Application

The Application for the registration or renewal of registration of all Medical Devices products required for each single medical device, medical device group, medical device family or medical device system should be submitted and processed on the NAFDAC Automated Product Administration and Monitoring System (NAPAMS) portal.

It is very important to state that a separate application form shall be submitted for each product.

Documentations

The following documents are required to be uploaded on the NAPAMS portal. After successful submission, all original documents listed below will be presented upon request:

1. The application letter addressed to the Director-General (NAFDAC), Attention: Director, Drug Registration & Regulatory Affairs Directorate, Ground Floor, NAFDAC Office Complex, Oshodi- Apapa, Express Way, Isolo, Lagos State.
2. Notarised Declaration. To be completed (typed), signed by Declarant and notarized by a Notary Public in Nigeria (for imported medical devices).
3. Power of Attorney or Contract Manufacturing Agreement. An applicant on behalf of a manufacturer outside Nigeria must file evidence of Power of Attorney from the manufacturer which authorizes him to speak for his principal, on all matters relating to the latter’s specialties. The Power of Attorney shall contain as follow:
4. Issued by the manufacturer of the product.
5. Signed by the Managing Director, General Manager, Chairman or President of the company, stating the names of the products to be registered. The power of attorney shall also indicate ‘Authority to register product with NAFDAC’.
6. State ownership of Brand name(s)/Trademark.
7. Notarized by a Notary Public in the country of manufacture.
8. Valid for at least five (5) years.
9. Contract Manufacturing Agreement: An applicant filing an application and being the owner of Brand name/Trademark, shall provide a Contract Manufacturing Agreement, which shall be signed by the applicant and the manufacturer. The Agreement shall be notarized by a Notary Public in the country of manufacture and signed by both parties stating names and designations of the signatories with the names of all the products to be registered and other relevant clauses clearly explained in an unambiguous language.
10. Certificate of Manufacture and Free Sale (for imported medical devices). The manufacturer must show evidence that the company is licensed to manufacture medical devices and that the sale of the product does not constitute a contravention of the laws of that country, i.e., Free Sale Certificate (Certificate of Manufacture and Free Sale). The Free Sale Certificate should:
11. Be issued by a relevant Health/Regulatory body in the country of manufacture
12. Indicate the name of manufacturer and products to be registered
13. Be authenticated by the Nigerian Embassy or High Commission in the country of origin. In countries where no Nigerian Embassy exists, any Commonwealth or ECOWAS country can authenticate the document.
14. Comprehensive Certificate of Analysis. The certificate of analysis must be presented on a letter- headed paper of the Quality Control Laboratory where the sample was tested/evaluated and should contain all relevant technical parameters of interest in addition the under listed information:
15. The brand name of the product
16. The batch number of the product
17. The manufacturing and expiry dates
18. The name, designation, and signature of the analyst.
19. Evidence of Business Incorporation by the Corporate Affairs Commission
20. Evidence of Registration of Brand Name with Trademark Registry in the Ministry of Industry, Trade and Investment. This should be registered in the name of the owner of the Trademark/Brand name
21. Product Labels/artwork should be in line with the labelling requirement under the Labelling Guidelines for Imported Medical Devices Section below
22. Letter of Invitation for Good Manufacturing Practice (GMP) Inspection (for imported medical devices): A letter of invitation to inspect the factory abroad shall be written by the manufacturer and shall state the following:
23. MANUFACTURER INFORMATION: Name of Company, full location address of factory (not administrative office address), e-mail, and current phone no. Details (name, phone number and email) of contact person overseas
24. LOCAL AGENT INFORMATION: Name of company, full location address, functional phone number. and e-mail address. Details (name, phone number and email) of contact person. Names(s) of product(s) for registration. 

Technical Documents

1. Declaration of Conformity

The manufacturer is required to attest that its medical device complies fully with all applicable Essential Principles for Safety and Performance as documented in a written “Declaration of Conformity” (DOC). At a minimum, this declaration should contain the following information:

a.         A statement that each device that is the subject of the declaration‒ complies with the applicable Essential Principles for Safety and Performance, has been classified according to the classification rules, and, has met all the applicable conformity assessment elements.

b.         A Global Medical Device code and term for the device(s).

c.         Date from which the Declaration of Conformity is valid.

d.         Name and address of the device manufacturer; and,

e.         The name, position, and signature of the responsible person who has been authorized to complete the Declaration of Conformity on behalf of the manufacturer.

