Experts have called for a reform of the legal frameworks guiding critical sectors of the economy such as oil and gas, mining, solid minerals and power, among others. Vice President Yemi Osinbajo (SAN) was among those who gathered at the 10th Annual Business Law conference of the Nigerian Bar Association Section on Business Law (NBA-SBL) to dissect the economy. JOSEPH JIBUEZE reports.

It lived up to its billing as a forum for regulators, lawyers and business executives to dialogue on policies and regulations that shape economic growth.

From last Wednesday to Friday, legal and business experts gathered for the 10th Annual Business Law Conference of the Nigerian Bar Association Section on Business Law (NBA-SBL) at the Transcorp Hilton, Abuja.

With the theme: Law reform and economic development, it featured 10 sessions with sub-themes on managing the economy, prospects for the oil and gas industry, arbitration, ease of doing business, agriculture, solid minerals, power and infrastructure. Over 80 experts chaired the sessions, moderated or made presentations.

Vice President Yemi Osinbajo (SAN) opened the conference with a keynote speech. Some ministers, including Mrs Kemi Adeosun (Finance), Dr Ibe Kachikwu (State for Petroleum), Chief Audu Ogbeh (Agriculture), Dr Kayode Fayemi (Solid minerals), Babatunde Fashola (SAN) (Power, Works and Housing) and Dr Okechukwu Enelamah (Industry, Trade and Investments), made presentations.

Kaduna State Governor Mallam Nasir el-Rufai, former Power Minister Dr Lanre Babalola, former Attorney-General of the Federation Chief Bayo Ojo (SAN), former NBA president Dr Olisa Agbakoba (SAN), former All Progressives Grand Alliance (APGA) governorship candidate in Abia State Dr Alex Otti also participated in the sessions.

Prof Osinbajo identified areas that need urgent reforms as land titling, pre-investment approvals, litigation and the appeal process. To him, there is a huge problem in land titling, which he thinks can be largely solved by deploying technology to reduce the time line for title processing.

On pre-investment approvals, Osinbajo said it sometimes takes too long to set up a business and to get the necessary approvals. He said while it takes a few hours or days in other countries, it requires several weeks or months in Nigeria, which does not augur well for the economy.

As a way out, the Vice President said there should be timelines  set for every approval sought, while there should be sanctions for any agency which fails to meet such timelines.

According to him, commercial litigation could be especially frustrating, with cases dragging for years in court and killing investors’ confidence.

“Our system is so slow that it has attracted all kinds of negative comments from across the world,” he said. He recalled a statement made  by a foreign jurist to the effect that “court cases in Nigeria have no terminal date”. He believes “decisive” action needs to be taken to solve the problem of delays.

The Vice President said even where arbitration clauses are introduced in contracts, the arbitral processes are sometimes hobbled by litigation, with parties challenging the outcome in court. “Arbitration should completely oust the jurisdiction of the court. The court should not get involved at all,” he said as a way out.

Regarding the appeal process, Osinbajo believes not all cases should terminate at the Supreme Court. “We must be able to terminate interlocutory appeals at the Court of Appeal. And not even all of them should go to the Court of Appeal,” he said.

Osinbajo regretted that Nigeria is rated very low by the World Bank among countries where business can be done easily. As a way of correcting the situation, he said the Federal Government has set up the Ease of Doing Business Council, which will bring together the public and private sectors to explore ways of easing the business process.

Osinbajo said there were already enough laws; the problem was about enforcement. “We have the laws, but we need to enforce those laws and show a bit more commitment to them,” he said.

The Vice President began his speech on a jovial note, saying since he assumed office, he had been receiving a lot of requests for help. He said the requests appeared to increase after he declared his assets and everyone knew how much he was worth.

Osinbajo hinted that he was no longer earning as much as he earned before becoming the Vice-President, adding that the assets he declared was not likely to change much by the time he leaves office.

“What you see is all there is, and it’ll not likely change in the next few years,” he joked.

He urged the elite to join the anti-corruption war, saying: “If we, as the elite, accept certain forms of conduct because it comes from people who we know or are our friends – unethical conduct, corrupt conduct and all of that – then our society is not going to go anywhere.

