of Nigeria from time to time.

What are the procedures and requirements for obtaining a Microfinance Bank Licence?

The application for a Micro-Finance Bank license will be made in three (3) phases, as follows:

  • Pre-licensing Presentation
  • Approval-in-Principle
  • Final License
  1. Requirements for Pre-licensing Presentation

Prior to submitting a formal application for a license, promoters and investors must provide the CBN with a pre-licensing presentation on the proposed microfinance bank’s business case.

  1. Requirements for Approval-in-Principle

Before submitting an Approval-In-Principle (“AIP”) application to the CBN, promoters and investors must first reserve the name of their prospective MFB with the Corporate Affairs Commission (“CAC”).

A formal application for the grant of Approval-in-Principle shall be made to the Governor of the Central Bank of Nigeria. The following documents must be submitted alongside the application:

  • Evidence of payment of non-refundable application fee to the Central Bank of Nigeria;
  • Evidence of capital contribution made by each shareholder;
  • Evidence of minimum capital deposit in line with Section 4.2.7 of this Guidelines, to be verified by the CBN;
  • Evidence of name reservation with the Corporate Affairs Commission (CAC);
  • Detailed business plan or feasibility report which shall, at a minimum, include:
  • Objectives of the Microfinance Bank;
  • Justification for the application;
  • Ownership structure in a tabular form indicating the name of proposed investor(s), profession/business and percentage shareholdings;
  • Sources of funding of the proposed equity contribution for each investor;
  • Where the source of funding the equity contribution is a loan, such shall be a long-term facility of at least 7-year tenor and shall not be taken from the Nigerian banking system;
  • Organizational structure, showing functional units, responsibilities, reporting relationships and grade of heads of departments/units;
  • Schedule of services to be rendered;
  • Five-year financial projection of the proposed bank indicating expected growth, profitability and the underlying assumptions; and
  • Details of information technology requirements and facilities.

For institutional investors, promoters shall forward the following additional documents:

  • Certificate of Incorporation and certified true copies of other incorporation documents.
  • Board resolution supporting the company’s decision to invest in the equity shares of the proposed bank;
  • Names and addresses (business and residential) of owners, directors and their related companies, if any
  • Audited financial statements & reports of the company and Tax Clearance Certificate for the immediate past 3 years.
  • Draft copy of the company’s Memorandum and Articles of Association (MEMART). At a minimum, the MEMART shall contain the following information:
  • Proposed name of the MFB
  • Objects clause
  • Subscribers to the MEMART
  • Procedure for amendment
  • Procedure for share transfer/disposal
  • Appointment of directors
  • A written and duly executed undertaking by the promoters that the bank will be adequately capitalized for the volume and character of its business at all times;
  • For regulated foreign institutional investors, an approval or a ‘no objection letter’ from the regulatory authority in the country of domicile;
  • Shareholders’ agreement providing terms for disposal/transfer of shares as well as authorization, amendments, waivers, and reimbursement of expenses;
  • Statement of intent to invest in the bank by each investor;
  • Technical Services Agreement, where applicable;
  • Detailed Manuals and Policies covering:
  • Credit Policy Manual;
  • Internal Audit Manual;
  • Asset/Liability Management Policy (ALM Policy);
  • Accounting policies and principles;
  • Roles and responsibilities of the senior management officials responsible for financial management;
  • Treasury operations, including funds management, vouchers, payroll and procurement;
  • Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) Policy;
  • Enterprise-Wide Risk Management Framework;
  • Whistle Blowing Policy;
  • Code of Ethics and Business Conduct;
  • Bank Verification Number (BVN) and Tax Clearance Certificate of each member of the Board and significant shareholders.
  • Duly signed resume and valid means of identification for proposed shareholders of proposed MFB;
  • Criteria for selecting board members;
  • Board composition, directors’ duly signed resumes and valid means of identification. The size and composition of the board shall comply with the provision of the CBN Code of Corporate Governance for MFBs;
  • Consolidated statement of account showing the capital contribution for all shareholders;
  • Completed Fitness and Propriety Questionnaire; and sworn declaration of net worth executed by the proposed shareholders, directors and management personnel;
  • Any other information that the CBN may require from time to time.

It is worthy of note that the minimum and maximum number of Directors on MFB boards are five (5) and seven (7) for Unit MFBs; five (5) and nine (9) for State MFBs; and seven (7) and twelve (12) for National MFBs.

Also, take note that at least two (2) members of the Board of Directors, other than the Executive Directors, must have banking or comparable financial industry experience.

Upon receipt of an application, the CBN must convey its decision to the applicant within 90 days. If the CBN is pleased with the application, it will give an Approval-in-Principle (AIP) to the applicant.

Registration with the National Association of Microfinance Banks (“NAMB”) is required after acquiring an AIP.

  1. Requirements for granting of final license

The CAC will finalise the incorporation of the MFB after the AIP is granted.

Then, promoters of a proposed microfinance bank shall file an application with the CBN for the issuance of a final licence, addressed to the Governor of the Central Bank of Nigeria, no later than six (6) months after receiving the AIP. The following documents must be included with the application.

  • Evidence of payment of non-refundable licensing fee to the Central Bank of Nigeria;
  • Certified true copy (CTC) of the Certificate of Incorporation of the bank;
  • CTC of MEMART;
  • CTC of Form CAC 1.1 (Application for Registration of Companies);
  • Evidence of the location of the Head Office (rented or owned) for the take-off of the business;
  • Schedule of changes, if any, in the Board, Management and Shareholding after the grant of AIP;
  • Evidence of ability to meet technical requirements and modern infrastructural facilities such as office equipment, computers, and telecommunications, to perform the bank’s operations and meet CBN and other regulatory requirements;
  • Copies of letters of offer and acceptance of employment in respect of the management team;
  • List of proposed top management staff and duly signed resume stating their qualification (including photocopies of academic and professional credentials), experience, records of accomplishments and valid means of identification;
  • Comprehensive plan on the commencement of the bank’s operations with milestones and timelines for roll-out of key payment channels; and 
  • Board and staff training programme.

Before obtaining a final license, the Central Bank of Nigeria must conduct an inspection of the proposed bank’s facilities and premises, which include:

  • Checking the physical structure of the office building and infrastructure provided for the take-off of the MFB;
  • Sighting the original copies of the documents submitted in support of the application for license;
  • Meeting with the Board and Management team whose resumes had earlier been submitted to the CBN;
  • Verifying the capital contributions of the promoters; and
  • Verifying the integration of its infrastructure with the National Payments System.

If the CBN approves the Application for Final Licence, it may award Final Licence to the Microfinance Bank.

Also, shareholders must deposit the Minimum Share Capital with the CBN when submitting an application for AIP. This amount may or may not be invested by the CBN, but it is refundable (with or without interest) at the end of the process.

What is the estimated timelines for granting licence?

The estimated timeline for granting an AIP is 3 to 6 months after submitting an application.

Likewise, the projected timeline for granting a Final Licence is 3 to 6 months after submitting an Application for Final Licence.

The CBN reserves the right to oversee, regulate, or even revoke a registered MFB’s license in accordance with the authority granted to it by the Banks and Financial Institutions Act 2020, so anyone interested in establishing a microfinance bank in Nigeria should proceed with caution and demonstrate competence and professionalism.

Note: The content of this article is anticipated to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstance.

By Adeola Oyinlade & Co.

Adeola Oyinlade & Co.; a full-service law firm in Nigeria provides help and offers advisory to both local and foreign clients on banking related matters including how to process microfinance bank licenses in Nigeria. 

Need help? Kindly contact us using the details below:

Email: info@adeolaoyinlade.com

Mobile: +234 803 826 7683 / +234 802 686 0247

Introduction

In the field of innovative technology, drones are used in different spheres of human activities. Drones can be used to handle complex jobs, offer security, conduct surveillance and collect information. However, the employment of drones can pose challenges from the point of standpoint of human rights and privacy, which raises the question of the need for legislative regulation of the use of drones

Drones pose a privacy issue since they can record and acquire personal information without consent, endangering human rights. They can also pollute the environment with noise, jeopardizing health. The lack of standards and rules for drone use is a serious problem. Legal regulations are required to set restricted flight zones and technical standards for commercial and private drones.

While drones have many useful applications, they also have the potential to do serious harm if mishandled. As a result, there are legal consequences to drone abuse that people should be aware of.

Definition and Classification of Drones

Drones, also known as unmanned aerial vehicles (UAVs), are aircraft that may be operated remotely by a human operator or an onboard computer system. They are employed in a variety of industries, including photography, agriculture, and search and rescue missions. However, as drones have gotten more economical and accessible, they have also become more common in everyday life, resulting in instances of drone misuse.

Drones offer a wide range of sizes, shapes, and configurations. These devices range from small handhelds for personal use to huge business ones capable of transporting heavy payloads over long distances.

Drones are classified based on their purpose, design features, and operating capabilities. Quadcopters, a type of multirotor drone, can hover, maneuver, and remain stable under different environments. These features make them ideal for aerial photography, surveillance, and lightweight cargo transport.

Fixed-wing drones, like airplanes, have wings that generate lift and propel them forward. Drones are ideal for applications that require long flight lengths and efficient distance coverage, such as mapping large areas or conducting remote surveillance.

Hybrid drones combine the vertical take-off and landing capabilities of multirotors with the endurance and efficiency of fixed-wing aircraft for long missions. Hybrid drones excel in settings that require both hovering and long-range flying.

Drone applications cover a wide range of industries and areas. Drones are used in agriculture for duties such as crop monitoring, pesticide spraying, and precision farming, helping farmers increase crop output and optimize resources. In

Drones are used in construction for site surveying, progress monitoring, and infrastructure inspection to improve project management safety and efficiency.

Drones are used in environmental monitoring to watch wildlife, map habitats, and identify pollutants. This provides significant insights for academics and conservationists into ecosystem health and biodiversity. Drones are crucial in search and rescue, disaster response, and emergency medical supply delivery due to their agility and ability to reach remote locations, ultimately saving lives.

Drones’ capabilities are expanding with innovations like obstacle avoidance, advanced imaging sensors, and real-time data transmission, making them more useful in various industries.

Commercial Drone Services in Nigeria.

Commercial pilots must apply for a permit directly through the Nigerian Aviation Authority (NCAA). 

Pilot Requirements for Remote Pilot License:

  • They must be at least 18 years old
  • Go through the vetting procedure of the National Security Advisor, and
  • Pass a first aeronautical knowledge exam offered by an NCAA-accredited institution.

Aircraft requirements:

  • Drones weighing less than 25 kilograms (55 pounds) are authorized.
  • Drones need to be registered with the NCAA.
  • Operators must keep in visual contact with the aircraft.
  • Drones must fly at or below 400 feet.
  • Drones must fly at speeds of less than 100 miles per hour.
  • Drones must yield to crewed aircraft.
  • Drones are not permitted to fly over people.
  • Drones cannot fly from moving vehicles.
  • Drones cannot fly beyond line-of-sight without NCAA approval.

Operational restrictions:

  • Drones cannot be used irresponsibly or in a way that endangers persons, property, or other aircraft.
  • Drones cannot be flown over state borders or over high seas without formal authorization from Air Traffic Control.

Foreign Drone Operators:

  • Foreign drone operators must receive a “Recognition of Ownership” from the NCAA and carry it on all drone flights.

Additional requirements:

  • Commercial drone operators must provide a detailed business plan that includes the company’s vision, goal, market analysis, and strategy.
  • In order to conduct business, operators must demonstrate their solvency.
  • Operators must produce valid tax clearance certificates for their organization and each director.
  • At least one member of the board of directors must be an aviation specialist, and Nigerians must own the majority of the shares.

Penalties and Enforcement:

  • Unlawful Operations: Flying a drone without the necessary authorizations is illegal and can result in penalties or up to three years in prison.
  • NCAA Enforcement: The NCAA is responsible for implementing Nigeria’s drone regulations.

Legal issues

  • Privacy: Drones with cameras can be used to take photos and films of people without their permission, infringing on their private rights. In many countries, the use of drones for surveillance is strictly controlled, and those who use drones to record photographs or videos of others without their permission may face legal consequences.
  • Safety: Drones operated carelessly or without sufficient training can endanger people, property, wildlife, and other aircraft. Violations of rigorous drone flight laws may result in fines or additional legal penalties.
  • Permits and regulations: Commercial drone operators in Nigeria must obtain permits and follow regulations set by the Nigerian Civil Aviation Authority (NCAA). Drones should not fly in restricted areas, such as those near airports or government facilities.
  • Data protection: Drones used for business purposes usually acquire data, which must be managed in compliance with data protection rules.
  • Intellectual property rights: Drones must not violate any intellectual property rights, including trademarks, copyrights, or patents.
  • National security: Drones should not be utilized in any manner that jeopardizes national security. Drone manufacturing, sale, and use must be regulated appropriately.
  • Workforce regulations: There may be restrictions in place to prohibit the exploitation of workers who use drones.
  • Consumer protection: Drones must abide with consumer protection standards, such as warranties and return policies.
  • Environmental regulations: Drones can have an impact on the environment, therefore rules must be put in place to mitigate the harmful effects. Drones should not cause soil erosion, uncontrolled emissions, or damage to wildlife habitats.