1. Certificate of Compliance with Recognized Standards (where available) should be submitted
2. Product Dossier for In-vitro Diagnostics
3. Clinical Evaluation Report with Statistical Data for Novel Medical Devices including In-vitro diagnostics.
4. In Vitro Diagnostic Medical Device Market Authorization Table of Contents (IVD MA ToC), IMDRF/RPS WG/N13(Edition 2) FINAL:2019
5. Non-In Vitro Diagnostic Device Market Authorization Table of Contents (nlVDMAToC), IMDRF/RPS WG/N9(Edition 3) FINAL:2019

Note: All technical documents must be submitted in electronic format e.g., Flash drive

GMP Inspection

It is advisable that the applicant should visit the Drug Evaluation and Research (DER) Directorate section of the Agency’s website for more Information on the Inspection of manufacturing facility (for both imported and locally manufactured medical devices)

Import Permit (for imported medical devices)

Upon successful screening of documentation and review of supporting documents, a Permit to Import shall be issued electronically via the NAPAMS Portal to the applicant for the importation of Registration samples for Laboratory testing.

Submission of Products for Laboratory Analysis

Upon importation of Registration Samples (for imported medical devices), applicants are expected to submit same to the division for onward submission to the Laboratory for analysis. The following documents are expected to accompany the samples.

1. Letter for submission of Laboratory Samples
2. Evidence of payment to the Agency
3. Certificate of analysis
4. Evidence of submission for vetting

While registration samples for locally manufactured medical devices will be drawn by Drug Evaluation and Research (DER) Directorate.

Product Approval meeting

Upon satisfactory Documentation review, GMP inspection of the production facility and laboratory analysis of product (where applicable), products are presented for the Food and Drug Registration Committee (FDRC) Approval Meetings.

Issuance of Notification

For products approved at the meeting, an electronic Certificate of Product Registration is issued to the Applicant.

Labelling Guidelines for Imported Medical Devices

Labelling should be informative, accurate and in conformance with the Agency’s Medical Devices, invitro diagnostic and other related products Labelling Regulations and any other relevant Regulations.

All imported and locally manufactured medical devices should bear the following minimum information on the label:

1. Name of the device
2. Name and address of the manufacturer
3. The identifier of the device, including the identifier of a device that is part of a system, test kit, medical device group, medical device
4. Family or medical device group family (where applicable)
5. Batch or lot number
6. If the contents are not readily apparent, an indication of what the package contains, expressed in terms appropriate to the device, such as size, net weight, length, volume, or number of units
7. The words “sterile” if the manufacturer intends to sale the device in a sterile condition
8. The words “for single use only” if the device is intended for that purpose
9. the manufacturing and expiry date of the device expressed in month and year (where applicable) unless self-evident to the intended user, the medical conditions, purposes and uses for which the device is manufactured, sold or represented, including the performance specifications of the device if those specifications are necessary for proper use
10. the directions for use, unless directions are not required for the device to be used safely and effectively and
11. any special storage conditions applicable to the device
12. where a package that contains a device is too small to display all the information in

            accordance with (a-k) above, the directions for use shall accompany the device but need not be set out on the outside of the package or be visible under normal conditions of sell.

Failure to comply with the above listed requirements may result in the rejection of the application or lead to considerable delay in the processing of registration. This is why it is very important to appoint a well experienced Attorney when registering your product with NAFDAC in Nigeria.

Kindly note the following:

• A successful application will be issued a Certificate of Registration with a validity period of five (5) years.
• Registration of a product does not automatically confer Advertising Permit. A separate application and subsequent approval by the Agency shall be required if the product is to be advertised.
• NAFDAC reserves the right to revoke, suspend or vary a certificate during its validity period.
• Filing an application and/or paying an application fee does not confer registration status.
• Failure to respond promptly to queries or enquiries raised by NAFDAC on the application (within 90 working days) will automatically lead to the closure of the Application
• The timeline for product registration from acceptance of submissions to issuance of Registration number is one hundred and twenty (120) working days.
• Please note that the clock stops once compliances are issued.

In order to conclude the registration of the product within a reasonable time, it is advisable that applicants provide all the necessary documents promptly and also in the specified form. One of the factors that delay the registration process is the manufacturer’s inability to provide the correct documents on time. All the documents listed above must be submitted at the time of making the application for registration. Most importantly, please note that NAFDAC will only accept documents in English language.

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 leading full-service law firm in Nigeria provides help and offers advisory to both local and foreign clients on products registration with NAFDAC in Nigeria.

To see our service offerings, please contact us at [email protected] or visit www.adeolaoyinlade.com

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

Company registration in Nigeria in certain industries and economic sectors are govern by statues and other regulations in force that stipulate a minimum share capital threshold before a company can be successfully registered in Nigeria and commence business operation.

Having substantial share capital indicates that the company is viable, can raise additional funds if required, instill confidence in potential investors and lenders as many of these industries are highly regulated and require the investment of large sums of money.