“There is no society that has been able to make progress where its elite have no consensus on questions of integrity, questions of morals. We don’t have to be saints; we don’t even have to belong to the same religion. But we must accept that there are certain fundamental minimums that must be acceptable in a society that wants to grow.”

Review “unsuitable laws”

Chief Justice of Nigeria (CJN), represented by Justice Sylvester Ngwuta, said there was a nexus between law reform and economic development. According to him, law reform is needed to create a new society, adding that the challenge of “unsuitable laws” must be addressed. “It is important to examine ways to reform our laws,” he said.

NBA president Augustine Alegeh (SAN) regretted that for 14 years, Nigeria had been struggling to pass the Petroleum Industry Bill (PIB). He said if passed, the bill would enhance the country’s economic fortunes. “The most important law we should all commit to passing should be the PIB because our economic development is tied to it,” he said.

SBL chairman Asue Ighodalo said “vital institutions” must be revitalised to put the country on the path of development, including the healthcare system, civil service and a transparent judiciary. He also called for amendment of old laws, saying they need to be taken a hard look at.

“We must collectively examine and re-examine our laws and ensure that they are fit for purpose and consistent with our economic aspirations,” he said.

Conference Planning Committee chairman Dr Babatunde Ajibade (SAN) said Nigeria had long paid lip service to the need to diversify and develop its economy and steer it away from sole reliance on oil revenue.

“We have chosen conference sessions that focus, amongst other things, on the key drivers of the diversification and development of our economy, as highlighted by the current administration. We will be examining whether and in what respects law reform is required to drive this process,” he said.

Solid minerals policy map

Fayemi said a challenge the solid minerals industry is faced with is that Nigeria is not seen by the international community as a mining destination. He said ongoing reforms in the sector would take time to bear fruit as “mining is a long-term sector and requires a lot of investment and results are not immediate.”

He said the government was working to get more banks to set up solid minerals desks and to sustain interest in the non-oil sector. He said a “road map” committee had completed its work on how to grow the sector.

Fayemi said past administration did not show sufficient interest in solid minerals. According to him, such interest waned whenever oil prices rose but was always as “swansong” whenever oil prices were low. He said the government would prosecute illegal miners while registering small-scale miners so as to empower them.

Former Lagos State Attorney-General Olasupo Shasore (SAN) said low domestic and foreign investment leads to low project funding of the solid mineral sector.

According to him, lack of infrastructure, such as access roads, good roads to mining site all hamper the sector’s growth. Legal and policy uncertainty, he said, is also a problem.

“Policy U-turn is sometimes more dangerous than no policy at all,” he said.

He said there was a general recognition of the need for reform. He faulted the central control of the mining industry, saying states and communities should be allowed to get more involved and share royalties from mining.

Shasore said the policy road map needs “a lot more urgency and aggression” to executive it, adding  investors’ confidence should be boosted so that Nigeria “can move from being a mineral country to a mining country.”

‘Why refineries aren’t working’

Dr Kachikwu, who said Nigeria would end fuel importation by 2019, explained that it would require $50 billion to fill the infrastructural gap in the industry.

He said by 2019, Nigeria expects to become a net exporter of refined products, adding that an investment drive is ongoing to meet the infrastructure requirement.

His words: “I have faith that if we put the money where we should and quickly, my eyes are set on 2018 or 2019 and even if I’m not here, somebody’s eyes will  have to be set on that.

“The whole idea is that from 2018, we must have achieved a 60 per cent reduction in importation of petroleum products and in 2019 we must be able to exit importation completely. To do that we have a lot of work to do and a lot of funding to put in place and we’re working hard to achieve this. I have hope. I’m a very strong optimist.”

On why refineries are working at low capacity, he said: “How do  refineries work if the pipelines supplying them are out most of the year and so they can’t supply crude? You can’t refine an empty space.

“How does it work when you don’t do your turnaround maintenance or if when monies budgeted for them are diverted? How does it work if your contracting process is so long that you never meet the turnaround days you’re supposed to? How does it work when you send the wrong set of people with the wrong set of skills to what should have been very important portfolios in the establishment?” he said.