Ethical Issues

The ethical implications of using drones for commercial services in Nigeria are multifaceted and involve considerations of privacy, safety, and environmental impact. Here are some ethical concerns:

  • Surveillance and Data Collection: Drones equipped with cameras and GPS systems may inadvertently gather private data and video footage of persons, causing privacy and surveillance issues.
  • Data Protection: Drone operators have an ethical commitment to ensure the secure gathering, storage, and processing of private customer data to prevent unwanted access and data breaches.
  • Invasion of privacy: Drones equipped with cameras can be obtrusive and could violate an individual’s right to private.
  • Weaponization: Drones could be militarized and deployed unlawfully, posing a significant threat to public safety and national security.
  • Social and cultural impact: The usage of drones for commercial purposes may alter the way people work and interact with one another, resulting in social and cultural consequences that are not immediately evident.
  • Responsible use: The use of drones for commercial activity must be responsible, considering the potential impact on people, property, and the environment.
  • Liability: Drone operators must accept responsibility for any accidents, damage, or injuries that occur while operating the drone. Therefore, proper insurance should be put in place.
  • Accountability: Ethical and moral difficulties will arise with the usage of drones for commercial activity. To avoid unwanted outcomes, accountability for their use must be ensured.
  • Malfunctions and Collisions: Drone operators must guarantee that delivery aircraft do not endanger the people, property, or animals by avoiding malfunctions and maintaining safe flight paths.
  • Noise Pollution: Drones emit a characteristic buzzy sound, which can be disruptive in residential areas. Flight routes and schedules must be carefully designed to avoid noise annoyance.
  • Production and End-of-Life Disposal: Drones require materials and energy to manufacture, and their disposal, particularly their batteries, can pose environmental difficulties.
  • Infrastructure: Integration of drones into current systems necessitates new infrastructure, such as DroneSpots, which may incur environmental costs.
  • Job Displacement: The widespread use of drones for commercial services may result in job losses in traditional delivery industries, and there is an ethical need to give support and training to help workers adjust.
  • Drone Divide: Unequal access to drone technology and infrastructure can worsen economic inequality and create a “drone divide” between those who benefit from the technology and those who do not.
  • Cybersecurity: Drones are networked devices, making them susceptible to hacking, unauthorized access, and data breaches. Drone operators must use best practices to protect the security of sensitive customer data.

Torts of Privacy

In Nigeria, both statutory and common law torts apply to violations of privacy by individuals and organisations. In tort law, an individual can sue the person who committed the act or omission for a civil remedy, such as damages.

Individuals can also use common law torts to seek compensation for privacy violations. This comprises both the tort of “intrusion upon seclusion” and the unique tort of “disclosure of private facts.” Individuals whose privacy has been breached by drones may be entitled to sue for these and other torts, such as trespassing.

The tort of intrusion upon seclusion may occur if:

  • The drone operator intentionally and recklessly invaded the plaintiff’s private matters, inflicting anxiety, embarrassment, and sorrow.

The tort of disclosure of private facts can occur where:

  • The drone operator published information about the plaintiff’s private life without their consent, which would be highly offensive to a reasonable person and not of justifiable public concern.

Steps to Prevent Breach of Privacy 

Drone operators can take the following steps to reduce the danger of violating privacy laws or individual privacy rights during operations:

  • Restrict drone use in privacy-sensitive places (e.g., residential neighborhoods, schoolyards, shelters, hospitals, etc.).
  • Inform the neighboring people about the presence of drones and the types of operations.
  • When collecting vehicle license plates and faces, use blurring technology.
  • Implement a method that allows individuals to request that their photographs be restricted or taken down (e.g., for images posted online).
  • Limit the collection and retention of information that identifies a person (referred to above as “personal information”) to what is necessary for the operator’s commercial purposes.
  • Ensure adequate security measures for the data acquired; and
  • Make privacy training mandatory for all staff drone operators.

Conclusion

The legal consequences of drone misuse are serious and should not be overlooked. Individuals or commercial operators who utilise drones improperly or for illegal purposes may face serious legal penalties. As a result, it is critical for individuals to educate themselves about the regulations governing drone use, as well as to operate their drone safely and responsibly.

Note: The content of this article is anticipated to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstance.

By Adeola Oyinlade & Co.

Adeola Oyinlade & Co.; a full-service law firm in Nigeria provides help and offers advisory to both local and foreign clients on Litigation and Arbitration related matters in Nigeria. 

Need help? Kindly contact us using the details below:

Email: info@adeolaoyinlade.com

Mobile: +234 803 826 7683 / +234 802 686 0247

Introduction

A contract of employment can exist whether orally or in writing. It can arise out of any discussion, obligation or instruction to do an act as far as the elements of a contract are present. Agreements are made to be honoured. An unwritten contract is enforceable provided it complies with all the requirements of a valid contract. This article offers insights into the realm of employment contracts in Nigeria, particularly focusing on the enforcement and implications of unwritten contracts. 

Meaning and ingredients of a contract

A contract is simply a legally enforceable agreement, written or unwritten (oral), freely and voluntary reached between or entered by two or more persons with a clear intention to create a binding legal relationship. See, NURTW &Ors v. First Continental Insurance Co. Ltd (2019) LPELR-48005(CA). For there to be a valid, enforceable and binding contract between the parties, the following basic essential elements must be present.

  1. A definite offer,
  2. Unqualified acceptance,
  3. Intention to create a binding legal relationship,
  4. Consideration, and
  5. Legal capacity to contract. 

The law requires that all these basic elements must be present or co-exist in order for a binding and enforceable contract to be reached and arise on the authority of Orient Bank Nigeria Plc v. Bilante Int. Limited (1997) 8 NWLR (515) 37 at 76. However, the recognised foundation of a legally binding and enforceable contract between parties is the meeting of the minds, the agreement or on consensus ad idem by them on the subject matter as well as terms and conditions agreed to. See, Sona Breweries, Plc v. Peters (2005)1 NWLR (908) 478 at 488.

Classification of contracts 

Contracts are typically classified into two types, formal contracts and simple contracts.

Formal contracts include sealed contracts, negotiable instruments, and judgments/recognisances. All other contracts are deemed simple contract.

Contracts may also be classified as written contracts and unwritten (or oral) contracts.

Written contracts are those where the terms of the agreement are reduced to writing, while unwritten contracts are those where the terms are not formally documented.

Unwritten contracts can take the form of oral agreements or contracts implied from the conduct and actions of the parties. Examples of unwritten contracts include employment contracts, purchase contracts, and other everyday agreements where the terms are not formally written down.

Unwritten contracts are equally legally legitimate and enforceable as written contracts, as long as the contract’s vital elements (offer, acceptance, and consideration) are present.

The major distinction is that unwritten contracts are more difficult to prove because they are based on evidence of the parties’ words and behavior rather than a formal written document.

What is a contract of employment? 

A contract of employment means any agreement, whether oral or written, express or implied, whereby one person agrees to employ another as a worker and that other person agrees to serve the employer as a worker. 

Who is a worker?

A worker is defined in section 91 of the Labour Act as any person who has entered into or works under a contract with an employer whether or written and whether it is a contract of service or a contract personally to execute any work or labour. This contract is commonly referred to as Contract of Service.

How can parties agree in the absence of a written agreement?

When there is no written agreement parties can be taken to agree either on the practice of the trade or by conduct. See, Shena Security Co.Ltd v. Afropak (nig) ltd&Ors (2008) LPELR-3052(SC)

Are parties bound by the terms of a contract of employment?

It is trite law that parties to a contract are bound by its terms. The express terms of a contract of employment govern any aspect of the relationship between the employer and the employee. See, Amodu v. Amode& Anor (1990) LPELR-466(SC)

What determines the nature of a contract of employment?

Generally, employment is a contract or an agreement between parties, In the case of Mainstreet Bank Registrars Ltd v. Ukandu (2017) LPELR-43646(CA), the court stated that contract of employment is founded on the twin pillars of services and wages, it is on these that a contract of employment rest. A contract of employment is either grounded in statute or common law in which case the employment letter stipulates the terms of contract. See, NELMCO Ltd v. Onifade& Anor (2022) LPELR-58118(CA)

If any question arises with respect to the contract entered into by the parties, the terms in any document which constitute the contract are invariably, the guide to its interpretation. So, in its construction of contracts, it is the duty of the Court not to look at a contract in a narrow manner for its interpretation. The entire documents must be looked into and in conjunction with the dealings of the parties to know what they meant. See, the case of New Nigeria newspapers Ltd v. Atoyebi (2013) LPELR-21489(CA). It should be noted that contracts of employment fall into three categories:

  1. Master and servant, relationship;
  2. Where a servant holds an office at the pleasure of master; and
  3. Employment that is governed by statute. A contract is said to have statutory flavour where the contractual relationship between the employer and the employee is governed by a statute or regulations derived from statutes. See NEPA vs. Adesaaji (2002) 17 NWLR Part 797 page 578. 

What are the categories of contract of employment?

The law is settled that there are now roughly three categories of contracts of employment viz:

  1. those regarded as purely master and servant;
  2. those where a servant is said to hold an office at the pleasure of the employer: and
  3. those where the employment is regulated or governed by statute, often referred to as having statutory flavor, See, Olaniyan v. University of Lagos (1985) 2 NWLR (Pt. 9) 599.; CBN v Igwillo (2007) LPELR-835(SC)

Can an unwritten contract can be enforced?

It is settled that a Court of law will not allow the absence of writing to be used as an engine of fraud in a Court of justice. A Court will enforce the contract if it is found that there is an agreement from the fact before the Court. See, Ogundelu vs. Macjob (2006) 7 NWLR (pt. 973) 148 165. The law will not allow the absence of writing to be used as an engine of fraud unless it is a case where the law requires the transaction to be in writing. See, Lawal vs. Ejidike (1997) 2 NWLR (pt. 487) 319 at 331.

An agreement is made to be honoured. Consequently, an unwritten contract is legally binding and enforceable where it is breached. Enforceability of a contract is when a party to a contract can be compelled to observe or forced to obey the terms of the contract. An unwritten contract is enforceable provided it complies with all the requirements of a valid contract. See Jukok Int’l Ltd v. Diamond Bank Plc [2016] 6 NWLR (Pt. 1507) 73 at 26.

Legal Impact of an Unwritten Contract of Employment

Unwritten contracts can be lawful and enforceable even if they are not in writing. A contract must have an offer, acceptance, and consideration in order to be valid.

The burden of proof falls on the party arguing the existence of an unwritten contract to present credible evidence that a contract was formed as a result of the parties’ conduct and communications.

Unwritten employment contracts are believed to be “at-will,” which means that either party may end the agreement at any time without cause, unless implied provisions indicate otherwise. Implied terms might result from an employer’s conduct, policies, or statements that generate a reasonable expectation of job stability.

Breaches of unwritten employment contracts are treated the same as written contracts – the non-breaching party may sue for damages if the other party fails to meet their contractual responsibilities without explanation.

The severity of the breach impacts the potential remedies, such as permitting the non-breaching party to decline further performance.

Enforceability of an Unwritten Contract of Employment

It is a fundamental and well settled principle, that the terms and conditions of employment is the bedrock on which any claim predicated thereupon ought to squarely rest. Thus, where an employee complains of a wrongful termination of his employment, he has the onus:

  1. To place before the trial court the terms of the contract of employment;
  1. To prove the manner in which the said terms were breached by the employer thereof.

See U.T.C. Nigeria Ltd. v. Peters (2009) LPELR-8426(CA); JomboV. PEFM (2005).14 NWLR (Part. 945) 443

The question that necessarily follows is whether the Complainant has placed before the court terms of the contract of employment and whether he has shown the manner in which the terms were breached?

Where it is clear to both parties that the requirement to present such terms in the form of a document cannot be satisfied since no such express terms were at any time exchanged between the parties, that is, there was no written contract of employment between parties. The terms guiding the relationship between the parties are to be implied by the court in view of the circumstances of the case.

In view of the burden of proof placed on the Complainant and the circumstance of the suit wherein the employment relationship is largely undocumented, the court will take into cognizance the provision of section 12 (2) (b) of the National Industrial Court Act which provides that:

12 (2) Subject to this Act and any rules made thereunder, the Court:

(b) shall be bound by the Evidence Act but may depart from it in the interest of justice.

The effect of the forgoing is that the court has the discretion to depart from the rule of evidence as stipulated in the Evidence Act in the interest of justice where the occasion and circumstances of the case so demands.

It is pertinent to mention that the Nigerian Labour Law, through the provisions of sections 7 – 20 of the Labour Act prescribes matters that the employer ought to put in writing and given to the employee within three months of the employment. Such matters include the wages to be paid and the manner of payment and the appropriate period of notice to be given by the party wishing to terminate the contract. It must also be noted that where there is no written agreement as to the period of notice of termination of contract of employment, the notice to be given must be reasonable notice and same can be implied by the court. See Union Bank of Nigeria Plc v. Soares (2012) LPELR-8018(CA).

The forgoing provision aside, it must be noted that it is possible for parties to orally enter into a contract of employment as the court in Shena Security Company Ltd V. Afropak (Nigeria) Ltd &Ors. (2008) LPELR-3052(SC) held that a contract of employment means any agreement, whether oral or written, express or implied, whereby one person agrees to employ another as a worker and that other person agrees to serve the employer as a worker. That is by the definition of the Labour Act (Cap. 198) LFN, 1990 which applies to workers, strictly defined to the exclusion of the management staff.

It is not entirely out of place for parties not to have their contract of employment in writing but failure to express certain terms would leave the court with the responsibility of implying same as guided by the statute.  In the case of Afrab Chem Ltd v. Owoduenyi (2014) LPELR-23613(CA), the court held that in an employer-employee or master-servant relationship, in addition to or to the exclusion of the express terms of the contract, the law imposes certain implied terms into the contract. These implied terms may either be founded on statute, by custom, by practice, public policy or such terms as to ensure that the master does not subdue the servant to a condition of servitude or slavery or like terms. 

While the court should not concern itself with the reasonableness or otherwise of the contractual terms between the contracting parties, the law would not allow the imposition of servile conditions on an employee. Any such contract which tends to impose servile obligations upon any person would not be enforceable, see Davies v. Davies (1887) 36 Q – D 359. Where a term is permitted to be implied into a contract, the implied term has the same binding effect on the parties.

The court has the power to imply terms which the parties have themselves failed to agree upon but are necessary and would have been stated had the parties adverted their minds to it. See Lister v Romford Ice and Cold Storage Co. Ltd. (1959) WLR 555 at 594.

In Shena Security Company Ltd v. Afropak (Nigeria) Ltd &Ors. (2008) LPELR-3052(SC), the court posited that where there is no mode of termination of the contract of service by any form of notice, the common law rule will apply. That rule is that the court will imply a presumption that contract of service is to terminate by reasonable notice given by either party. What amounts to reasonable notice will depend on the intention of the parties as revealed by the terms of the contract.

Furthermore, the court in Akumechiel v. B. C.C. Ltd. (1997) (Pt.484) 695 at 703, stated that where the contract of employment is silent as to the required notice of termination, the court will imply that a reasonable notice is necessary. And it is within the province of the Judge acting as a jury to decide what is reasonable notice, having regard to the following factors:

  1. the nature of the employment
  2. the length of service, and
  3. other circumstances of the case.