The list below are various industries and their required minimum share capital before they can be successfully registered with Corporate Affairs Commission (CAC) in Nigeria. 

However, it should be noted that the minimum share capital threshold for company registration in Nigeria with foreign participation is N100 million Naira. A person seeking to set up a business in Nigeria may seek experienced corporate law experts’ guide on how to successfully register a company in Nigeria.  

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 leading full-service law firm in Nigeria provides help and offers advisory to both local and foreign clients on company registration, corporate and commercial law in Nigeria. 

To see our service offerings, please contact us at [email protected] or visit www.adeolaoyinlade.com

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

Land ownership? 

Land ownership refers to the legal right to possess, use, and manage land. It is the state of having legal title to land, allowing the owner to control its use and derive benefits from it. This includes the right to sell, lease, or develop the land as per applicable laws.

How is land ownership transferred in Nigeria?

Ownership of land in Nigeria can be transferred through several methods, each with its own legal implications and procedures. The primary methods include:

1. Sale of Land

This is the most common method of transferring land ownership. It involves a contractual agreement between the seller (vendor) and the buyer (purchaser), where ownership rights are exchanged for monetary compensation. The process typically includes:

• Drafting a Contract of Sale that outlines the terms of the transaction.
• Executing a Deed of Assignment to formally transfer ownership.
• Obtaining the necessary Governor’s Consent as required by the Land Use Act of 1978.

2. Gift of Land

Land can also be transferred as a gift, which involves no monetary exchange. Key points include:

• The transfer must be voluntary, with the donor’s intention to gift the land clearly established.
• A Deed of Gift should be executed to document the transaction, and it should be registered to ensure legal validity.

3. Exchange of Land

This less common method involves two parties swapping ownership of their respective properties. The process requires:

• A mutual agreement between both parties.
• Execution of separate Deeds of Assignment for each property involved in the exchange.

4. Mortgage

In a mortgage arrangement, land is used as collateral for a loan. There are two types:

• Legal Mortgage: The lender obtains a legal interest in the property until the loan is repaid.
• Equitable Mortgage: The borrower retains some rights but gives the lender an equitable interest in the property.

5. Inheritance

When a property owner dies, land ownership can be transferred through probate, where assets are distributed according to a will or letters of administration in intestacy laws.  The heirs or beneficiaries must get the deed of assent, which is the legal instrument that transfers the inherited property.

The legal steps for transferring land ownership in Nigeria.

Before land title can be transferred from a person to another, there are essential legal steps required. They are as provided below:

Step 1: Conduct due diligence to verify the Land title.

Before transferring land ownership, the prospective buyer must ensure that the seller has a proper title to the land and should be able to do as follow:

• Search the Land Registry: Visit the state Land Registry and ask for a title search. This search will determine if the property is registered and whether the title is clear of encumbrances (such as mortgages or court proceedings).
• Examine the Root of Title: Know how the seller got the property. Make that there is a Certificate of Occupancy (C of O) or a legally binding document.
• Engage a Legal Practitioner: A legal expert in property law can help navigate the complexities of the process and ensure compliance with applicable laws.

Step 2: Obtain the Governor’s Consent

According to the Land Use Act of 1978, all land in Nigeria is vested in the governor of each state, who holds it in trust for the benefit of the people. To transfer land ownership, the governor’s assent is required. The transfer of land ownership is not legally binding unless the governor gives his assent. Section 22 of the Land Use Act states unequivocally that any transfer of land without the governor’s consent is null and invalid.

To obtain the governor’s assent, the buyer and seller must first apply. This application requires the submission of papers such as the Deed of Assignment, Certificate of Occupancy, and proof of payment of applicable fees. Obtaining the governor’s consent usually takes 30-90 days but can vary by state.

Step 3: Execute Deed of Assignment

The Deed of Assignment is the legal document that conveys ownership from the seller to the buyer. It must be drafted by a lawyer and explicitly identify the persons involved, the property being transferred, and the terms of the sale.

Step 4: Pay the Stamp Duties and Registration Fees

The buyer must pay stamp duties once the Deed of Assignment has been executed. Stamp duties are a type of tax levied against documents. This responsibility is essential in Nigeria in order for the Assignment Deed to be legally binding.

Step 5: Registering the Property Transfer

To finalise the transfer, register the new title at the relevant land registry office. This step legally records the change in ownership and protects the rights of the new owner.

Step 6: Conduct the last search.

Before completing the transfer, make a final search at the Land Registry to ensure that the Deed of Assignment is legally registered. This stage verifies the buyer’s legal ownership of the land.