The minister said engagements with militants in the Niger Delta has been successful, resulting in a ceasefire and rise in crude production. He said he visited the creeks and met with the local chiefs with a view to finding a short, medium and long term solution to the crisis.

“The greatest challenge for someone who is initiating policies is how to satisfy all the interest groups. It was why we couldn’t pass the PIB and in trying to get the militants to back out so we can have some peace in the place,” he said.

Kachikwu said after visiting the creeks, he could understand why the militants feel aggrieved.

“One of the reasons why I took time to fly into some of the creek areas wasn’t for publicity. It was to get a firsthand feel of what it is really like there. Once you get into an area where there are no roads, no light, no water, it’s a different mindset. And you need to spend time to understand that mindset.

“In three of the locations that I visited, I could relate with the villagers living with the militants who are next door in the forest and who were respectful enough not to fire guns while I was there.

“What it showed, as my father used to say, is that ‘mad men have rules of engagement.’ It doesn’t matter what you think of militants, they do the things they do because hopefully they have burning passions for the positions they take and we need to understand that kind of psychology.”

How states can survive,

by Adeosun

“Speed up law reforms.” Those were the words of Finance Minister Kemi Adeosun while speaking on the sub-theme: Managing Nigeria’s economy – Is there a need for institutional reforms? She led discussions around issues surrounding economic management, saying there was the need to strengthen the legal framework to support economic management.

The session was chaired by past SBL chairman Gbenga Oyebode. Panelists included former Diamond Bank Managing Director Dr Alex Otti, Managing Director, Project Management, Lafarge Africa Plc Mrs Peju Adebajo, Dr Doyin Salami of the Lagos Business School and Managing Director Bharti Airtel Mr Segun Ogunsanya. Chief Executive Officer of RTC Consulting Mr Opeyemi Agbaje was the moderator.

Adeosun said there were many wastages and excesses in government, adding that states could save more rather than living above their means.  She attributed the excessive waste to loopholes in some of the existing laws governing some agencies, which make them less accountable.

According to her, some revenue generating agencies declare less than what they make.

“It is clear that there is need to review some of these laws that govern the financial sector. Some of those old laws need the support of legal officers to review them. We need to constantly evolve the laws especially those 20 or more years old that are rarely reviewed. If there are no consequences of financial discrepancies, these wastages will continue to grow,” she said.

The minister urged lawyers to contribute to national development for the benefit of themselves and the next generation.

“We have ideas that are not implemented. We should translate our ideas to action,” she said. To her, more lawyers should get involved in politics rather than sitting on the fence. “The professionals cannot sit on the sidelines anymore. You must shape the legal environment that controls government,” she said.

The minister said with dwindling resources due to falling oil prices, states must figure out ways of generating more revenue internally. According to her, the problem with oil revenue is that it made some states lazy and less innovative, leading to some ignoring other sources of income.

“The problem in Nigeria is lack of diversification,” she said, adding that more investment is needed in other sectors.

Adeosun said although Nigeria is not in the same category as oil producing nations such as Saudi Arabia, Kuwait, and others, it had been spending without discipline.

She urged other states to emulate Kebbi which she said is transforming the state’s economy through massive investment in rice production.  “Kebbi’s slogan for IGR is: I Grow Rice. Zamfara is now talking about gold,” she said.

“Nigeria has this unique opportunity, which it’ll probably never get again, to really do some introspection with some honesty, and look at ourselves very, very dispassionately to know where we have gone wrong and to correct it very quickly. There is urgency.

“It’s time for us to think the unthinkable. It’s about the next generation. It’s not really about us. We need to look them in the eye and say Nigeria did the right thing. All the economies that have grown spend 60 per cent of their budget on capital. We can do it too,” she said.

‘Reduce number of law makers’

 Dr Otti believes a fundamental constitutional amendment is needed if money is to be saved so that government could spend more on capital projects. One way to do so, he said, is to reduce the number of National Assembly members. Doing so, he said, will save recurrent cost.

According to him, Nigeria does not need the large number of lawmakers it currently has, adding that it is no longer sustainable in the face of dwindling resources. He said it was regrettable that 70 per cent of Nigeria’s budget goes to recurrent expenditure.