In giving effect to the implied term as to notice of determination, the court relied on the provisions of the Labour Act of which section 11 stipulates the various length of notice for the determination of an employment with regards to various periods in employment. Section 11 provides that:

  1. Either party to a contract of employment may terminate the contract on the expiration of notice given by him to the other party of his intention to do so.
  1. The notice to be given for the purposes of subsection (1) of this section shall be-
  1. one day, where the contract has continued for a period of three months or less;
  2. one week, where the contract has continued for more than three months but less than two years;
  3. two weeks, where the contract has continued for a period of two years but less than five years; and
  4. one month, where the contract has continued for five years or more.

The court found that the implied term as to notice of termination of employment of the Claimant was breached in the absence of the any reasonable notice given to the Claimants before their employment was terminated.

Conclusion

Unwritten employment contracts are legally valid and enforceable in Nigeria. Their enforceability is dependent on the claiming party’s ability to establish the existence of a valid contract by convincing proof of the parties’ actions and communications. The assumption is that these contracts are at-will, however implied clauses can cause exceptions to this rule. Breaches of unwritten employment contracts can be remedied by legal action, with the possible remedies depending on the gravity of the breach.

Note: The content of this article is anticipated to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstance.

By Adeola Oyinlade & Co.

Adeola Oyinlade & Co.; a full-service law firm in Nigeria provides help and offers advisory to both local and foreign clients in Nigeria. 

Need help? Kindly contact us using the details below:

Email: info@adeolaoyinlade.com

Mobile: +234 803 826 7683 / +234 802 686 0247

Introduction

Telecommunications services are essential to modern society, which facilitates global communication, business, and connectivity. In recent years, Nigeria’s telecommunications business has developed and expanded greatly, owing to technology breakthroughs and regulatory reforms. However, in addition to these advancements, consumers frequently face issues such as network congestion, call dropouts, and insufficient customer support, all of which weaken service quality and reliability. This article examines the Nigeria’s legal framework regulating telecommunications services, as well as the remedies accessible to consumers who have been affected by service failures.

Definition of Concept

Telecommunication

Telecommunication may be defined as any transmission, emission, or receiving of words, signals, images, sounds, or intelligence of any kind through wire, radio, or other means. It includes the transfer of data across vast distances and comprises a number of industries, including fiber, electromagnetic fields, light, cable, and more. Larger organisations provide telecommunication as a crucial system and service that allows information to be exchanged globally by text, speech, audio, or video.

From the development of the electrical telegraph in the 1830s to the present day of mobile networks and high-speed internet access, telecommunication has seen substantial change. The industry comprises wireless communication, telecom equipment, and telecom services. Its main sectors are long-distance carriers, processing systems, wireless communication, and communications equipment. Essentially, telecommunication serves as the basis for the global transmission of data, linking people, organisations, and different communication devices across an intricate network of services and technologies.

Consumer

The Consumer Protection Council Act, CAP C25 Laws of the Federation, 2004 defines a consumer as an individual who purchases, uses, maintains or disposes of products or services.

Consumer Protection is a law that protects customers from unfair trade practices, exploitative and illegal business practices including the activities of manufacturers and service providers. It means safeguarding customers against products and services that are detrimental to their health, life, and property, as well as providing them with access to a variety of goods and services at reasonable costs.

Consumer protection covers a range of consumer rights, obligations, and legal remedies.

Legal Framework on Protection of Consumers of Telecommunication Services

The legislations that protect the interests of consumers of telecommunication services in Nigeria include the Constitution of the Federal Republic of Nigeria 1999 (as amended), Nigerian Communications Commission Act, Telecommunications and Postal Offences Act, Wireless Telegraphy Act, Consumer Protection Council Act, and Standards Organization of Nigeria Act.

The Constitution of the Federal Republic of Nigeria 1999 (as amended): Section 37 of the 1999 Constitution makes provisions for the protection of privacy for citizens, their homes, correspondences, telephone conversations, and telegraphic communications.

The Nigerian Communications Act, 2023: The Act establishes a framework for the administration and regulation of the communications industry and grants the NCC broad discretionary rule-making powers for effective monitoring.

It covers licensing, competition policy, quality service, interconnection, scarce resource management, infrastructure sharing, universal service, tariff regulation, penalties, sanctions, and dispute resolution in the telecom industry.

The Act highlights the importance of consumer protection, efficient market behavior, and the growth of Nigeria’s telecommunications capabilities.

Federal Competition and Consumer Protection Act: The Act protects consumer rights by providing remedies for misleading assurances, unfair trade practices, and fraud.

The Telecommunications and Postal Offences Act, 1995: The Act addresses offences and punishments for acts against telecommunications and postal services. It also addresses other relevant issues. Some of them are directly related to consumer protection for telecommunications services, tampering with wireless cables, diversion of telephone lines, fraud-related offenses, obtaining telecommunications services by fraud, impersonation, touting, aiding and abetting commission of offense, etc.

Wireless Telegraphy Act: The Act that governs wireless telegraphy, licenses, and consumer protection in telecommunications services. Section 9 of the Act stipulates that the NCC, with the Minister’s approval, may make regulations to protect the secrecy of wireless telegraphic communications.   Section 10 of the Act addresses misleading message interception and disclosure of messages.

The Standards Organisation of Nigeria Act of 2004: This Act plays a critical role in consumer protection by ensuring products meet specified quality and safety standards before they are allowed into the market.

The Act creates the Standards Organisation of Nigeria (SON) as the governing body in charge of standardizing and regulating goods in Nigeria.

The Act authorises the SON to regulate products, certify compliance with standards, and take action against producers or marketers of substandard commodities, thus protecting consumers’ interests.

Rights of Telecommunication Consumers

The rights of telecommunication consumers in Nigeria contained in several legislations include but not limited to the following.

Right to Quality Services: The Nigerian Communications Act and Quality of Service Regulations ensure that telecom operators maintain high-quality communication services while protecting consumers from unfair activities.

Right to Fair Charges and Accurate Billing: To promote transparency and fairness, telecom providers must adhere to billing standards, itemize charges, and issue bills on time.

Right to Privacy and Protection of Personal Information: Regulations demand confidentiality of customer information and prohibit unsolicited telemarketing.

Right to Protection from Unfair Practices: Consumers are protected from unfair practices by telecom companies, such as poor service quality, erroneous billing, and unsolicited messages by the Nigerian Communications Act, 2023 and Consumer Code of Practice Regulations 2007.

Right to Safety: The Right to Safety legislation promotes product/service quality and safety through consumer education programs. It seeks to deliver services that do not endanger clients’ health or society well-being. Consumers should be cautioned of dangerous radiation, odorless or deadly gasses, and associated health hazards.

Rights to Information and Consumer Education: Consumers have the right to accurate and timely information about services, pricing, and billing from their telecom providers. The right to information enables customers to make informed decisions based on their needs and preferences. It also guarantees that customers are educated on the environmental, social, and economic consequences of their decisions. This involves truth in marketing, price, product labeling, disclosure of interest rates, and discounts. Consumers should be able to appreciate their purchases.

Right to Choose: Consumers have the right to choose from a variety of goods and services at reasonable costs, protecting them from monopolistic tendencies and market practices. This includes the right to expect good quality and service at reasonable prices, ensuring basic goods and services are available.

Right to Redress: Consumer rights include the right to express grievances, infringements, and violations, as well as the right to fair resolution and refunds for misrepresentation, defective goods, or poor service.

Remedies Available to Telecommunications Consumers

In Nigeria, the remedies available to telecommunication consumers include:

  • Alternative Dispute Resolution Method (Resolving Disputes with Service Provider)
  • Statutory Remedies
  • Civil Remedies

Alternative Dispute Resolution Method (Resolving Disputes with Service Provider)

If a consumer is dissatisfied with telecommunications provider’s service, billing, or unfair tactics, such consumer has the right to seek a resolution. Consumer can take the matter to the Nigerian Communications Commission (NCC), the telecommunications industry’s regulatory body.

Consumers who have suffered damage or losses may follow the procedures listed here to access the legal remedies available in the telecommunications industry.

  1. Consumers should file a complaint with the service provider and follow their complaint handling procedures.
  2. If a consumer’s issue is disregarded or not resolved satisfactorily, the consumers should lodge the complaint with the Nigerian Communications Commission.
  1. The Commission can order licensees or service providers to pay compensation to consumers and provide guidance on compliance with the Nigerian Communications Act and its subsidiary legislation. 

Consumers who have experienced loss, damage, or injury due to a telecommunications service provider’s defective product or service can also file a complaint with the Consumer Protection Council, State Consumer Protection Committees, Public Utilities Charges Commission, or Public Complaints Commission.

Statutory Remedies

Protection Offered Consumer under The Nigerian Communications Act

The Nigerian Communications Act of 2003 sets out a number of consumer remedies for Nigerian telecoms users. Below are some important points about consumer remedies under the Nigerian Communications Act:

Minimum Standards of Quality of Service: Section 104 of the Act requires all service providers to meet the Commission’s minimal quality of service standards. Consumers have the right to expect fair service quality and to have their complaints resolved.

Consumer Complaint Resolution: Section 105 allows the Commission to resolve complaints about customer service, consumer protection, and service quality. The Commission can handle complaints and develop alternative dispute resolution methods if needed.

Consumer Codes: Section 106 empowers the Commission to designate industry bodies to serve as consumer forums and create consumer codes. These codes specify how businesses meet consumer expectations, handle complaints, and compensate customers for code violations. Licensees must also adopt individual consumer codes, subject to the Commission’s approval.

Enforcement Powers: The Commission has the jurisdiction to enforce consumer protection measures, issue compliance notifications, and take legal action against licensees who fail to follow consumer codes and regulations. The Act establishes mechanisms for penalties, fines, and other measures to ensure that consumer rights are protected.

Protection Offered Consumer under the Federal Competition and Consumer Protection Act (FCCPA)

The Federal Competition and Consumer Protection Act (FCCPA) provides numerous remedies for Nigerian consumers:

Right to Redress:

Consumers can seek remedy through designated courts, tribunals, and committees. If a company’s trade practices, services, information, or advertising violates a consumer’s rights or causes injury or loss, they can initiate a civil action for compensation or restitution before a competent court.

Accredited Consumer Protection Groups:

Accredited consumer protection groups may advocate for consumers in court, resolve disputes through mediation or conciliation, and participate in national and international consumer protection forums. These groups can act in any venue to ensure that the interests of their consumers are effectively addressed.

Penalties & Fines:

Companies that breach consumer rights or engage in anti-competitive strategies may face penalties, fines, or other punishments from the FCCPC. Consumers may receive monetary restitution or compensation.

Investigations & Enforcement:

The FCCPC can investigate consumer complaints, issue directions, and take enforcement actions against firms which adversely affect consumer interests. This includes seeking written assurances from firms that will desist from such action.

Civil Remedies

Under Nigerian civil law, telecommunications consumers have many options if their rights are violated or they suffer damages as a result of poor service quality.

Damages: Consumers can seek monetary compensation for losses caused by a telecom operator’s breach of contract, negligence or conduct that is unacceptable. This includes refunds for underutilized services, cost reimbursement, and damages for inconvenience caused. In a case like Nigerian Telecommunications Plc v. Odu’a Investment, a consumer was awarded damages for the telecom operator’s breach of contract in providing poor quality services.

Specific Performance: A consumer may request that the court compel the telecom operator to precisely perform its contractual obligations, such as restoring interrupted services or providing the agreed-upon quality of service.

Rescission: If a breach is substantial enough, the consumer may terminate the contract and be released from further responsibilities. This enables consumers to reclaim any payments given to the telecom operator.

Strict Liability for Injury Caused by Services: Strict liability may apply when a telecom operator’s service causes injury to a consumer, even if fault is not shown. If the service is intrinsically harmful or defective, the operator may be held responsible for any consequent damages.

Nuisance: If a telecom operator’s actions or omissions significantly disrupt a consumer’s use and enjoyment of their property, consumers may have a private nuisance claim. This could include instances of excessive noise, vibrations, or damage caused by the operator’s infrastructure.

Injunction: Consumers may apply for injunctions to prohibit telecom providers from continuing conduct that infringes their rights or materially interferes with the use and enjoyment of their property.

Complaints to Regulatory Bodies: Consumers can register complaints with regulatory bodies, such as the Nigerian Communications Commission (NCC), to resolve disputes, apply penalties, and enforce compliance with consumer protection legislation.

Enforcement of Consumer Rights: The courts play an important role in enforcing consumer rights, as demonstrated in instances like Adegboruwa v. Nigerian Communications Commission, where customers sought remedy for poor service delivery and arbitrary tariff hikes by telecom carriers.

Conclusion

With the provision of vital services like internet access, television transmission, and mobile phone connectivity, the telecommunications sector is essential to modern society. However, a number of issues, including poor services, inconsistent billing, or unjust contract terms, can give rise to customer complaints with telecom providers. The Nigerian government has put in place extensive consumer protection laws that regulate telecommunications services in order to protect consumer rights and guarantee equitable treatment.

In conclusion, this paper emphasises the importance of legal remedies in protecting the rights and interests of Nigerian telecommunications customers. This effort aims to empower customers by explaining the rights bestowed by law and the means available for enforcing those rights, as well as holding service providers accountable for breaches of contract or regulatory duties. Finally, this article calls for sustained vigilance and activism to guarantee that Nigeria’s telecommunications services are accessible, low-cost, and of good quality, hence encouraging consumer welfare and growth in economy.

Note: The content of this article is anticipated to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstance.

By Adeola Oyinlade & Co.

Adeola Oyinlade & Co.; a full-service law firm in Nigeria provides help and offers advisory to both local and foreign clients on Telecommunication and Sub-Telecoms related matters in Nigeria. 

