HIGHLIGHT OF THE NIGERIA START-UP ACT, 2022

HIGHLIGHT OF THE NIGERIA START-UP ACT, 2022

*Samuel Ngwu, CIPP/E

INTRODUCTION:

On Thursday 19th of October, 2022, President Muhammadu Buhari signed the Nigeria Startup Bill into law, thus bringing Nigeria in the list of African countries with Startup laws. The Nigerian Startup Act, 2022 (the Act) defines the nature of startups in Nigeria, their scope, operations, incentives and limitations to attract foreign investors and open up the tech market in Nigeria. The Act defines Startup as “a company in existence for not more than ten (10) years, with its objectives being the creation, innovation, production, development or adoption of a unique digital technology innovative product, service or process.” It seeks to provide a legal and institutional framework for the development of startups in Nigeria; provide an enabling environment for the establishment, development, and operation of startups in Nigeria; provide for the development and growth of technology-related talents; and position Nigeria’s startup ecosystem as the leading digital technology center in Africa. This article highlights the salient provisions of the Act and how it affects stakeholders operating in the startup space.

APPLICATION OF THE ACT:

The Act applies to all companies incorporated under the Companies and Allied Matters Act, 2020 and granted the startup label and organizations and establishments, whose activities affect the creation, support, and incubation of labelled startups in Nigeria. It does not apply to an organization which is a holding company or subsidiary of an existing company which is not registered as a startup.

STARTUP LABEL:

The Act creates a certificate mechanism known as Startup Label. The certificate is issued by the Startup Secretariat to eligible Startups to confirm their status as labelled Startup. Startups designated as labelled Startups are entitled to all the incentives provided under the Act. For a Startup to be eligible for certification, it must do the following:

  1. be registered in Nigeria as a limited liability company
  2. existed for not more than 10 years;
  3. business objects are to carry out innovation, development, production, improvement and commercialization of digital technology, innovative products or processes;
  4. it is a holder or repository of digital technology or author of registered software;
  5. it has at least one-third local shareholding held by one or more Nigerians as founder or Co-founder of the startup;
  6. in the case of sole proprietorship or partnership, it satisfies the conditions set out in paragraphs (b) (c) and (d).

An application for a Startup label shall be submitted on the Startup portal in the prescribed form supported by documents prescribed by the Secretariat. Once approved, the applicant’s name and particular will be entered in the register of Startups kept for that purpose and thereafter issued a Startup label. The Startup label shall be conclusive evidence that the Startup has complied with all the requirements for labelling. A Startup label shall be valid for a period of 10 years from the date of issuance.

ONE-STOP SHOP STARTUP PORTAL

The Act establishes a Startup and Engagement portal through which Startups conduct registrations and collaboration with Ministries, Departments and Agencies (MDAs). The Act further enjoins the Secretariat to collaborate with Corporate Affairs Commission, Nigeria Copyright Commission, Trademarks, Patent and Design Registries, National Office for Technology Acquisition and Promotion, Central Bank of Nigeria, Security and Exchange Commission to designate separate sections on the Portal to ease the processes for labelled Startups that conduct transactions at the Commissions. The Act mandates the Secretariat with the approval of the Council to set up Startup Consultative Forum on the Startup Portal to provide information concerning qualified labelled Startup, relevant incentives, local capabilities, the nomination of representatives to the Council, deliberations on a memorandum to be sent to Council for consideration and other policy proposals.

STARTUP INVESTMENT SEED FUND

The Act establishes Startup investment seed Fund to be managed by the Nigeria Sovereign Investment Authority (the Fund Manager) for the benefit of Startups. A sum of N10,000,000,000 (Ten Billion) shall be paid into the account from sources to be approved by the Council. In essence, the fund will be applied to provide labelled Startups with finance and provide relief to technology laboratories, accelerators, incubators and hubs.

TAX AND FISCAL INCENTIVES

The Act provides for several tax incentives for labelled Startups such as:

  • pioneer status incentives;
  • fiscal incentives;
  • tax relief for total period of 5years;
  • exemption from contributions to the Industrial Training Fund;
  • import incentives and access to export facilities;
  • access to government grants, loans and facilities.

The Act further granted tax credits up to 30% to investors investing in labelled startups. Capital gains tax exemption from the disposal of assets by investors provided such assets have been held in Nigeria for a minimum of 24 months.