Step 7: Issuance of New Title Deed: Get a new certificate of occupancy (C of O)

Once registered, a new title deed reflecting the buyer’s ownership will be issued. This document serves as proof of ownership for future transactions or legal purposes. In certain cases, the buyer may need to get a new Certificate of Occupancy. This stage is usually required when there has been a big change in ownership, such as the transfer or sale of a large estate.

The required documentation for transferring land ownership in Nigeria?

• Land Purchase Receipt: Request a receipt after purchasing land. It serves as evidence payment. A receipt, on the other hand, may be unnecessary if it is already included in the document conveying the land.

• Contract of Sale of Land: This document allows parties to agree on terms before finalising the transaction and preparing the deed of assignment for land sales.

• Deed of Conveyance or Assignment: A deed of conveyance or assignment is used in sales transactions to permanently transfer land from one buyer to another. This is a registrable instrument.

• Certificate of Occupancy: This is a government-issued document that confirms ownership of land. Anyone who has owned land prior to 1979 is eligible for a Certificate of Occupancy. It is also issued by the state government to allottees of government-owned land. Those who acquire land through sales or mortgages do not require a new certificate of occupancy, but instead require the Governor’s assent. 

• Judgement of Court: A court judgement can transfer ownership of property to another party. It is valuable when the title to a certain property is obtained through litigation.

• Deed of Mortgage: This deed transfers land from the mortgagor (borrower) to the mortgagee (lender). It serves as a temporary transfer in the context that the mortgagor shall be entitled to recover this land if the loan amount is paid with interest.

• Survey Plan: A survey plan depicts the extent and size of one’s territory. It also allows one to determine whether the land is under government acquisition.

• Power Of Attorney: This document is required for property transactions involving individuals who are unable to be present in Nigeria due to distance or other circumstances. This is a document that authorises another person to act on behalf of one of the transaction’s parties. A person who lives outside of Nigeria but wishes to purchase land might grant a power of attorney to an agent to assist him in performing certain property-related activities.

• Deed of Gift: This is a legal document that confirms the transfer of land or property from a Donor to a recipient, Donee. Deed of gift can be used to transfer ownership of land.

• Probate: A grant of probate is a document obtained from a deceased person’s will and inheritance. The instrument vests all the assets included within it into the executors of the estate.

• Letter of Administration: The letter of administration assigns assets to estate administrators. It is granted to the personal representatives of a deceased individual if the deceased died intestate.

• Assent: Assent is issued to vest an interest in a particular estate into the beneficiaries of an estate or third-party buyer by the executors or administrators of an estate. Assent is given by executors or administrators to transfer an estate’s interest to beneficiaries or third-party buyers.

Is it possible to transfer land in Nigeria without the governor’s consent?

No. According to the Land Use Act of 1978, any land transfer made without the governor’s consent is ruled unlawful.

How to prevent real estate fraud during land deals in Nigeria

A buyer must do a thorough title check at the Land Registry, confirm the validity of the seller’s documents, and appoint a knowledgeable legal practitioner to execute the transaction.

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.

Written by Samuel Anwe and Adeola Austin Oyinlade for Adeola Oyinlade & Co.

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

To see our service offerings, please contact us at [email protected] or visit www.adeolaoyinlade.com

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

Introduction

Mergers and acquisitions (M&A) are critical strategies employed by companies to enhance their market position, achieve economies of scale, and diversify their operations. In Nigeria, these transactions have gained traction as businesses seek to navigate a competitive environment and maximize operational efficiencies. Historically, M&A activities have evolved from being predominantly foreign-driven to increasingly involving local entities.

The earliest recorded M&A activity in Nigeria dates back to 1912 with the acquisition of the Anglo African Bank by the British Bank of West Africa, leading to the establishment of First Bank of Nigeria Plc. Notable instances of M&A include the 2005 banking sector consolidation mandated by the Central Bank of Nigeria (CBN), which required banks to increase their capital base significantly. This consolidation aimed to strengthen financial institutions and enhance their capacity to support economic development.

Meaning of Merger and Acquisition

Merger

A merger means any amalgamation of the undertakings or any part of the undertakings or interest of two or more companies or the undertakings or part of the undertakings of one or more companies and one or more bodies corporate. It follows therefore that a merger is a joinder, fusion or bringing together of the businesses, clients, capital, debts and other undertakings of two or more companies. This process often involves the dissolution of the original companies, with their assets and liabilities transferred to the newly created entity. Mergers can occur on equal terms (merger of equals) or involve one company absorbing another.

Acquisition

An acquisition, on the other hand, refers to one company purchasing most or all of another company’s shares or assets, thereby gaining control over that company. Unlike mergers, acquisitions do not necessarily result in the formation of a new entity; instead, the acquired company may continue to operate as a subsidiary or be fully integrated into the acquiring firm.