Need help? Kindly contact us using the details below:

Email: info@adeolaoyinlade.com

Mobile: +234 803 826 7683 / +234 802 686 0247

Introduction

Surrogacy is often discussed in the media from a scientific, social, legal, and policy perspective. Although surrogacy is widely accepted as a kind of assisted reproduction for those who would otherwise be unable to have children, it can elicit strong feelings, particularly when there is a risk of exploitation. As a result, there is dispute over how it should be governed. Surrogacy is illegal in many nations, but people nonetheless do it. In some jurisdictions, surrogacy is unregulated while in certain countries, it is guided by a ‘commercial’ or ‘altruistic’ framework.

Although Nigeria does not prohibit surrogacy, it has not established a legal framework for regulating the surrogacy procedure. The lack of formal legislation governing the practice places both the couple and the intended surrogate mother in a legal limbo, exposing the parties to legal dangers. This article examines the enforceability of surrogacy contracts and agreements in Nigeria.

What is surrogacy?

Surrogacy is a procedure in which a woman, known as the surrogate or gestational carrier, agrees to carry and give birth to a child for another individual or couple, known as the intended parent(s). The surrogate carries the pregnancy and gives birth to the child, with the intention of passing it on to the intended parent(s) following delivery. Surrogacy can be either altruistic, in which the surrogate receives no financial compensation beyond reasonable expenses, or commercial, in which the surrogate is compensated for her role. 

Surrogacy is frequently attempted by individuals or couples who are unable to conceive or carry a child due to infertility, pregnancy-related health problems, or other causes. It is a practice involving sophisticated medical procedures, emotional difficulties, and legal consequences that necessitate thorough understanding and adherence to applicable laws and rules. Surrogacy laws and regulations differ widely among jurisdictions, creating complex legal, ethical, and medical issues.

Types of surrogacy

Surrogacy is usually divided into two types, traditional surrogacy and gestational surrogacy.

Traditional surrogacy: This involves using the surrogate’s egg for conception, mainly by intrauterine insemination (IUI). It is less popular because of its legal and emotional difficulties.

Gestational surrogacy: It involves a woman carrying and giving birth to a child generated by in-vitro fertilization with the gametes of one or both intended parents, without the gestational surrogate’s genetic contribution. A woman’s consent to have a child which is then transferred to others upon birth. Gestational surrogacy involves creating an embryo using an infertile woman’s egg and sperm and implanting it in a surrogate mother. 

Who are the intended parents? 

Intended Parents are individuals or couples who are unable to conceive naturally and opt for surrogacy to start a family. 

Who is a surrogate mother? 

A “surrogate mother” is a woman who, for financial or other reasons, agrees to bear a child for another woman who is unable to conceive. She is a “substitute mother” who conceives, gestates, and delivers a child on behalf of another woman, who is then considered the child’s “real” mother (social and legal).

What are the legal frameworks governing surrogacy in Nigeria?

There is no broad legal framework regulating surrogacy in Nigeria, causing uncertainty and hurdles in surrogacy arrangements. The lack of surrogacy-specific laws in Nigeria raises concerns about the validity and enforcement of such contracts in court.

Some argue that since surrogacy is not explicitly prohibited, surrogacy contracts can be enforceable based on general contract law principles of offer, acceptance and consideration. However, others contend that unregulated surrogacy violates section 30 of the Child Rights Act which prohibits buying, selling or dealing in children. Section 13 of the Trafficking In Persons [Prohibition] Enforcement And Administration Act (TIPPEA Act) criminalizes all types of human trafficking and section 50 of the National Health Act which prohibits manipulation of any genetic material.

Although Nigeria lacks a legal framework for surrogacy, there are professional rules and standards that regulate the practice. Order 23 of Code of Medical Ethics in Nigeria make provisions for assisted conception and related practices. It provides to the effect that high-technology based human reproductive processes are now being employed by registered practitioners in Nigeria. These techniques embrace wide professional practices that include in-vitro fertilization, sperm donor and egg donor techniques, embryo donation, gestational surrogacy, full surrogacy and other emerging procedures. 

While the necessary statutes to govern these desirable practices in the society are yet to be enshrined, ethical considerations show the essence for care and attention to the several needs of donor, recipient, and offspring at every step in these practices. While the Council is devoting particular attention to necessary and continuous development of the ethical guidelines in assisted conception and all its professional practice implications, practitioners are expected to resolve certain matters of ethical significance that may arise. While both sperm and egg donations in in-vitro fertilization are accepted as ethically sound practices, in embryo donations, gestational surrogacy or full surrogacy, the practitioner will need to resolve ethical matters in respect of the following:

(A) Counseling and Consent of the donor in respect of:

  • The willingness to donate
  • The desire to help infertile couples

(B) The gamete or embryo processing

  • There must be the screening of family history for genetic diseases, HIV and other infectious diseases including rescreening for HIV.
  • In situations where embryos are mixed, genetic ancestry may only be determinable by DNA testing.

(C) The recipient is:

  • Screened for uterine fitness and gestational capability
  • Screened-for psychological stress
  • Counseled that birth may not occur,
  • Informed on the extent of screening done, particularly in case rescreening for HIV is omitted
  • Made to give informed consent on psychological uncertainties
  • Told of limit of information given to donor on the out come

(D) The Offspring

There are options on the need for openness or secrecy with regard to full disclosure. For now, in Nigeria, the principles applied in child adoption are best in the present circumstances.

(E) Monetary compensation for embryo

There are ethical considerations on monetary payments in view of connotations of selling and commercialising in the early form of human life.

It has become necessary that the Laws of the country should make the provisions for resolving this. Meanwhile the Medical and Dental Council of Nigeria advises that gamete or embryo donation should be made as a voluntary service and not commercialised.

(F) Embryo donation for research

There is the ethical risk of trading in embryos that are neither used to – initiate pregnancy nor discarded. Such issues as donor recruitment methods, monetary transactions, and types of researches to be applied to embryos certainly need statutory regulation. The Medical and Dental Council of Nigeria calls for appropriate legislation on the matter.

The country has attempted to regulate surrogacy, most notably with the presentation of the Assistive Reproductive Technology (Regulation) Bill in 2016. However, this bill is yet to be passed, leaving a substantial vacuum in the legal protection and regulation of surrogacy contracts. Lagos State stands out as an exception, having issued guidelines on Assisted Reproductive Technology in 2019, a trailblazing action that is yet to be emulated in Nigeria’s other states and the Federal Capital Territory. This legislative void encourages informal agreements, which can lead to conflicts and exploitation, stressing the vital need for regulatory guidance and legal protection for all parties involved.

It is evident that the absence of surrogacy regulations in Nigeria puts all parties in a vulnerable position. To create a transparent, ethical, and legally sound approach to surrogacy, Nigeria must enact comprehensive legislation. Such regulations would handle the intricacies of surrogacy, protect against exploitation and disputes, and ultimately prioritise the well-being and rights of the children born as a result of these arrangements, as well as the rights of other parties involved.

Until such rules are in place, the emphasis will be on creating thorough, legally binding surrogacy contracts. These contracts constitute an essential tool for people considering surrogacy as a path to parenting.

What is a surrogate agreement?

A surrogate agreement, also known as a surrogacy contract, is a legal document that states all parties’ rights, obligations, and expectations in a surrogacy relationship. Some key elements that may be contained in the Surrogate Agreement include:

  • Accuracy of information by parties to the Agreement
  • Evaluations, examinations, screening, medical procedures and instructions 
  • Release of information by gestational carrier or surrogate mother
  • Sexual activity of the gestational carrier or surrogate mother
  • Medical instructions, diet and prenatal vitamins of the gestational carrier or surrogate mother
  • Restrictions regarding the use of substances; harmful exposure by gestational carrier or surrogate mother
  • Strenuous activity, travel, residence by gestational carrier or surrogate mother 
  • Payment and reimbursement
  • Gestational carrier’s medical expenses
  • Possession of child after delivery and breast milk
  • Termination of pregnancy
  • Parent-child relationship
  • Confidentiality
  • Change of circumstances
  • Termination of agreement
  • Breach of agreement and remedies
  • Governing Law

Surrogacy contracts must carefully protect the interests of all parties involved, particularly the intended mother and surrogate. In traditional surrogacy arrangements, it is critical to include clauses that protect the intended mother and parents against disputes over parental rights. Contracts for all surrogacy kinds should clearly stipulate that any unauthorised keeping of the child by the surrogate is considered abduction, stressing the gravity of such actions and ensuring legal protection for the intended parents.

Is a surrogacy contract enforceable under Nigerian law?

The Nigerian legal system permits the enforcement of contracts that meet certain essential requirements. As a result, despite the lack of particular legislation governing surrogacy, surrogacy contracts are considered with the same respect and consideration as other legally binding transactions.

Surrogacy contracts are based on mutual consent and the exchange of value, which are essential for their validity and enforceability. Even though there are no specific surrogacy laws in Nigeria, these agreements are recognised under general contract law principles, which mean that once the contract includes a clear and definitive offer, acceptance, and consideration, it becomes valid and enforceable. 

A surrogate contract entered into through threat, coercion, or deception, or terms that are impossible to fulfill by either party, like any other contract, will not be enforced by the court. It is important to note that commercial surrogacy contracts, in which the surrogate is compensated, are seen differently across jurisdictions, with some equating them to the sale of children, which is both legally and ethically objectionable.

Despite the fact moral and public policy debates may indicate a reluctance to enforce surrogacy contracts, it is important to note that surrogacy agreements are legally enforceable once they meet the requirements of a valid contract. If there are any complications with a surrogacy contract, the parties involved have the right to seek legal redress and possibly have their case heard and decided in court.

After the birth of the child through surrogacy, the intended parents must get a custody order in Nigeria. This legal procedure is vital for ensuring that their parental rights are completely and legally recognised and protected. Obtaining a custody order confirms the intending parents’ legal status as the child’s parents, offering peace of mind and legal protection for the family’s future.

Conclusion

Despite the fact that research indicates that there is no single rule governing surrogacy that has become widely practiced among Nigerians, it does not mean that the concept is outlawed in Nigeria. 

Surrogacy contract is enforceable in Nigeria. The notion is based on agreement, which means that it is a contract that includes the fundamental parts of an offer and acceptance. A contract becomes enforceable after all of the requisite criteria have been met. Thus, in the event of a violated surrogacy arrangement, the parties may seek legal redress in a court of law.

A surrogate agreement is a complex legal instrument that requires the skills of an experienced fertility lawyer to ensure compliance with local regulations and tailoring to the parties’ individual needs.

Note: The content of this article is anticipated to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstance.

By Adeola Oyinlade & Co.

Adeola Oyinlade & Co.; a full-service law firm in Nigeria provides help and offers advisory to both local and foreign clients in Nigeria. 

Need help? Kindly contact us using the details below:

Email: info@adeolaoyinlade.com

Mobile: +234 803 826 7683 / +234 802 686 0247

Introduction

In Nigeria, the procedures for obtaining an aviation license under Nigerian law include adherence to the Aviation Act, which provides a legal foundation for the aviation industry.  Globalization has caused a paradigm shift in Nigeria’s aviation business, resulting in greater foreign airline participation and foreign direct investment, which has been aided by deregulation and liberalisation measures.

Nigeria has a free-market economy, and international investors are welcome to establish businesses in the country. A foreign individual or entity may establish a completely owned company in Nigeria, operate it, hire expatriates, and repatriate earnings, subject to Nigerian laws. However, before a foreigner can conduct business in Nigeria, the company must be properly registered in the country.

The Companies and Allied Matters Act 2020 (CAMA) is the primary legislation governing company registration in Nigeria, and the Corporate Affairs Commission (CAC) serves as the regulating authority. Aside from company registration, there are additional regulatory requirements that must be met before any company may legally conduct business in Nigeria.

A foreign national can acquire an aviation license in Nigeria. The process entails applying to the Nigerian Civil Aviation Authority (NCAA) for the appropriate license and submitting the relevant documentation such as passport copies, educational credentials, a medical certificate, and evidence of flying experience.

This article provides a comprehensive step-by-step guide to acquire aviation license.

Definition of Concept

Aircraft

Section 117 of Civil Aviation Act 2022 defines an aircraft as any machine that can derive support in the atmosphere from reactions of the air other than reactions of the air against the earth’s surface.

Licence

According to Civil Aviation Act 2022, licence includes air transport licence, air operators permit, air travelers organisers licence, air operators certificate, certificates of airworthiness, certificate of registration, personnel licences and ratings, aerodrome licence, aviation training organisations approvals or certificates, aircraft maintenance organisation approvals or certificates and all other authorisations and approvals issued under this Act.

Legal and Regulatory Framework of Aviation Industry

  1. The Constitution of the Federal Republic of Nigeria 1999 (as amended): The Constitution is Nigeria’s supreme law. It places aviation subjects on an exclusive list, implying that only the National Assembly has the authority to regulate aviation in Nigeria. Section 251 of the 1999 Constitution (as amended) grants the Federal High Court exclusive jurisdiction over all disputes concerning aviation and aircraft safety.
  1. Civil Aviation Act, 2022 (CAA): This Act is Nigeria’s primary law governing aviation. It established the Nigerian Civil Aviation Authority (NCAA) as the primary regulator of technical and safety issues in the aviation industry, assuring compliance with international standards specified by the International Civil Aviation Organisation (ICAO).
  1. Nigerian Civil Aviation Regulations, 2023 (NCAR): The NCARs address a variety of aviation issues, including as aircraft registration, consumer protection, staff licensing, and airworthiness. It discusses safety management criteria aligned with ICAO standards.
  1. Federal Airport Authority of Nigeria Act, 1996 (FAAN Act): This Act created the Federal Airports Authority of Nigeria (FAAN), which is in charge of developing, providing, and maintaining airport services. It authorizes FAAN to maintain safe and orderly air transport operations and establishes security guidelines for airports.
  1. Nigeria Airspace Management Act, 1999 (NAM Act): The NAM Act created the Nigerian Airspace Management Agency (NAMA), which is in control of air traffic services and airspace management. It explains the tasks and responsibilities of NAMA in administering Nigeria’s airspace.
  1. Nigeria Civil Aviation Authority (NCAA): This is Nigeria’s principal regulating authority for aviation. The Nigeria Civil Aviation Authority (NCAA) was founded to address concerns such as aircraft registration and marking, consumer protection, staff licensing, and airworthiness.
  1. Accident Investigation Bureau (AIB): The CAA established the Accident Investigation Bureau (AIB) to investigate aviation accidents and incidents in Nigeria. It plays an important role in assuring safety and compliance in the aviation business.