CREDIT GUARANTEE SCHEME

The Act empowers the Secretariat to establish a Credit Guarantee Scheme for the development and growth of a labelled startup; provision of accessible financial support to a labelled startup; creation of a framework for credit guarantee for a labelled startup; provisions of financial and credit information to startups and provision of financial management capacity building programmes to startups. Where the Scheme is established, the Secretariat shall ensure that there is a strategy and operational goals which align with the objectives under the subsection 2; criteria for eligibility and qualification for receipts of funding under the Scheme; criteria for the monitoring and evaluation of projects undertaken under the Scheme and the efficiency of the operations of the Scheme; mechanism for transparency, accountability and reporting on the activities of the Scheme and chattels, registered intellectual property, assignment of shares or any other instrument identified in the collateral registry as sufficient collateral.

ESTABLISHMENT OF THE COUNCIL

The Act creates the National Council for Digital Innovation and Entrepreneurship (the Council) to regulate and support the operations of Labelled Startups. The Council is composed of the following:

  • the President,
  • the Vice President,
  • the Ministers of Communication and Digital Economy,
  • Minister responsible Finance, Budget and National Planning,
  • Minister responsible for Industry, Trade and Investment,
  • Minister responsible for Science, Technology and Innovation,
  • Governor of the Central Bank of Nigeria,
  • Four Representatives of the Startup Consultative Forum.
  • One member to Represent the Nigeria Computer Society,
  • One member to Represent the Computer Professionals and
  • Director-General of the National Information Technology Development Agency.

The establishment of the Council is important because it has mandates amongst others to do the following:

  • formulate and provide general policy guidelines for the realization of the objectives of the Act;
  • Give overall directions for the harmonization of the laws and regulations that affect a startup;
  • Approve the programmes of the Secretariat established under the Act;
  • Ensure the monitoring and evaluation of the regulatory framework to encourage the development of startups in Nigeria; and
  • Support digital technological development through grants to persons, research institutions and universities pursuing postgraduate programmes in the areas of science, technology and innovation.

The National Information Technology Development Agency (NITDA) shall serve as the Secretariat of the Council and therefore manage the process of labelling a Startup, establish online platforms for easy access to information, maintain a directory of Startups, incubators and accelerators, implement National Digital Innovation, Entrepreneurship and Startup Policy (NDIESP) of the Secretariat for the development of the Startup ecosystem, advise the Council on issues affecting Startups and digital technology innovation entrepreneurship in Nigeria and matters connected to the implementation of the Act amongst others.

INCUBATION PROGRAMMES/REGULATORY SANDBOX

The Act empowers the Secretariat to establish incubator and accelerator programmes for Startups. The incubation programme is expected to aid Startups to tackle problems they encounter while running their businesses. The Secretariat shall develop standards and guidelines to regulate the relationships between accelerators, incubators and Startups; encourage and collaborate with existing accelerator and incubator programmes established by private organizations and provide information on the Startup portal of existing accelerator and incubator programmes and the process of registration and admission into the program. A labelled Startup wanting to participate in the CBN regulatory sandbox, SEC’s incubation programme or any other shall apply through a fast-track process available in the Startup portal.

TRAINING, CAPACITY BUILDING AND TALENT DEVELOPMENT

The Act mandates the Secretariat to design and implement a capacity-building programme for Startups, and collaborate with the National Universities Commission and Polytechnics to develop modules, programs and workshops aimed at impacting knowledge necessary for the establishment and running of Startups in Nigeria. It further empowered the Secretariat to establish centres for the acquisition of digital technology in the six geopolitical zones of Nigeria and to issue a time-to-time framework for the development of talent and collaborate with relevant stakeholders to establish digital technology innovation parks and hubs in universities and polytechnics. The Secretariat shall support activities of academic research institutions towards the development of Startups by providing financial support amongst others.

INCENTIVES FOR ACCELERATORS AND INCUBATORS

Accelerators and Incubators that provide goods, services or finance crucial in supporting the operation and growth of Startups in Nigeria shall be registered with the Secretariat and thus entitled to some incentives as such grants and aids for research, development, training and expansion projects, grants given under Nigeria Digital Innovation, Entrepreneurship and Startup Policy and such other incentives as may be granted by the Federal Government.

ESTABLISHMENT OF INNOVATION, CLUSTERS, HUBS AND PARKS

The Act mandates the Council to create a framework for the establishment of Startup innovation, clusters, hubs, and physical and virtual innovation parks in each state of the federation. The roles of the innovation clusters, hubs and parks include fostering collaboration and generating business between Startups and large companies, collating expertise, ideas and perspectives, promoting collaboration amongst Startups and providing Startups with access to resources and professional services. It will further aid Startups in registration and application for authorization and expansion into foreign markets.