Legal Framework

The legal framework governing M&A in Nigeria include:

• Companies and Allied Matters Act (CAMA) 2020: This Act outlines the procedures for mergers and requires court approval.
• Federal Competition and Consumer Protection Act (FCCPA) 2018: This Act regulates mergers to prevent anti-competitive practices and establishes the Federal Competition and Consumer Protection Commission (FCCPC) as the primary regulatory authority.
• Investment and Securities Act (ISA) 2007: Previously governed M&A activities but has been largely superseded by the FCCPA.

Regulatory Bodies

• Securities and Exchange Commission (SEC): Oversees public M&A transactions and ensures compliance with capital market regulations. 
• Federal Competition and Consumer Protection Commission (FCCPC): Regulates competition-related aspects of mergers, ensuring they do not substantially lessen competition.
• Corporate Affairs Commission (CAC): Handles company registrations and compliance matters related to mergers.
• Federal Inland Revenue Service (FIRS): Ensures tax compliance regarding capital gains tax during mergers.

Benefits of Mergers and Acquisitions

• Market Consolidation: M&A activities drive market consolidation, leading to stronger and more competitive industries. By merging or acquiring, companies can eliminate competition, increase market share, and enhance their bargaining power within the industry. This consolidation is particularly evident in sectors such as banking and telecommunications, where fewer, larger players dominate the market.
• Access to new technologies and expertise: Foreign investors frequently contribute new technology, knowledge, and global best practices to local firms when they acquire them. This transfer of information may boost operational efficiency and creativity inside Nigerian companies, allowing them to compete more successfully on both local and international levels.
• Increased Foreign Direct Investment (FDI): M&A transactions can boost foreign direct investment in Nigeria, therefore contributing to economic development and diversification. Foreign firms entering the Nigerian market through acquisitions provide capital investment, which can lead to job creation and infrastructural development.
• Risk Diversification: By merging with or acquiring other firms, companies can diversify their portfolios and spread risk across different markets or sectors. This is particularly important in a dynamic economy like Nigeria, where fluctuations in specific industries can pose significant risks.
• Enhanced Financial Performance: Mergers and acquisitions can enhance financial performance by reducing costs and increasing revenue. By merging activities, businesses may decrease redundancies, maximize resources, and obtain economies of scale, eventually increasing profitability.
• Opportunities for Strategic Growth: M&A provides organizations with strategic growth prospects that would be difficult to achieve organically. Firms can swiftly obtain access to new markets, client bases, or product lines through acquisitions, allowing for speedier expansion than constructing from the bottom up.

Types of Mergers

• Horizontal Mergers: A horizontal merger occurs between companies that operate in the same industry and are direct competitors. The primary goal is to increase market share, reduce competition, and achieve economies of scale. Mergers in the banking sector, such as the merger between Access Bank and Diamond Bank, which aimed to consolidate their positions in the financial market is an example of horizontal merger.

• Vertical Mergers: Vertical mergers involve companies at different stages of the production or distribution process within the same industry. These mergers aim to enhance supply chain efficiency, reduce costs, and improve product delivery. For instance, a manufacturer acquiring a supplier or distributor, common in industries such as oil and gas or manufacturing

• Conglomerate Mergers: Conglomerate mergers occur between companies that operate in unrelated industries. The objective is to diversify business operations and reduce risk by entering new markets. For example, companies seeking to expand their portfolios by merging with firms outside their primary business areas

• Concentric Mergers: Concentric mergers involve companies that are related by technology or market but do not directly compete with each other. These mergers aim to leverage complementary resources and capabilities to enhance product offerings. For instance, a technology firm merging with a company that provides complementary services or products.

Types of Acquisitions

• Stock Acquisition: This involves purchasing a controlling interest (typically 51% or more) of another company’s shares. It can be friendly (agreed upon by both parties) or hostile (where the acquiring company seeks to take over without consent).

• Asset Acquisition: In this type, one company acquires the assets of another company rather than its shares. This method allows the acquirer to choose specific assets while leaving behind unwanted liabilities.

Procedures for Mergers

1. Initial Planning and Strategy Development

• Define Objectives: Identify the strategic reasons for the merger, such as market expansion or operational efficiencies.
• Select Target Companies: Research and identify potential merger candidates that align with your business goals.

2. Due Diligence

• Conduct Comprehensive Due Diligence: Assess the financial, legal, and operational aspects of the target company to identify risks and synergies. This includes reviewing financial statements, contracts, and compliance with regulations.