Procedure and Requirements for Registration of Aircraft

Part 4.2.1.1 of the Nigerian Civil Aviation Regulation outlines the procedures and requirements for aircraft registration in Nigeria, which are as follows:

  • An applicant interested in registering an aircraft is required to apply to the relevant authority by submitting a duly completed application form-AC-AWS 001A or in a form and manner acceptable to the Authority.
  • Each application is required to comply with the eligibility requirements; it must also include evidence of ownership e.g. Bill of Sale and be signed in ink.
  • An applicant for aircraft registration is required to be eligible for the registration, and the eligibility requirements as backed by Section 33 of the Civil Aviation Act are as follows;
  • The aircraft must be owned by a citizen of Nigeria.
  • It is owned by an individual citizen of another State who is lawfully admitted for permanent residence in Nigeria or,
  • It is owned by a corporation lawfully organised and carrying on business under the laws of Nigeria and the aircraft is based and used primarily in Nigeria.
  • It is owned by a government entity of Nigeria or a political subdivision thereof.
  • It is owned by a foreign person who has leased the aircraft to one of the persons described above, provided that the aircraft remains on the Nigerian registry for as long as the lease subsist or the certificate of registration includes the names and address of the lessee and if different, the operator of the aircraft.
  • The aircraft is not registered under the lease of another State and the aircraft is not more than 22 years old unless the aircraft is used exclusively for general aviation purposes.
  • After the aircraft has been evaluated by the Authority and found acceptable for the issuance of a Certificate of Registration, it is required to comply with the following technical and legal requirements and submit the following documents;
  • Aircrafts technical specification which includes the followings;
  • The full description of the type, model, and serial number.
  • Type certificate datasheet.
  • Supplementary type certificate data if any.
  • Make and part numbers of avionics and equipment installed.
  • Airworthiness Directives (Ads) status report.
  • Copy of the current Certificate of Registration where applicable.
  • Copy of the current C of A where applicable.
  • A Certificate or notice of de-registration from the previous state of registry or a letter from the state of manufacture if the aircraft is new and has never been registered in any other state. The de-registration Certificate must be received by the Authority directly from the state of the registry and should never have been presented by the applicant.
  • A certified copy of an aircraft’s current insurance certificate.
  • A copy of Air Transport License (ATL), Air Operating Permit (AOP) or Permit for Non-Commercial Flight (PNCF) or Permit for Aerial Aviation Service (AAS).
  • Proof of payment of the prescribed fees.
  • A certified copy of the Certificate of Incorporation with the Corporate Affairs Commission (CAC), if owned by a corporation.
  • A copy of a government-issued identity card (ID) or Passport if owned by an individual or any other means of identification approved by the Authority.
  • Honourable Minister of Aviation Permit to import and operate the aircraft.
  • The applicant is also required to comply with the additional requirements by submitting the following documents;
  • Documents to prove the aircraft ownership, for example, purchase agreement with stamp duties paid.
  • Names of the directors of the company owning or leasing the aircraft and their specimen signatures giving authority to register and or operate the aircraft in Nigeria and indicating who among them has the mandate to transact on their behalf on matters relating to the aircraft registration and operation.
  • A certified true copy of the lease agreement if the aircraft is on a lease, with stamp duties paid.
  • A certified true copy of the power of attorney from the owner/lessor and the lessee.
  • An indemnity in accordance with the Regulations.
  • Irrevocable Deregistration and Export Request Authorisation (IDERA) if applicable.
  • Upon the fulfillment of the above requirements, an evaluation will be carried out on the application to establish that the documents are authentic, genuine, valid, and relates to the subject aircraft. It will also be evaluated to ensure that the aircraft type Certificate complies with an acceptable airworthiness code (which means Civil Aviation Regulations and Standards of the contracting State of Design, relating to the design, materials, construction, equipment, performance, and maintenance of aircraft).
  • The aircraft that fails to meet the required standards and satisfy the acceptable Type Certificate requirements will be classified Non-Complaint and will not be accepted for registration in Nigeria.
  • On completion of a successful document evaluation, the airworthiness inspector will issue the aircraft acceptance for registration note.
  • The applicant will be allocated registration marks. The registration marks can be reserved after payment of the reservation fee; however, the reservation fee is only valid for six (6) months.
  • The applicant can also be allocated special registration marks of choice. These special marks are allocated on request in writing and they attract an extra fee in addition to the registration fee.
  • After the applicant meets all the statutory requirements for registration, a Certificate of Registration will be issued by the Nigerian Civil Aviation Authority as stated in Part 4.2.1.4.
  • The acceptance for registration is only for aircraft of a type that is acceptable to the Authority.

The Aviation Authority issued a Certificate of Registration that is valid for five (5) years and can be renewed.

Effect of Registration

Part 4.2.1.1 of the Regulations provides that no one may operate a civil aircraft under the laws of Nigeria unless it has been registered by its owner or operator under the laws of Nigeria and the Authority has issued a Certificate of Registration for that aircraft, which must be carried on board the aircraft for all operations.

The effect of registering and obtaining a Certificate of Registration for an aircraft is that, it allows the aircraft to operate in Nigeria.

Commercial Aircraft Operations in Nigeria

In Nigeria, businesses require incorporation, including the aviation sector. According to Section 32 of the Civil Aviation Act (“CAA” or “the Act”) 2022, no aircraft can be used for commercial operations without a license, permit, or authorization from the NCAA. Additionally, section 96 of the act provides to the effect that license will not be granted to applicants who are not Nigerian citizens or companies with a principal place of business in Nigeria. The Act’s provisions are backed by Paragraph 4.2.1.2 of the Nigerian Civil Aviation Regulations 2023.

Foreign airlines intending to conduct scheduled services in Nigeria must be designated under the current Bilateral Air Services Agreement (BASA) between its government and Nigeria. International air carriers designated to operate flights to and from Nigeria under a Bilateral Air Services Agreement (BASA) are free from the obligation to form a distinct entity in Nigeria under section 80 of the Companies and Allied Matters Act (CAMA), 2020.

Previously, foreign companies had to apply to the President through the National Council of Ministers to be exempted from forming a distinct Nigerian company. However, CAMA 2020 enables a foreign company to submit an exemption application directly to the Minister of Trade.

After acquiring the exemption, the foreign air carrier must notify the Corporate Affairs Commission (CAC) within 30 days, or the company may be liable to a fine. Furthermore, if an exempted foreign company fails to submit an annual report to the CAC, it would be penalised for each year of default.

CAMA 2020’s alteration intends to make it easier for foreign airlines designated under a BASA to operate in Nigeria without the need to establish a separate Nigerian the company. It is part of the bigger reforms in CAMA 2020 to improve the ease of doing business and attract more foreign investment to Nigeria.

Part 10 of the Nigerian Civil Aviation Regulations on “Commercial Air Transport by Foreign Air Carriers within Nigeria” must be met before the Nigerian Civil Aviation Authority (NCAA) can issue the Foreign Carrier Operating Permit.

Permits and Licenses

To operate commercially in Nigeria, air operators must get permissions and licenses from the NCAA. The licenses are outlined and discussed below.

  1. Airline Operating Permit (AOP): An Airline Operating Permit allows an air operator to conduct non-scheduled flights, such as charter operations.
  1. Air Transport Licence (ATL): An air operator must get an Air Transport Licence before conducting air transportation operations. This allows the operator to offer passenger and freight aviation services in Nigeria. The ATL is valid for five years and can be renewed.
  1. Air Operator Certificate (AOC): The NCAA issues an Air Operator Certificate (AOC) to confirm that operators follow International Civil Aviation Organisation (ICAO) regulations and recommended practices. The validity period is two years and can be renewed for additional two-year durations.

Procedure and Requirements for Issuing an Air Transport Licence (Atl)

An application for an ATL must be submitted in writing to the Director-General of the NCAA and signed by a fully authorised representative of the applicant company. This application must be submitted on or before a date that is at least 6 months before the ATL’s projected use date.

The application must contain the following:

  • The name and address of the applicant.
  • The type of air services to be provided.
  • The proposed operational base of the applicant.
  • Details of proposed routes to be operated where applicable.
  • The number and types of aircraft to be utilised.
  • Times and frequency of the services.

The following documents must accompany the application.

  • 4 copies of the certificate of incorporation of the applicant company and its MEMART (Memorandum & Articles of Association).
  • Statutory Corporate forms showing particulars of the applicant company’s directors. The Aviation Act requires that at least one member of the board of directors be an aviation specialist. In addition, Nigeria will hold the majority of the shares in the applicant company.
  • 4 copies of the Tax Clearance Certificates of the company and its directors (originals should also be presented for sighting).
  • 4 copies of the applicant company’s business plan.
  • A publication of a notice of the ATL application in two (2) national daily papers which should contain information on the application submitted to the NCAA.
  • Evidence of the applicant’s financial solvency/ability to undertake the business. Applicants are expected to prove that they are financially solvent to run operations for a period of three (3) months from the start of operations without resorting to any income from their operations.
  • Duly completed application forms from the NCAA.
  • Duly completed Personal History Statement forms and two (2) passport photographs in respect of each of the shareholders of the company having more than 5% equity shareholding.
  • Proof of payment of a non-refundable processing fee of N1,000,000.00(One Million Naira) to the NCAA.
  • A publication in an official Government gazette with the costs to be borne by the applicant.

The following should be noted about ATL applications:

  • No person shall operate an airplane in Nigeria without a security clearance provided by the government when the NCAA forwards Personal History Statement forms and other applicable documents to the ministry in charge of security clearances. 
  • The applicant will be required to consult with Airport Service Providers or the FAAN regarding approval of its home or operations location.
  • Following receipt of an ATL application, the Director-General of the NCAA may seek additional information from the applicant as deemed essential.
  • An annual utilisation fee of N200,000.00 (two hundred thousand Naira) must be paid to the authorities after an ATL is granted.
  • The results of the technical review of the application, followed by an appropriate suggestion, will be forwarded to the ATLC for consideration and approval to grant a licence, subject to receiving security clearance from the Ministry.
  • The NCAA Director-General may refuse to award an ATL if the applicant has not yet been cleared by the State Security Service.
  • Every commercial air transportation service provider must offer adequate insurance coverage for passengers, cargo, and third parties.
  • The NCAA will regularly investigate the financial health of an air transport or airline operations company.
  • Tariffs to be charged for passenger and baggage carrying must be lodged with the authority and made available to the public before they are implemented for scheduled services. The NCAA’s Directorate of Air Transport Regulation should be contacted for further information.
  • ATL holders are obligated to forward to the NCAA:
  • Monthly statistical return on aircraft movement and passenger uplift.
  • Details about flight schedules and adjustments to frequencies and new destinations.
  • An applicant seeking to run regional and international scheduled services should receive and seek additional professional advice on the Honourable Minister’s approved guidelines and designation requirements. 
  • ATL grants that are not used after they expire will not be renewed.

Procedure and Requirements for Issuance of an Airline Operations Permit

The requirements for obtaining an Airline Operations Permit include:

An application for this sort of license must be presented in writing to the Director-General of the NCAA and signed by the applicant’s lawfully authorised representative (ideally a lawyer) and must be submitted on or before a date no less than 6 months before the estimated date of AOP utilization.

This application must include: –

  • The applicant’s name and address.
  • The type of service to be offered.
  • The number and type of aircraft to be used.
  • Applicant’s proposed operational base.

The following documents must accompany the application.

  • 4 copies of the applicant company’s certificate of incorporation, MEMART (Memorandum and Articles of Association), and Statutory forms identifying the company’s directors and their contact information. At least one board member must be an aviation specialist, and Nigerians must own the majority of the company’s shares.
  • A statement of the company’s share capital.
  • 4 copies of the company’s and directors’ tax clearance certificates (originals available for sighting).
  • 4 copies of the company’s detailed business plan indicating its vision, mission, market analysis and strategy, company’s ownership structure, personnel plan, fleet acquisition plan, financial plan including sources of finance, balance sheet, break-even analysis, pro forma income projections (profit and loss statements), cash flow analysis, proposed fares for passengers or cargo, and other standard business plan requirements showing a detailed road map of how the application.
  • The Air Operating Permit application notice published in two (2) national daily newspapers. This publication should include material from the application submitted to the NCAA.
  • Evidence demonstrating the applicant’s financial solvency and ability to conduct the business. Applicants must demonstrate that they are solvent enough to run activities for three months from the start date without relying on any income from their operations.
  • Completed application forms obtained from the NCAA.
  • Completed Personal History Statement (PHS) forms and two (2) passport photographs for each of the company’s stockholders who own more than 5% of the shares.
  • Receipt of payment of N500,000.00 (Five Hundred Thousand Naira) non-refundable processing fee payable to the NCAA.
  • Evidence of appropriate insurance cover for passengers, cargo, and third-party liability.

The NCAA will publish the application in the official government gazette while it is being evaluated technically. The expense of this publication will be borne by the applicant. 

A security clearance through the NCAA, which forwards the applicant’s completed Personal History Statement forms and other essential papers to the ministry in charge of aviation in order to obtain security clearance from the president.

The applicant will need to communicate with airport service providers or the FAAN about the approval of its home or operational base.

It is important to note the following:

  • Upon receipt of an AOP award, the NCAA will be charged an annual use fee of N100,000.00
  • After receiving an AOP application, the Director-General of the NCAA may seek additional information from the applicant as considered necessary.
  • As soon as the ministry provides security clearance or consent, the results of the technical evaluation of the application, along with an appropriate recommendation, will be forwarded to the Air Transport Licensing Committee (ATLC) for consideration and approval to issue the AOP or otherwise.
  • If the applicant has not been cleared by the State Security Service, the Director-General shall refuse to award a permit.
  • An AOP grant that is not used at the end of its validity period will not be renewed.
  • AOP holders are also expected to provide the NCAA with monthly statistical returns on aircraft movements, cargo, and passenger uplift.