ESTABLISHMENT OF TECHNOLOGY DEVELOPMENT ZONES

Under the Act the Secretariat is to collaborate with the Nigeria Export Processing Zones Authority to establish a Technology Development Zone (the Zones) in Nigeria to fast-track Startups, accelerators and incubators’ growth and development. The Zones shall grant a license to a Startup, accelerator and incubator before the commencement of an approved activity and shall therefore be entitled to existing incentives provided under the Nigeria Export Processing Zones Act.

PROTECTION OF PERSONAL DATA

The Act provides for the protection of personal data by mandating Startups to ensure compliance with the extant data protection laws in Nigeria in giving effect to the provisions of the Act and in their day-to-day activities.

CONCLUSION

The framers of the Nigerian Startup Act, 2022 have ensured that there are adequate provisions which, if implemented, will ensure the realization of the objectives which are clearly stated therein. Thus, there is a likelihood that the Act will attract investors into the Nigerian Startups space and thereby accelerate the ecosystem’s growth. It is to be noted, however, that it is one thing to have a good law and an entirely different thing to enforce or implement the law, especially in a developing country such as Nigeria. It is hoped, therefore, that the Federal Government of Nigeria and other stakeholders will take the necessary steps to ensure the full implementation of the provisions of the Act and thereby bring about a phenomenal growth in digital technology which will have a positive impact on the country’s economy.

*Samuel Ngwu is an Executive Associate at Alliance Law Firm, Lagos.

Alliance Law Firm wins Media and Entertainment Team of the Year at The 2022 Esquire Legal Awards

We are glad to announce that Alliance Law Firm won the Media and Entertainment Team of the Year at the 2022 My ESQ Legal Awards. The firm also made the final shortlist in the following categories:

1. Banking and finance
2. Capital Market
3. Dispute Resolution and
4. Insolvency

The recognition accorded to the firm and our staff is simply a testament to our dedication towards excellence in the service of our clients and the overall public course. We appreciate the clients who have partnered with us over the years, while we are also excited over the promise of limitless possibilities that abound in the coming future.

Below is an image gallery highlighting the event in pictures:

From left to right – Samuel Ngwu, Albert .A. Adu, Joshua Akhator, Sir Isaac Uche Obi, Blessing Ajunwo-Choko, ESQ representative & Rita Jude

From left to right – Joshua Akhator, Sir Isaac Uche Obi, Blessing Ajunwo-Choko,  ESQ representative  Rita Jude

Tax Alert – FIRS Issues Information Circular on the Administration of the National Agency for Science and Engineering Infrastructure Levy

Alliance Law Firm Tax Practice team is pleased to have published a Tax Alert on the Information Circular issued by the Federal Inland Revenue Service on the Administration of the National Agency for Science and Engineering Infrastructure Levy.

The publication discusses the procedure prescribed by the FIRS for the collection and administration of the National Agency for Science and Engineering Infrastructure Levy (“the Levy”).

The publication is available to read at https://bit.ly/3AgTwoD

The Crypto Controversy is Far from Over

A trail of circulars from Central Bank of Nigeria and Nigeria’s Securities and Exchange Commission has thrown the tech industry in a panic. According to the first circular issued on 5th February, 2021, Nigeria joins the growing list of countries restricting or ‘banning’ financial institutions from enabling cryptocurrency transactions. A few others in that list are China, Canada, Egypt and the United Kingdom. Before its directive premised on the risks of money laundering, financing for terrorism, illicit inflow and the speculative…

A trail of circulars from Central Bank of Nigeria and Nigeria’s Securities and Exchange Commission has thrown the tech industry in a panic. According to the first circular issued on 5th February, 2021, Nigeria joins the growing list of countries restricting or ‘banning’ financial institutions from enabling cryptocurrency transactions. A few others in that list are China, Canada, Egypt and the United Kingdom. Before its directive premised on the risks of money laundering, financing for terrorism, illicit inflow and the speculative and anonymous nature of cryptocurrencies, the CBN had cautioned investors against trading in cryptocurrency, citing the largely deregulated crypto market in Nigeria. The CBN has maintained that virtual coins such as Bitcoin, Ripple, Monero, Litecoin, and Dogecoin are not legal tender in Nigeria, and financial institutions enabling transactions in such coins do so at their own risk.