3.  Documents Required

• Merger Plan: A comprehensive document detailing the rationale for the merger, including expected benefits, market analysis, and strategic goals.
• Minutes of Meetings: Minutes from board meetings or shareholders’ meetings where the merger was discussed. These should reflect the decision-making process and any resolutions passed.
• Business Plans: The most recent business plans of both merging parties, outlining their operational strategies and financial forecasts.
• Financial Statements: Audited financial statements for the last two years for both companies to provide a clear picture of their financial health.
• Market Analysis Reports> Reports, surveys, or studies conducted within the last two years assessing market conditions, competitive landscape, and potential for sales growth.
• Legal Documents: Copies of relevant legal documents such as:
• Memorandum and Articles of Association (Memart)
• Certificates of incorporation
• Any agreements related to the merger (e.g., heads of terms, memorandums of understanding).

4. Determine Merger Category

• Classify the Merger: Based on combined annual turnover, determine if the merger is a:
• Small Merger: Below the threshold stipulated by the FCCPC.
• Large Merger: Above the threshold (typically one billion naira).

5. Notify the Federal Competition and Consumer Protection Commission (FCCPC)

• Notification Requirement: For large mergers, submit a merger notification to the FCCPC before implementation. This includes:
• FCCPC Form 1 (Notice of Merger)
• A non-confidential executive summary of the merger.
• Details of the merging parties, including their ownership structures and control.
• The nature of the merger and its strategic rationale.
• Relevant financial documents.
• Information on how the merger will affect competition in the market.
• The annual turnover of the merging entities
• Public companies must also notify the Securities and Exchange Commission (SEC).

• Thresholds for Notification:
• A merger is considered a large merger if the combined annual turnover of the acquiring and target companies exceeds ₦1 billion or if the target’s annual turnover exceeds ₦500 million in the financial year preceding the merger.

6. Public Consultation

• Engage Stakeholders: The FCCPC may publish the proposed merger in the Federal Gazette and invite public comments. This allows stakeholders to express their views on potential competitive impacts.

7. FCCPC Review Process

• Assessment of Competition Impact: The FCCPC reviews the merger to determine if it may substantially prevent or lessen competition.
• Approval or Conditions: The FCCPC can approve the merger with or without conditions or prohibit it based on its findings.

8. Approval Notification

• Issuance of Approval Certificate: If approved, the FCCPC issues a certificate indicating approval, which may include specific conditions.
• Publication of Decision: The decision is published in at least two national newspapers and in the Federal Government Gazette.

9. Implementation of Merger

• Execute Merger Agreement: Upon receiving approval, proceed with executing the merger agreement and integrating operations.
• Compliance with Conditions: Ensure compliance with any conditions imposed by the FCCPC during implementation.

10. Post-Merger Compliance

• File Post-Merger Documents: Within two weeks of completion, submit necessary documents to the FCCPC, including:
• A copy of the court order sanctioning the scheme (if applicable).
• Evidence of compliance with any conditions set forth by the FCCPC.
• Reports on employee arrangements and financial adjustments.

11. Monitoring and Inspection

• Post-Merger Inspection: The FCCPC may conduct inspections within three months after approval to ensure compliance with regulatory requirements and assess how well the new entity is performing.

Procedures for Acquisitions

• Preliminary Assessment
• Conduct a thorough analysis of the target company, including financial health, market position, and potential synergies.
• Identify strategic objectives for the acquisition.

• Engagement of Advisors
• It is important to hire financial advisors, legal counsel, and consultants to assist in due diligence and negotiations.

• Due Diligence
• Perform detailed investigations into the target’s financial records, legal obligations, operational capabilities, and market conditions.
• Assess any potential liabilities or risks involved with the acquisition.

• Valuation
• Determine the fair value of the target company using various valuation methods (e.g., discounted cash flow analysis).

• Negotiation
• Initiate discussions with the target company regarding terms of the acquisition.
• Draft a Letter of Intent (LOI) outlining preliminary terms and conditions.

• Documentation
• Prepare necessary legal documents, including:
• Share Purchase Agreement (SPA)
• Disclosure schedules
• Regulatory filings
• Ensure compliance with relevant laws and regulations.

• Regulatory Approval
• Submit required documents to regulatory bodies such as the Federal Competition and Consumer Protection Commission (FCCPC) for approval.
• Address any concerns raised by regulators during this process.

• Closing the Deal
• Finalize all agreements and complete the transaction.
• Conduct a closing meeting to execute documents and transfer ownership.

• Post-Acquisition Integration
• Implement strategies to integrate operations, cultures, and systems of both companies.
• Monitor performance and address any challenges that arise during integration.