Procedures and Requirement for Issuing Air Operator Certificate

The application procedure begins with the completion and submission of the Pre-Application form for the granting of an AOC. The documents to accompany the application include:

  • Aircraft Flight Manual
  • Maintenance Equipment List for the aircraft to be utilised
  • Operations Manual
  • Operator’s Maintenance Management Exposition
  • Company Exposition
  • Maintenance Programme/Schedule for each aircraft type Training Programme
  • Any lease-purchase agreement on the aircraft, where applicable.

To obtain the Certificate, the operator must demonstrate their capability by meeting the following criteria:

  • Adequacy of documentation
  • Financial capability Assessment
  • Aircraft Conformity inspection
  • Aircraft Proving Test (at least 25 hours)
  • Emergency Evaluation/Ditching Demonstration
  • Adequate staffing and organization
  • Satisfactory Training Programme Implementation

Foreign Air Operators

The provisions of Part 10 of the Nigerian Civil Aviation Regulations on “Commercial Air Transport by Foreign Air Carriers Within Nigeria” must be met before the Nigerian Civil Aviation Authority (NCAA) issues the Foreign Carrier Operating Permit.

A foreign air operator shall not operate an aircraft in Nigeria unless it is so authorised by the Authority and holds associated operations specifications containing the special limitations and specific approvals issued to it by the Authority. To operate in Nigeria, foreign air operators must submit an application to the Authority using the approved form and procedures.

An application for approval to operate in the territory of Nigeria shall be accompanied by:

  • A certified true copy of a valid Air Operator Certificate and associated operations specifications issued to the foreign air operator by the Foreign Authority;
  • A copy of the approval page for a Minimum Equipment List for each aircraft type intended to be operated by the foreign air operator in Nigeria;
  • A copy of the current certificate of aircraft registration and certificate of airworthiness issued for each aircraft type proposed to be operated by the foreign air operator in Nigeria;
  • A copy of the insurance certificate;
  • A copy of the operational procedures and practices of the foreign air operator;
  • A copy of a document identifying the maintenance checks that are required to be performed for the aircraft of the foreign air operator while they are operated in the territory of Nigeria;
  • A copy of the maintenance contract between the foreign air operator and the Approved Maintenance Organization, where the maintenance is performed by an Approved Maintenance Organization approved by the Foreign Authority;
  • A copy of the air service agreement, containing a safety clause, allowing the foreign air operator to operate in the territory of Nigeria;
  • In the case of wet-leased aircraft, a copy of the approval of the Authority of the State of the Operator, with identification of the foreign air operator that exercises operational control of the aircraft;
  • In the case of a foreign air operator that does not hold an Air Operator Certificate issued by the Authority, a copy of the proposed air operator security programme; and
  • Any other document the Authority considers necessary to ensure that the intended operations will be conducted safely.

An applicant shall apply for the initial issue of operations specifications at least 90 days before the date of commencement of intended operation.

No foreign aviation operator may begin operations in Nigeria until the NCAA issues a Document of Authorization, Conditions, and Limitations.

The Authority will issue operations specifications to a foreign air operator to conduct commercial air transport operations in Nigeria, where the Authority is satisfied and has confidence in:

  • The validity of the certificates and licences associated with the operator;
  • The operator’s personnel and aircraft;
  • The operational capabilities of the operator; and
  • The level of certification and oversight applied to the activities of the operator by the Foreign Authority;
  • Following approval of the foreign air operator’s application to operate into the territory of Nigeria;
  • Upon a satisfactory administrative review of the documentation provided by the foreign air operator and
  • When it has established bilateral or multilateral agreements with the State of the Operator that includes in the agreement the safety clause; or
  • When it has not established bilateral or multilateral agreements with the State of the Operator, the Authority receives no significant safety findings or major deficiencies from available safety related information relevant to the foreign air operator.

Conclusion

This article explores the steps for a foreign corporation to obtain an aviation license to operate in Nigeria. To operate foreign air services in Nigeria, a Bilateral Air Service Agreement (BASA) must exist between Nigeria and the foreign operator’s country of origin. The foreign operator must satisfy the requirements of the Nigerian Civil Aviation Regulations on “Commercial Air Transport by Foreign Air Carriers Within Nigeria” before the Nigerian Civil Aviation Authority (NCAA) can award the Foreign Operator Operating Permit.

No foreign air operator is permitted to start operations unless the NCAA has given a Document of Authorisation, Conditions, and Limitations. The procedures ensure that foreign airlines meet the essential safety, security, and regulatory standards before being granted permission to operate in Nigeria’s aviation industry.

Note: The content of this article is anticipated to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstance.

By Adeola Oyinlade & Co.

Adeola Oyinlade & Co.; a full-service law firm in Nigeria provides help and offers advisory to both local and foreign clients on aviation related matters including how to process aviation licenses in Nigeria. 

Need help? Kindly contact us using the details below:

Email: info@adeolaoyinlade.com

Mobile: +234 803 826 7683 / +234 802 686 0247

What is a Microfinance Bank (MFB)?

Microfinance Bank (MFB) is any company licensed by the Central Bank of Nigeria (CBN) to carry on the business of providing financial services such as savings and deposits, loans, domestic funds transfer and non-financial services to microfinance clients.

What are the specific objectives of the new microfinance policy?

The specific objectives of the microfinance policy are to: 

  1. Make financial services accessible to a large segment of the potentially productive Nigerian population which would otherwise have little or no access to financial services.
  2. Provide synergy and mainstreaming of the informal sub-sector into the national financial system.
  3. Enhance service delivery by microfinance institutions to micro, small and medium entrepreneurs (MSMEs).
  4. Contribute to rural transformation by mobilizing savings.
  5. Promote linkage programme between microfinance institutions (MFIs), Deposit Money Banks (DMBs), Development Finance Institutions (DFIs), specialized Funding institutions.
  6. Create employment opportunities and increase the productivity and household income of the economically active poor in the country, thus enhancing their standard of living.
  7. Promote a platform for microfinance service providers to network, exchange view and share experience.

Who can establish a Microfinance Bank?

Microfinance bank can be established by individuals, groups of individuals, community development associations, private corporate entities or foreign investors.

What are the regulatory and operational framework for microfinance banks?

Microfinance banks are among the specialised banks and other financial institutions governed by the CBN’s supervisory guidelines outlined in Sections 61-63 of the Banks and Other Financial Institutions Act, 2020 (BOFIA) (as amended) and Section 33(1)(b) of the CBN Act 7 of 2007. The following regulations govern the operation of Microfinance Banks in Nigeria.

  • Central Bank of Nigeria (CBN) Act 2007;
  • Bank and Other Financial Institutions Act 2020;
  • Central Bank of Nigeria Guidelines for the Regulation and Supervision of Microfinance Banks in Nigeria, January 2020.

How many categories of MFB licences are available?

There are four (4) categories available to promoters based on geographical spread:

  1. Tier 1 Unit Micro Finance Bank (with urban authorization): They are licensed to operate in banked and high-density regions, with a maximum of four (4) branches outside the main office within five (5) contiguous Local Government Areas recognized by the CBN. The minimum share capital for this type of licensing is N200,000,000 (Two Hundred Million Naira).
  1. Tier 2 Unit Micro Finance Bank (with rural authorization): They are licensed to operate solely in rural, unbanked, or underbanked areas and may open one (1) branch outside the main headquarters within the same Local Government Area. A Tier 2 Unit Micro Finance Bank has a minimum share capital of N50,000,000 (fifty million naira).
  1. State Microfinance Bank: This type of Microfinance Bank is permitted to operate in a single state or the Federal Capital Territory. It is permitted to open branches within the same state or FCT, subject to prior written approval from the CBN for each new branch or cash center. It may not open more than two branches in the same Local Government Area (LGA) unless it has established at least one branch or cash center in each LGA in the State. A newly licensed State Microfinance Bank cannot begin operations with more than ten (10) branches. State microfinance banks must maintain a minimum capital of one billion naira (₦1,000,000,000).
  1. National Microfinance Bank: This Microfinance Bank is authorized to operate in multiple states, including the Federal Capital Territory. A newly licensed National Microfinance Bank is prohibited from commencing operations with more than ten (10) branches. National microfinance banks must have a capital barrier of five billion naira (₦5,000,000,000).

What are the permissible business activities of the Microfinance Bank?

A Microfinance bank is allowed to offer the following services to its clients:

  • Acceptance of various types of deposits including savings, time, target and demand deposits from individuals, groups and association;
  • Provision of credit to its customers;
  • Provision of housing micro loans;
  • Provision of ancillary services such as capacity building on record keeping and small business management and safe custody;
  • Issuance of debentures to interested parties to raise funds from members of the public with the prior approval of the CBN;
  • Collection of money or proceeds of banking instruments on behalf of its customers including clearing of cheques through correspondent banks;
  • Act as agent for the provision of mobile banking, microinsurance and any other services as may be determined by the CBN from time to time, within the geographic coverage of its licence;
  • Appoint agents to provide financial services on its behalf in line with the CBN Agent Banking Guidelines, within the geographic coverage of its licence;
  • Provision of payment services such as salary, gratuity, pension for employees of the various tiers of government;
  • Provision of loan disbursement services for the delivery of the credit programme of government, agencies, groups and individual for poverty alleviation on non-recourse basis;
  • Provision of banking services to its customers such as domestic remittance of funds;
  • Maintenance and operation of various types of account with other banks in Nigeria;
  • Investment of its surplus funds in suitable money market instruments approved by the CBN;
  • Operation of micro leasing facilities, microfinance related hire purchase and arrangement of consortium lending;
  • Participate in CBN Intervention Fund and funds other sources;
  • Provision of microfinance related guarantees for its customers;
  • Financing agricultural inputs, livestock, machinery and industrial raw materials to low- income persons;
  • Investment in cottage industries and income generating projects for low-income persons as may be prescribed by the CBN from time to time;
  • Provision of professional advice to low-income persons regarding investments in small businesses;
  • Issuance of domestic commercial paper subject to the approval of the CBN;
  • Provide financial and technical assistance and training to microenterprises; and
  • Any other permissible activity as may be approved by the CBN from time to time.

What are the non-permissible business activities of the Microfinance Bank?

Microfinance banks are forbidden from providing the following financial services:

  • Foreign currency transactions, except foreign currency borrowings;
  • International commercial papers;
  • International corporate finance;
  • International electronic funds transfer;
  • Clearing house activities;
  • Collection of third-party cheques and other instruments for the purpose of clearing through correspondent banks;
  • Dealing in land for speculative purposes;
  • Dealing in real estate except for its use as office accommodation;
  • Provision of any facility for speculative purposes;
  • Leasing, renting, and sale/purchase of assets of any kind with related parties and/or significant shareholders (five per cent or more of the equity) of the MFB, without the prior written approval of the CBN;
  • Financing of any illegal activities; and
  • Any activity other than those permitted as stated above or as may be prescribed by the Central Bank of Nigeria from time to time.

What are the procedures and requirements for obtaining a Microfinance Bank Licence?

The application for a Micro-Finance Bank license will be made in three (3) phases, as follows:

  • Pre-licensing Presentation
  • Approval-in-Principle
  • Final License
  1. Requirements for Pre-licensing Presentation

Prior to submitting a formal application for a license, promoters and investors must provide the CBN with a pre-licensing presentation on the proposed microfinance bank’s business case.

  1. Requirements for Approval-in-Principle

Before submitting an Approval-In-Principle (“AIP”) application to the CBN, promoters and investors must first reserve the name of their prospective MFB with the Corporate Affairs Commission (“CAC”).

A formal application for the grant of Approval-in-Principle shall be made to the Governor of the Central Bank of Nigeria. The following documents must be submitted alongside the application:

  • Evidence of payment of non-refundable application fee to the Central Bank of Nigeria;
  • Evidence of capital contribution made by each shareholder;
  • Evidence of minimum capital deposit in line with Section 4.2.7 of this Guidelines, to be verified by the CBN;
  • Evidence of name reservation with the Corporate Affairs Commission (CAC);
  • Detailed business plan or feasibility report which shall, at a minimum, include:
  • Objectives of the Microfinance Bank;
  • Justification for the application;
  • Ownership structure in a tabular form indicating the name of proposed investor(s), profession/business and percentage shareholdings;
  • Sources of funding of the proposed equity contribution for each investor;
  • Where the source of funding the equity contribution is a loan, such shall be a long-term facility of at least 7-year tenor and shall not be taken from the Nigerian banking system;
  • Organizational structure, showing functional units, responsibilities, reporting relationships and grade of heads of departments/units;
  • Schedule of services to be rendered;
  • Five-year financial projection of the proposed bank indicating expected growth, profitability and the underlying assumptions; and
  • Details of information technology requirements and facilities.

For institutional investors, promoters shall forward the following additional documents:

  • Certificate of Incorporation and certified true copies of other incorporation documents.
  • Board resolution supporting the company’s decision to invest in the equity shares of the proposed bank;
  • Names and addresses (business and residential) of owners, directors and their related companies, if any
  • Audited financial statements & reports of the company and Tax Clearance Certificate for the immediate past 3 years.
  • Draft copy of the company’s Memorandum and Articles of Association (MEMART). At a minimum, the MEMART shall contain the following information:
  • Proposed name of the MFB
  • Objects clause
  • Subscribers to the MEMART
  • Procedure for amendment
  • Procedure for share transfer/disposal
  • Appointment of directors
  • A written and duly executed undertaking by the promoters that the bank will be adequately capitalized for the volume and character of its business at all times;
  • For regulated foreign institutional investors, an approval or a ‘no objection letter’ from the regulatory authority in the country of domicile;
  • Shareholders’ agreement providing terms for disposal/transfer of shares as well as authorization, amendments, waivers, and reimbursement of expenses;
  • Statement of intent to invest in the bank by each investor;
  • Technical Services Agreement, where applicable;
  • Detailed Manuals and Policies covering:
  • Credit Policy Manual;
  • Internal Audit Manual;
  • Asset/Liability Management Policy (ALM Policy);
  • Accounting policies and principles;
  • Roles and responsibilities of the senior management officials responsible for financial management;
  • Treasury operations, including funds management, vouchers, payroll and procurement;
  • Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) Policy;
  • Enterprise-Wide Risk Management Framework;
  • Whistle Blowing Policy;
  • Code of Ethics and Business Conduct;
  • Bank Verification Number (BVN) and Tax Clearance Certificate of each member of the Board and significant shareholders.
  • Duly signed resume and valid means of identification for proposed shareholders of proposed MFB;
  • Criteria for selecting board members;
  • Board composition, directors’ duly signed resumes and valid means of identification. The size and composition of the board shall comply with the provision of the CBN Code of Corporate Governance for MFBs;
  • Consolidated statement of account showing the capital contribution for all shareholders;
  • Completed Fitness and Propriety Questionnaire; and sworn declaration of net worth executed by the proposed shareholders, directors and management personnel;
  • Any other information that the CBN may require from time to time.