Otti said it was even higher last year at 86 per cent during which only 14 per cent went to capital projects and worse the previous year.

He said: “The problem comes from the constitution we copied and implemented in 1999. We copied from the United States. If we must copy, copy well, do photocopy.”

Otti does not believe each state must produce three senators; one for each state is enough, he said. He also called for regional government rather than the 36-state structure.

“Do we need 109 senators and 360 House of Representatives members? Can’t we have one Senator per state? Do we need 36 states, most of which are not viable yet some governors are still flying private jets? Do we need 774 local government areas?” he asked.

Otti recommended regional economy for Nigeria rather than the 36-state structure that he said is no longer sustainable. He urged the government to address the difficulties in doing business, saying it must build infrastructure to end multiple taxation.

Otti urged lawyers to join politics, saying: “Politics is difficult but not that bad. By the time a lot of you show interest, some of those who populate the place will leave.”

Professor of law Gabriel Olawoyin (SAN), who chaired the third session with the theme: Vehicles for doing business – is CAMA fit for a modern growing economy?, believes the Corporate and Allied Matters Act (CAMA) needs a comprehensive amendment.

“What we need is a fresh legislation. Mere amendment will not address the issues raised,” he said. The session speaker, Dr Gbolahan Elias (SAN) said CAMA is 26 years old, adding that several of its sections need reform.

Way forward for power sector

Fashola blamed the poor state of infrastructure in Nigeria on the bad choices the country made in the past, which manifested in the form of meagre budgetary allocations to the critical sectors of Power, Works and Housing by past administrations as well as non-release of funds even after budgets were passed, while officials were stashing away money.

“We’ve been through a decade of daily production and sale of crude oil at $100 per barrel and all of us know some of the things that happened during that period. But what has changed? What has changed is that with a budget benchmark of $38 per barrel, this administration has budgeted more than N4 trillion; we have budgeted N6 trillion,” he said.

Fashola drew a comparison between past budgetary allocations and this year’s in order to highlight that things were changing for good.

“This year the Ministry of Power has N66 billion to spend to complete its transmission projects. In Works, for roads and infrastructure we now have N244 billion, and in Housing, we have N35 billion in the 2016 budget. So for those three ministries we have N345 billion to spend,” he said.

“So instead of N66 billion this year, Power had only N5 billion to spend in the 2015 budget for the whole of Nigeria. We know how much has been found in banks and under all sorts of places. That is why we don’t have infrastructure. It’s very simple, we just made poor choices. Works had N18 billion for all of Nigeria’s roads and bridges last year, whereas money was being hidden here and there. Those are the poor choices that we made.

“And of course for Housing, we had N1.8 billion to build houses for the whole of Nigeria. That gives a total of about N34 billion compared to about N345 billion that this administration is willing to commit,” he added.

The minister said his meetings with contractors in Works and Housing preparatory for implementation of the 2016 budget revealed that they had not been paid for two to three years in spite of the budget, adding that what happened then was that after the budgets were made, cash was not released.

He added that all that was changing as currently, contractors were being paid and they were returning to site, and even where they had not been paid, they were going back to work on the integrity of the Buhari administration knowing that they would be paid.

He also reeled out some of the projects being embarked upon by his ministry, saying all these would serve to reflate the economy and make it vibrant once again.

Dr Babalola blamed the power sector’s problems on persistent “inadequacies” rooted in market and government failures. He said for years, insufficient capacities persisted, as well as supply and networks constraints, high system losses, poor energy accounting, adding that there was no proper framework for capacity development.

He identified critical issues for further consideration, including the need for access and rural electrification, diversification, the need to revisit industry architecture: transmission and distribution, as well as capacity planning and expansion. He called for more investment and alternative funding.

He urged the government to review the Electric Power Sector Reform Act, enforce market rules and contracts, mitigate risks, account for energy, implement cost reflective tariffs, review imbalanced tariff structure, among others.

The conference also featured social events such as an opening dinner, tea breaks and lunches, “African night” party at Jabi Lake on Thursday, and a closing party on Friday featuring contemporary artiste Olamide.

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