CONCLUSION

Mergers and acquisitions are important to the economy’s proper functioning. They enable firms to gain efficiencies like economies of scale or scope, diversify risk across several activities. They also offer a means for replacing the managers of underperforming companies. 

The Federal Competition and Consumer Protection Act (FCCPA) of 2018 oversees Nigerian merger and acquisition proceedings. The Act mandates that all large mergers must be notified to the FCCPC before implementation. This requirement ensures that potential anti-competitive effects are assessed prior to any merger taking place.

The FCCPC is the primary regulatory body overseeing mergers and acquisitions, replacing the Securities and Exchange Commission (SEC) for this purpose. This shift centralizes regulatory oversight, enhancing efficiency in the review process.

Companies should engage legal and financial advisors early in the M&A process to navigate regulatory complexities effectively and ensure compliance with all requirements under the FCCPA.

By Adeola Oyinlade & Co.

Adeola Oyinlade & Co.; a top corporate and commercial law firm in Nigeria provides help and offers advisory to both local and foreign clients on mergers and acquisitions related matters in Nigeria. 

To see our service offerings, please contact us at [email protected] or visit www.adeolaoyinlade.com

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

Introduction

The mining industry in Nigeria is a significant contributor to the country’s GDP, with various players operating in this space. To engage in any mineral resource activities, companies or individuals must obtain the proper licenses and permits from the government. 

Meaning of Mining License

A mining license is an official document or certificate granted by a government agency that allows a company or individual to engage in mining activities such as extracting, processing, and trading mineral resources.

The mining license specifies the minerals, geographic area, and duration for which the holder is permitted to perform mining operations.

Legal and Regulatory Framework of Mining in Nigeria

The primary legislation regulating mining in Nigeria include the Nigerian Minerals and Mining Act 2007, National Minerals and Metals Policy 2008, and Nigerian Minerals and Mining Regulations 2011.

Other legislations that are important in the regulation of the mineral mining industry include the Nigerian Investment Promotion Commission (NIPC) Act1, the Companies and Allied Matters Act, 2020, the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, and tax laws.

The regulatory bodies are the Ministry of Mines and Steel Development (MMSD) and the Mining Cadastre Office (MCO). Engaging in any mineral resource activities without the proper licenses is considered an offense in Nigeria.

Types of mining licenses

There are various types of mining licenses, such as Exploration License, Mining Lease, Small Scale Mining Lease, Possess or Purchase License, Mineral Buying Center License, and Mineral Export Permit, each with their own set of requirements.

Exploration License

The Exploration License is the first step in the process of obtaining mining rights in Nigeria. It grants the holder the right to explore and assess the viability of mineral deposits within a specified area. It is valid for an initial period and can be renewed based on performance.

Once the exploration phase is successful and the presence of commercially viable mineral deposits is established, the holder of the Exploration License can then apply for an Exclusive Prospecting License (EPL) and eventually a Mining Lease.

The key requirements for obtaining an Exploration License in Nigeria are:

Certified true copy of company certificate and other incorporation documents

• Completed application forms
• Pre-Feasibility Report
• Prospecting plan
• Payment of processing fee
• Evidence of financial capability
• Evidence of technical competence or COMEG accredited geologist
• Irrevocable consent from the landowner(s) and/or occupier(s) to the applicant
• Attestation of non-conviction of criminal offences under the Act by a Lawyer

Mining Lease

A mining lease is awarded for a surface area without a prior exploration license or small-scale mining lease, unless the applicant already has one over the same region. The lease is for a maximum of 50km². The mining lease grants the holder the exclusive right to use and extract minerals within the lease area. The mining lease holder has the right to market, sell, export, and dispose of mineral products produced during mining activities. Mining leases are awarded for 25 years and renewed every 24 years, provided certain conditions are met.

The key requirements for obtaining a Mining Lease in Nigeria:

1. The applicant must be a holder of a valid Exploration License, which allows them to explore and assess the viability of mineral deposits within a stated area.

2. The following documents must be submitted by the applicant:

• Certified true copy of company incorporation documents
• Completed application forms
• Pre-Feasibility Report
• Prospecting plan
• Payment of processing fee
• Evidence of financial capability
• Evidence of technical competence or COMEG accredited geologist
• Irrevocable consent from the landowner(s) and/or occupier(s)
• Attestation of non-conviction of criminal offences under the Act by a Lawyer

3. The applicant must show that a commercial quantity of mineral resources exists in the region for which the lease is requested.

4. The applicant must have met all of the conditions of the Exploration License for the area in question.

5. The applicant must give proof of sufficient operating capital for the proposed mining operations and demonstrate technical competence in carrying out the proposed mining activities.