It is worthy of note that the minimum and maximum number of Directors on MFB boards are five (5) and seven (7) for Unit MFBs; five (5) and nine (9) for State MFBs; and seven (7) and twelve (12) for National MFBs.

Also, take note that at least two (2) members of the Board of Directors, other than the Executive Directors, must have banking or comparable financial industry experience.

Upon receipt of an application, the CBN must convey its decision to the applicant within 90 days. If the CBN is pleased with the application, it will give an Approval-in-Principle (AIP) to the applicant.

Registration with the National Association of Microfinance Banks (“NAMB”) is required after acquiring an AIP.

  1. Requirements for granting of final license

The CAC will finalise the incorporation of the MFB after the AIP is granted.

Then, promoters of a proposed microfinance bank shall file an application with the CBN for the issuance of a final licence, addressed to the Governor of the Central Bank of Nigeria, no later than six (6) months after receiving the AIP. The following documents must be included with the application.

  • Evidence of payment of non-refundable licensing fee to the Central Bank of Nigeria;
  • Certified true copy (CTC) of the Certificate of Incorporation of the bank;
  • CTC of MEMART;
  • CTC of Form CAC 1.1 (Application for Registration of Companies);
  • Evidence of the location of the Head Office (rented or owned) for the take-off of the business;
  • Schedule of changes, if any, in the Board, Management and Shareholding after the grant of AIP;
  • Evidence of ability to meet technical requirements and modern infrastructural facilities such as office equipment, computers, and telecommunications, to perform the bank’s operations and meet CBN and other regulatory requirements;
  • Copies of letters of offer and acceptance of employment in respect of the management team;
  • List of proposed top management staff and duly signed resume stating their qualification (including photocopies of academic and professional credentials), experience, records of accomplishments and valid means of identification;
  • Comprehensive plan on the commencement of the bank’s operations with milestones and timelines for roll-out of key payment channels; and 
  • Board and staff training programme.

Before obtaining a final license, the Central Bank of Nigeria must conduct an inspection of the proposed bank’s facilities and premises, which include:

  • Checking the physical structure of the office building and infrastructure provided for the take-off of the MFB;
  • Sighting the original copies of the documents submitted in support of the application for license;
  • Meeting with the Board and Management team whose resumes had earlier been submitted to the CBN;
  • Verifying the capital contributions of the promoters; and
  • Verifying the integration of its infrastructure with the National Payments System.

If the CBN approves the Application for Final Licence, it may award Final Licence to the Microfinance Bank.

Also, shareholders must deposit the Minimum Share Capital with the CBN when submitting an application for AIP. This amount may or may not be invested by the CBN, but it is refundable (with or without interest) at the end of the process.

What is the estimated timelines for granting licence?

The estimated timeline for granting an AIP is 3 to 6 months after submitting an application.

Likewise, the projected timeline for granting a Final Licence is 3 to 6 months after submitting an Application for Final Licence.

What are the step-by-step procedure of how to apply for Microfinance Bank license online?

The Central Bank of Nigeria (CBN) has launched a new online platform for submitting microfinance bank (MFB) license applications, known as the CBN Licensing, Approval, and Other Requests Portal. The new online platform replaces the previous laborious approach of physically submitting MFB license applications to the CBN. These are the steps to apply for an MFB license online.

  • Open a browser, input the URL https://larp.cbn.gov.ng/to access the application. On the navigation bar below, click on “Register”.
  • Select an “application type”, from the drop-down list above and then enter the proposed institution name (as reserved by CAC).
  • Enter the CAC Reservation Code.
  • Enter the Applicant details and submit the registration details. NOTE: If the proposed application name is already an existing financial institution, the system will not accept the name.
  • If the LGA of the proposed application is in a Tier 1 LGA location, you will be required to pay the minimum deposit based on the location of the proposed MFB.
  • If the LGA of the proposed MFB is not in a Tier 1 LGA location, you may select the Tier of the application you want to register the application.
  • The applicant’s email address must be verified. This will involve an OTP being sent to the applicant’s email address. After the verification, the user can continue with the registration process.
  • The applicant would be required to input the OTP that was sent to their email to complete verification to proceed.
  • The applicant would be required to check the “I agree with the terms of use” and click on register to complete the registration process.
  • Once the registration is completed, an email will be sent, and the applicant will be required to make payments for the Application Fee and the Minimum Capital Deposit at his preferred Bank within 72 hours.
  • Then see screenshot for the mail received upon registration:
  • Once the Bank has made your payment, they will give the applicant a printout. The applicant is expected to wait for 24 – 72 hours for the payment to be verified and approved by CBN. When the payment process has been completed, an email with the applicant username and default password will be used to log into the system.
  • Thereafter, the applicant will be prompted to change your password. Ensuring that the password consists of Uppercase, Lower Case, Number, Special Character, and it must be a minimum of 8 characters.

In conclusion, a Microfinance Bank in Nigeria is a specialized financial institution dedicated to providing affordable and accessible banking services to the unbanked and underserved portions of the population, particularly micro-entrepreneurs and small enterprises.

The CBN reserves the right to oversee, regulate, or even revoke a registered MFB’s license in accordance with the authority granted to it by the Banks and Financial Institutions Act 2020, so anyone interested in establishing a microfinance bank in Nigeria should proceed with caution and demonstrate competence and professionalism.

Note: The content of this article is anticipated to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstance.

By Adeola Oyinlade & Co.

Adeola Oyinlade & Co.; a full-service law firm in Nigeria provides help and offers advisory to both local and foreign clients on banking related matters including how to process microfinance bank licenses in Nigeria. 

Need help? Kindly contact us using the details below:

Email: info@adeolaoyinlade.com

Mobile: +234 803 826 7683 / +234 802 686 0247

Introduction

The importance of consumer protection has grown in recent years. Industrialization has led to the creation and distribution of advanced items worldwide. Consumer protection legislation must be broad and dynamic to protect against potential risks. Consumers are exposed to greater hazards. Consumer dissatisfaction is common when sellers refuse to address legitimate issues and the government fails to protect consumers’ interests. Consumers need to be safeguarded from trade misconduct. Unfair marketplace practices can include misleading advertising, unfair marketing, and exclusion clauses.

Nigeria has a number of laws and regulatory authorities in place to safeguard customers against potentially dangerous products, goods, and services. The Federal Competition and Consumer Protection Act (FCCPA) of 2019 is a vital piece of legislation that promotes fair, efficient, and competitive markets while protecting citizens from hazardous products and services.

This article examines the consumer’s rights and remedies, as well as the numerous legal frameworks that enable a customer who experienced damages, loss, or injury as a result of consuming or using defective products or services to seek remedy.

Meaning of a consumer

A consumer is described as someone who buys goods and services for personal use rather than for manufacturing or reselling. This concept applies to entities such as companies, firms, communities, agencies, and governments that are influenced by products, goods, or services from manufacturers.

Section 2(d) & (11) of the Consumer Protection Council Act used the terms “consumer” or “communities”. Section 6(1) used the “term consumer or community” while Section 6(2) utilized the terms “a consumer, or a person having an interest in a matter”. Section 32 of the Consumer Protection Council Act states “in this Act unless the context otherwise requires – “consumer” means an individual who purchases, uses maintains or disposes of product or otherwise.” A communal consideration of the above reveals that a consumer could be an individual within the intendment of Section 32 of the Act. It could be a community or communities within the import of Section 2 (d) and (1) of the Act or Section 6 (1). While Section 6 (2) states that a consumer “could be a consumer or a person having an interest in a matter”. See FCMB v. Consumer Protection Council (2021) LPELR-55804(CA)

Legal Framework for the Protection of Consumers’ Rights

The protection of the duties owed by the manufacturer to the customers is provided by numerous legal frameworks. Some of these legislations are:

  • The Federal Competition and Consumer Protection Act (FCCPA)
  • Sales of Goods Act.
  • Food, Drugs and Related Products (Registration, etc) Act.
  • The Tobacco Smoking (Control) Act.
  • The Trade Malpractices (Miscellanous Offences) Act.
  • The Counterfeit and Fake Drugs and Unwholesome
  • Processed Food (Miscellaneous Provision) Act.
  • Standard Organization of Nigeria Act.
  • National Agency for Food and Drug Administration and Control Act.
  • The Law Reform (Tort) Laws of Lagos. 

Rights of a Consumer

A right can be described as a power, privilege, or immunity provided by a constitution, statute, or case law, or claimed through long usage. Consumer’s rights include but not limited to:

  • Right to Information and education in Plain Language
  • Right of Disclosure of Prices of Goods and Services
  • Right to Adequate Trade Description and Labelling
  • Right to Disclosure of Second-Hand or Reconditioned Goods
  • Right to be Given Adequate Information of Every Transaction
  • Right Not to be Given a Condition Before Making a Purchase
  • Right to Cancel Advance Reservation, Booking or Order
  • Right to Reject Goods Before Completing the Transaction
  • Right to Safe and Quality Goods
  • Right to basic needs
  • Right to safety
  • Right to choose and healthy environment
  • Right to redress

Duties of manufacturers to consumers

Manufacturers have several duties and obligations to consumers under Nigerian law.

They include:

  • Duty to provide accurate information: Manufacturers have an obligation to provide consumers with honest and accurate information and descriptions about their products and services. They cannot misrepresent the nature, quality, or features of their products.
  • The duty to withdraw hazardous goods: If a manufacturer becomes aware of any unforeseeable hazard emerging from the usage of products they have already placed on the market, they have a duty to withdraw those hazardous products.
  • Duty to Properly Label Goods: Under the FCCPA, manufacturers are required to correctly label goods so that they can be easily traced. Breach of this obligation can lead to imprisonment or fines.
  • Implied duty of quality and suitability: Manufacturers have an implied duty to ensure that their products adhere to their description, are of merchantable quality, and suitable for their intended purpose. This duty cannot be excluded by the contract.
  • Duty to maintain the product approval process: Manufacturers must maintain, manage, and review a process for approving new products or modifications to existing ones. This approval procedure must take into account the target market, distribution strategy, and fair value analysis.

Remedies available to consumers of defective products.

When there is an injury, there must be a remedy. Consumers can sue manufacturers for failing to fulfill their duty of care by producing defective products. The consumer might take legal action against manufacturers in the following ways:

  • Institute criminal proceedings against offending party
  • Sue for a breach of strict liability
  • Sue for breach of contract of sale
  • Sue for negligence
  • Consumers can claim damages and compensation if they sustained injury, loss, or damage due to the use of defective or hazardous goods.
  • Consumers can file a warranty claim if the product does not satisfy the warranty terms.

Remedy under Criminal Law

The Federal Competition and Consumer Protection Act prescribes criminal punishments for the violation of consumer rights, including imprisonment and fines. According to Nigeria’s Criminal and Penal Code Acts, selling unfit-for-consumption items is an offense punishable with imprisonment.

Other statutory offenses apply to the manufacturing and distribution of specific products in the country. Examples include the Food and Drug Act, Weight Act, Trade Practices (Miscellaneous Offences Provision) Act, Counterfeit Fake Drugs Act, and Unwholesome Food (Miscellaneous Provision) Act.

Strict Liability for Defective Products

In tort, a manufacturer is held strictly accountable if a defective product is placed on the market and causes harm to consumers. To prove causation, the consumer must establish that the damage was caused by the faulty product and that it was defective when it left the manufacturer’s control. Typically, circumstantial evidence is used to prove that a flaw was present in the product when it left the manufacturer’s control and caused the injury.

The burden to prove an allegation of food poison is on the Claimant. He who asserts must prove. A high standard of proof is required from the Complainant in food poisoning cases. Thus, there must be proven direct link between the food or drink ingested and the subsequent ailment of the complainant. See NBC Plc v. Olarewaju (2006) LPELR-7696(CA)

The Federal Competition and Consumer Protection Act holds manufacturers strictly liable for any damages caused by defective goods, whether totally or partially. This liability cannot be excluded or limited under contract.

Lagos State’s Law Reform (Torts) Law imposed strict liability on producers of defective products, establishing a statutory cause of action. The law holds manufacturers, producers, importers, suppliers, and retailers liable for any damages caused by a defective product.

Remedies under contract law

In Nigeria, the Sales of Goods Act governs the contract of sale of goods, and manufacturers are required to fulfill implied obligations under the law.

According to the Sales of Goods Act, a contract for the sale of goods by specification implies that the commodities must meet the specifications. If the consumer specifies the purpose of the products, the seller is obligated to ensure that they are reasonably suited for that purpose and of merchantable quality. If the seller violates any implied guarantees or conditions, the buyer might seek damages for breach of warranty or condition.

Consumers can reject the goods and request a return if the goods do not adhere to the contract of sale and obtain a full or partial refund. If a consumer requests a repair or replacement, the business must do it within a reasonable period and without undue inconvenience to the consumer.

Sue for Negligence

Negligence is a tortuous liability, it means conduct that is blame worthy, because it falls short of the legal standing required of a reasonable person in protecting individuals against foreseeable risk, harmful act of another member of the society. Therefore, negligent behavior towards others, gives them right to be compensated for the harm to their body, property, mental well-being, financial status or relationship. It therefore suffices to say that the tort of negligence arises when a legal duty owed by the defendant to the plaintiff is breached. For a plaintiff to succeed in an action for negligence he must proof by preponderance of evidence or the balance of probabilities that (a) The defendant owed him a duty of care (b) The duty of care was breached (c) The defendant suffered damages arising from the breach. See the cases of Anyah v. Imo Concorde Hotels (2002) SC (part 11) 77

Negligence properly connotes the complex concept of duty, breach and damage thereby suffered by the person to whom the duty was owing. See the case of Lochgelly Iron and Coal Co. v. M’mullan (1934) A.C. 1 at 25. This definition spells out for us the three basic components of the torts of negligence:

  1. duty of care
  2. breach of the duty of care
  3. damage caused by the breach.

It is settled that for a claim in negligence to succeed, the plaintiff must necessarily prove that the defendant owes him or it a duty of care and that it was in breach of that duty. See Oyidiobu v. Okechukwu (1972) 5 SC 191. The consumer must prove that the goods was defective due to the manufacturer’s negligence and that the defect resulted in harm. The manufacturer is held to the standard of care that a prudent person in the same situation would use when designing, producing, and warning about a product to prevent injury to individuals who may be exposed to it.

Consumers are owed a duty of care, even if they may not be expected to qualify. The foreseeability rule is a significant factor in identifying potential consumers. The concept was developed in Heaven v Pender (1883) 11QBD 503 and endorsed by Lord Atkin in the case of Donoghue v. Stevenson (1932) A.C. 562 at 580. The court acknowledged a duty between a consumer and a manufacturer, stating that a manufacturer of products, which he sells in such a form as to show that he intended them to reach the ultimate consumer in the form in which they left him with no reasonable possibility of intermediate examination, and with the knowledge that the absence of reasonable care in the preparation or putting up of the products will result in an injury to the consumer’s life or property, owes a duty of care to the consumer to take that reasonable care.

Nigerian courts adopted the principle established in the aforementioned case in point. The manufacturer must take reasonable care to prevent injury to individuals who use or consume the product as intended. In Osemobor v Niger Biscuit (1973) 7 CCHCJ 71, the court held that a person who manufactures goods, which he intends to be used or consumed by others, is under a duty to take reasonable care in their manufacture, so that they can be used or consumed in the manner intended, without causing physical damages to person or property.

Damages

If a claimant can prove that a duty was breached, resulting in injury, the claimant is entitled to compensation in the form of damages. It is important to point it out straightaway that once a Claimant leads evidence which creditably and cogently established a duty of care owed him by the Defendant, the breach of that duty by the Defendant and the resultant damages, he is entitled to his claim for damages for negligence. But if on the other hand, the Claimant fails to establish by credible evidence all or any of the three ingredients of the tort of negligence, such a claim fails and ought to be dismissed. See Oyidiobu v. Okechukwu (1972) 5 S.C. Page 191; Ehimen v. Benin Electricity Distribution Co. Plc (2016) LPELR-40814(CA)

Government agencies and other organizations (Alternative Dispute Resolution) 

The Federal Competition and Consumer Protection Council (FCCPC): In Nigeria, the FCCPC advises and assists consumers in seeking relief for defective products and services. Consumers can file a written complaint or seek remedy through a State Committee if they have suffered loss, injury, or damage as a result of using defective or dangerous goods.

Defences available to the manufacturers

Manufacturers of defective products and services have several defenses available to them in product liability cases. 

They are as follows:

  • Contributory negligence or misuse of the product by the user: If the user acts carelessly or misuses the product in an unforeseen manner, so contributing to their own injury, the manufacturer’s liability may be reduced or eliminated. For instance, failing to use the safety features offered by the manufacturer.
  • Using the product despite being aware of a harmful defect: If the user intentionally and unreasonably assumes the risk of a known hazard, the manufacturer may not be held liable for the subsequent injuries. For example, deliberately electrocuting oneself with a product.
  • The product was not unreasonably dangerous: If a product has known inherent dangers, and the seller clearly advises of the dangers while properly packaging and labeling the goods, the seller may not be held strictly liable. This could apply to experimental pharmaceuticals or other goods that have recognised dangers.
  • Significant alteration after leaving the manufacturer’s control: If a product was materially altered after leaving the manufacturer’s control, and the alterations were not foreseeable and were a superseding cause of the damage, the manufacturer may be absolved of liability.
  • Cutting-edge defences: In design defect lawsuits, a manufacturer may avoid liability by demonstrating that they employed the best available technology and design to ensure the product’s safety. If there are no known safer designs, the manufacturer may not be liable.
  • Limitation period: If an action is not commenced within the time frame specified by the Act, it becomes statute-barred. In some States, tort actions have a six-year limitation period.
  • The claim is against the person who did not supply the product in question.
  • The product was not produced or offered in the course of business.
  • The defect did not exist when the product was distributed.

Conclusion

Consumers in Nigeria have several legal remedies available to seek redress against manufacturers of defective products, goods, and services. These remedies include seeking redress through State Committees, filing civil lawsuits, claiming compensation, and relying on regulatory enforcement. 

Various laws and regulations protect Nigerian consumers, and criminal sanctions are imposed for contraventions of consumer rights. The Federal Competition and Consumer Protection Council Act being the primary legislation that establishes consumer rights and empowers regulatory agencies to enforce these rights. The laws aim to promote fair competition, prohibit unfair practices, and ensure consumers receive safe and quality products.

Note: The content of this article is anticipated to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstance.

By Adeola Oyinlade & Co.

Adeola Oyinlade & Co.; a full-service law firm in Nigeria provides help and offers advisory to both local and foreign clients including consumers and manufactures on goods, products and services related matters in Nigeria. 

Need help? Kindly contact us using the details below:

Email: info@adeolaoyinlade.com

Mobile: +234 803 826 7683 / +234 802 686 0247

Who are bank customers?

Generally, a customer of a bank is someone who has an account with a bank, or without having an account the relationship of banker and customer exists. In the latter case, some money transaction must connect the banker and the customer but must arise from the nature of a contract. See, Union Bank of Nigeria Plc. V. Integrated Timber & Plywood Producers Ltd. (2000) 12 NWLR (pt. 680) 99 (CA). 

A bank customer is any person having an account with a bank or for whom a bank has agreed to collect items and includes a bank carrying an account with another bank as to letters of credit, a buyer or other person who causes an issuer to issue credit or a bank which procures issuance or confirmation on behalf of that bank’s customer. See, Inland Bank (Nig) Plc v. Ruhanti (Nig) Ent Ltd &Ors(2010) LPELR-4324(CA)

What is the relationship between a bank and its customer?

The relationship between a banker and its customer is founded on simple contract. It is a settled principle of banking law that any money paid into a bank belongs to the banker from the moment of such payment. Thus, creating as between the banker and the customer a debtor/customer relationship. When money is paid by a customer into the bank, there is a contract between the banker and the customer in which the banker receives the money as a loan from the customer against the promise by the banker to honour the customer’s cheque or other orders of the customer. The law of contract clearly requires that both parties to a contract must fulfill their contractual obligations. 

A bank has a duty under its contract with its customer to exercise reasonable care and skill in carrying out its part with regard to the operations within its contracts with its customers. This duty extends to the whole range of banking business within the contract with the customer. This duty applies to interpreting, ascertaining, and acting in accordance with the instructions of the customer. 


A banker and customer relationship is also one rooted in trust and confidence and this is the only reason a person would confidently entrust his hard-earned money to a bank in the belief that the money will be safe and well managed in the bank. It is based on this trust and confidence that a fiduciary relationship exists between the bank and the customer.

A fiduciary relationship arises whenever confidence is reposed on one side, and domination and influence result on the other, the relation can be legal, social, domestic, or merely personal. The banker/customer relationship places the bank in the position of a fiduciary to the customer and the bank therefore owes the customer a duty to exercise a high standard of care in managing the customer’s money.

It is settled in the law and practice of banking, that the relationship between a bank and its customer is contractual. See, GTB PLC v. MOBCOM TECHNOLOGIES LTD (2023) LPELR-60658(CA)

What are the rights of bank customers?

Bank customers in Nigeria have a number of rights protected by law, regulations, and conventions. These rights are aimed to protect customers’ interests and guarantee that banks treat them fairly. These rights include but not limited to the following:

Right to be informed: Bank customers have the right to complete, relevant, and true information regarding the products and services supplied by the bank. This includes the right to understand contractual terms and charges prior to entering into any agreement or contract. The bank is required to clarify these terms in a way that the consumer understands, allowing them to make sound decisions.

The Right to Choose: Customers have the right to choose from the variety of products and services provided by the bank at competitive rates. Banks are prevented from limiting consumers’ options or forcing them to accept goods or services that do not meet their demands. If a customer is dissatisfied with the bank’s service delivery, they have the right to terminate the contract or even the banking relationships, provided that all outstanding commitments have been met.

The Right to Safety: Banks must provide a safe and comfortable banking environment for all customers, free of dangers to their safety and health. This covers protection from accidents on the bank’s facilities as well as the negative impacts of pollution.

Right to privacy and confidentiality: Bank customers have the right to secure their account information from disclosure and unlawful access by third parties. There are some exceptions to this right, such as when the bank is required by law to make a disclosure or when the customer agrees to the disclosure.

The Right of Redress: Banks must provide a way for clients to communicate their complaints or dissatisfaction. This system should be free, open, transparent, timely, and convenient. Customers have the right to be kept informed about the resolution process and can request a review of the decision by the bank, the Central Bank of Nigeria (CBN), or a court if they are displeased.

The Right to Good Service: Banks and their staff must treat customers with respect and dignity to ensure they receive value for their money. Banks must respond appropriately to customer demands and complaints.

The Right to Equality: Customers deserve to be treated equally, regardless of financial status, physical ability, age, gender, race, or creed. Banks cannot give preferential treatment to certain customers at the expense of others, while they can distinguish between consumers based on the nature of the products or services purchased.

Right to a Free Monthly Statement of Account: Banks are mandated to give customers free monthly statement of account, although exceptional requests may incur fees. These rights are vital to ensure that bank customers in Nigeria are treated fairly and respectfully. They are intended to increase accountability, transparency, and consumer happiness in the banking industry.

Does a customer have a duty to the bank?

Yes, the duties that bank customers owe to banks in Nigeria are vital elements of the bank-customer relationship. Here are some fundamental duties that consumers are expected to perform.

Duty of Knowledge and Understanding: Customers must obtain relevant information and understand the terms and circumstances of their banking activities. This duty entails being informed about the bank’s products and services, as well as the related charges and contractual terms.

Duty of Care: Customers are to act with care and prudence throughout contacts with the bank. This duty involves delivering correct information, adhering to security measures, and behaving in good faith throughout transactions.

Duty of Honesty: Customers have a duty to provide accurate information to the bank and to conduct honestly in their transactions. This duty contributes to the integrity of the banking system and promotes transparency in financial transactions.

Duty to Comply with Instructions: Customers must follow the bank’s guidelines and policies while making transactions. This duty helps to optimize banking procedures and ensure smooth service delivery.

Duty to Report Issues: Customers must promptly report any anomalies, frauds, errors, or difficulties that arise during their banking activities. Timely reporting helps the bank address and resolve problems efficiently.

Duty to Maintain Security: Customers are responsible for the protection of their banking information, such as passwords, PINs, and account numbers. This duty prevents fraud and unauthorized access to accounts.

Duty to Cooperate: Customers are expected to comply with the bank during investigations, verifications, and compliance procedures. Cooperation helps resolve disagreements and guarantee regulatory compliance.

Duty of financial obligation: Customers must repay credit facilities and pay agreed-upon interest on loans and financial services provided by their banks on time. Banks are responsible for providing loans and financial services to customers, thus this is one of the customer’s main obligations. Customers must make timely payments to their bank to avoid default charges and penalties.

What are the possible remedies readily available to a bank customer?

There are numerous legal remedies accessible to bank customers in Nigeria who have been exploited or had problems with their banks:

Litigation: Customers may sue their bank in court for concerns such as unreasonable fees, unjustified deductions, fraud, negligence, breach of contract, etc. The relevant court depends on the amount involved: Magistrate Court for claims under ₦10 million in Lagos, and High Court for claims over ₦10 million.

Damages: Customers can pursue monetary damages from the bank in court for losses suffered owing to the bank’s negligence, violation of contract, or other unlawful acts. Damages may include amounts improperly deducted or not paid out by the bank, consequential losses for missing business chances and penalties, general damages for inconvenience and mental distress.

Where the banker fails to perform his duty of care and professional diligence in his dealings with the customer, he may be held liable for breach of contract, and the customer may be able to recover damages.

Specific Performance: A court may order the bank to fulfill its contractual responsibilities, such as paying genuine claims or correcting erroneous debits. This remedy is useful when the damages alone are insufficient.

Injunction: A court may grant an injunction to prevent the bank from conducting specific acts, such as closing a customer’s account without notice or exposing sensitive information. Injunctions are temporary remedies that maintain the status quo until the lawsuit is determined.

Restitution: The court may order the bank to pay back any unjust enrichment received at the customer’s expense, such as excessive fees and interest. Restitution seeks to rectify the bank’s wrongful profits.

Debt Recovery: If a bank makes an error in transferring funds to a customer’s account, they must return the money. If they refuse, the bank may acquire a court order to debit the account or reclaim the funds through legal action.

Complaint to the Central Bank of Nigeria (CBN): The CBN has set up a Consumer Protection Department to handle customer complaints against banks. Customers can make complaints using the CBN’s official website, email, or postal mail. The CBN will investigate the allegation and urge the bank to address it.

Arbitration: Banks need to establish an internal dispute settlement procedure. If a customer is dissatisfied with the bank’s response, they can escalate their complaint to the Bankers’ Committee for resolution. If the case remains unresolved, it may be referred to the Chartered Institute of Bankers of Nigeria (CIBN) for arbitration.

Regulatory Enforcement: The CBN and the Federal Competition and Consumer Protection Commission (FCCPC) have the authority to initiate enforcement action against banks that violate consumer protection laws. This involves issuing fines, suspending licenses, and barring erring bank staff.

Finally, bank consumers in Nigeria have several legal options for seeking restitution and compelling institutions to meet their duties. Each case’s individual circumstances determine the proper treatment. Seeking expert legal counsel is advised to identify the best course of action.

Note: The content of this article is anticipated to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstance.

By Adeola Oyinlade & Co.

Adeola Oyinlade & Co., a full-service law firm in Nigeria provides help and offers advisory to both local and foreign clients on banking related matters in Nigeria.

Need help? Kindly contact us using the details below:

Email: info@adeolaoyinlade.com

Mobile: +234 803 826 7683 / +234 802 686 0247