Small Scale Mining Lease

The small-scale mining lease has a smaller geographic area and is intended for artisanal, alluvial, and other small-scale mining operations. The license is valid for 5 years and can be renewed for up to 5 more years.

The key requirements for obtaining a Small-Scale Mining Lease (SSML) in Nigeria are:

1. The applicant must be a Nigerian citizen or a company incorporated in Nigeria.

2. The proposed mining area must not exceed 3 km2 (15 cadastral units).

3. The applicant must submit the following documents:

• Completed application forms
• Certificate of incorporation and other company documents
• Evidence of technical competence, such as a COMEG accredited geologist
• Evidence of financial capability to carry out the proposed mining operations
• Irrevocable consent from the landowner(s) and/or occupier(s)
• Attestation of non-conviction for criminal offenses under the Act

4. The applicant must demonstrate that the proposed mining operations will be conducted using low-level technology and methods that do not require substantial capital expenditure.

5. The applicant must pay the prescribed application and processing fees.

Possess or Purchase License

The Possess or Purchase License is required for companies seeking to deal in mineral resources. This license enables an entity that does not own or possess a mining lease to operate directly in mineral trading or exporting. The license is valid for one year and can be renewed.

The key requirements for obtaining Possess or Purchase License include:

• Certificate of incorporation and other company documents
• Application letter stating the minerals to be possessed or purchased
• Evidence of a technically competent person like a geologist with COMEG accreditation
• Tax clearance certificate
• Attestation of non-conviction for a criminal offense by a Legal Practitioner
• Banker’s reference letter
• Letter of consent from a mineral title holder
• Payment of the prescribed fees

Mineral Buying Centre License

The Mineral Buying Centre License is specifically authorises the holder to operate a facility for processing, warehousing, and trading of mineral resources. 

The key requirements for obtaining a Mineral Buying Centre License (MBC) in Nigeria are:

1. The applicant must be a company incorporated in Nigeria. Foreign companies must incorporate a local Nigerian subsidiary to be eligible.

2. The applicant must have an established warehouse facility that will be used to process, store, or trade mineral resources. This warehouse facility will be inspected as part of the application process.

3. The applicant must submit similar documents as required for the Possess or Purchase License, including:

• Certificate of incorporation and other company documents
• Application letter stating the minerals to be traded
• Tax clearance certificate
• Attestation of non-conviction for a criminal offense
• Banker’s reference letter
• Letter of consent from a mineral title holder

4. The applicant must demonstrate technical competence, such as having a geologist with COMEG accreditation on staff.

5. The applicant must pay the prescribed application fees for the Mineral Buying Centre License.

Mineral Export Permit

The Mineral Export Permit is issued by the Ministry of Mines and Steel Development and is required each time mineral resources are to be exported out of Nigeria. This permit ensures compliance with export regulations and facilitates the legal exportation of minerals.

The key requirements for obtaining a Mineral Export Permit in Nigeria are:

1. Possess or Purchase License:

• The applicant must already hold a valid Possess or Purchase License, which allows them to deal in the specific mineral resources they want to export.

2. Export Certificate:

• The applicant must obtain an Export Certificate from the Ministry of Mines and Steel Development, which certifies the mineral resources are legally sourced and ready for export.

3. Evidence of Royalty Payment:

• The applicant must provide proof that the required royalties have been paid to the government for the mineral resources being exported.

4. Prescribed Fees:

• The applicant must pay the prescribed fees set by the government for the Mineral Export Permit.

Incentives available for participants in the Nigerian Mining Industry

The incentives provided by the Nigerian government to support the mining industry include:

• Allow for a 75% depreciation or capital allowance on verified true capital expenditure in the first year of investment and 50% in subsequent years.
• There is a 5% investment allowance and the ability to capitalize any prospecting expenses.
• Approved plant, machinery, equipment, and accessories imported for mining activities are exempt from customs and import charges.
•  Approved expatriate personnel of the operation are exempt from expat quotas and residency permits.
• Expatriate personnel have a personal remittance quota and are not subject to any taxation for transferring foreign currency out of Nigeria.
• Tax exemption for the first three years of operation. The minister might extend the period for another two years if the operator meets certain conditions.
• Foreign investors are protected from nationalization and expropriation of their mining titles, unless the acquisition was conducted in the national interest or for public purpose and under a legislation that includes compensation and access to court.

Conclusion

In Nigeria, it is illegal to engage in any mineral resource operations without the required license. It is strongly encouraged to consult with a legal professional to ensure that the application procedure is completed correctly and that all regulatory criteria are met. This is important in order to prevent any legal concerns or penalties for operating without the proper licenses in Nigeria’s mining industry.

By Adeola Oyinlade & Co.

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

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