 

The CBN has sought to justify its latest directive by bringing up the example set in China, where even cryptocurrency exchanges are closed based on the government’s rationale that cryptocurrencies lack legal status that can make them equivalent to fiat, and are not issued by any recognized monetary institution. Unnamed insiders have suggested that the CBN received a tip-off from the United States Federal Bureau of Investigation (FBI), to the effect that fraudsters were taking advantage of cryptocurrencies to illegally transfer millions of dollars from the U.S. to Nigeria.

 

While cryptocurrency transactions are anonymous, and the real-world identities of those who engage in them will likely remain secret, the anonymity of crypto trading is based on digital signatures that serve as a series of virtual identities that can be traced to the parties involved, if not to a particular person. With the rise of chain analysis, which shows the location of a person entering a bitcoin transaction, talk of the dangers of extreme anonymity in bitcoin transactions will soon be unfounded. It is true that cryptocurrencies have criminal utility. However, the volume of illegal transactions enabled by crypto are a tiny fraction of global crypto transactions, and for commission of crime, cash has proven to be of greater value. For example, research shows fiat is used for money laundering eight–hundred times more than cryptocurrencies.

 

As has been noted elsewhere, the CBN’s circular should not be interpreted as an outright ban of cryptocurrency. It is more an administrative instruction or a general statement of policy disseminated in the exercise of the CBN’s supervisory powers over the conduct of banks in the country–by itself the circular has no force of law. Although the legislature has not criminalized owning or trading in cryptocurrency, and the CBN has no more power to ban cryptocurrencies than it does the power to ban the U.S dollar, euro, or cedi, it is all but certain that banks will comply with the circular and avoid calling into question the CBN’s role as their apex regulator. In the wake of the circular, bank notifications for account holders who trade in cryptocurrencies have circulated online, with a format more or less like this: “We recently reviewed your account ***3647 and observed transactions herein are linked to cryptocurrency trading. Due to the unregulated nature of cryptocurrency trading and the directive from the CBN, we are unable to serve as your organization’s financial partner going forward. We have proceeded on the closure of your account and a draft will be issued to you for the sum in your account.” One may argue that such total and immediate compliance from the banks, in the absence of a substantive prohibition, runs counter to established legal precepts including: “What the law has not criminalized cannot be criminalized by any other institution including the Court.” and “A circular can be neither law nor regulation but merely information to the public.”

 

Against this background, there is a need to understand the nature of cryptocurrency and why it spurs so much controversy. The fiat we’ve always known is backed by real assets or tangible securities, while cryptocurrencies operate on blockchain, a technology that manages and records transactions. Mining is the power-intensive process of producing a cryptocurrency. For bitcoin, a complicated cryptographic math problem is presented to specialist miners, who compete to solve it—the first to solve the problem is rewarded a block of bitcoins and any transaction fees that may have been accumulated. This miner must share his results with other miners, who then verify that the work is complete. Once verification happens, the winner can add the new block to the existing chain. The price of the cryptocurrency will be closely tied to the marginal cost of its production. The value then given to the cryptocurrency will depend on community involvement—more users will result in relative scarcity and higher price. Like real currencies, cryptocurrencies generate no cash flow; holders can only profit by selling them at a higher price. Unlike fiat, cryptos are extremely volatile and—in most parts of the world—have no regulator. Coinbase has estimated the total value of all cryptocurrencies to be just over $897.3bn, with bitcoin accounting for 69% of this value. Any cryptocurrency that is not bitcoin falls under the term ‘altcoin’.

 

Apart from the use of cryptocurrency as a hedge against naira devaluation and inflation, more Nigerians are converting their fiat to cryptocurrency for these reasons: virtual coins are not easily confiscated. Cryptocurrency is beyond government control, interference or manipulation. It is hard to censor the administration of cryptocurrencies; and access to it cannot be fully blocked. Again, there are very few barriers to transferring a cryptocurrency: all you need is a smart phone or computer, and internet connection. Most cryptos are also cheap and can be bought in fractions, for as low as N2,000. The best part is that interest in cryptocurrencies among people, businesses, and countries has just begun, and will not peak for a very long time; the number of bitcoin wallets reached 55 million in February 2021. As the supply of bitcoin is limited, renewed interest causes its price to skyrocket, and even at its highest, many believe that it can only go up. As a long-term investment, the right sort of cryptocurrency will yield uncommon returns. Finally, in politically unstable countries, distrust of banks and fears that the banks will be powerless if the government decides to appropriate monies in accounts, have fueled the migration to virtual coins.

 

While nervously debating CBN’s circular, pundits looked to the Securities and Exchange Commission for comments. This is because in September 2020 the commission had made a statement that any person (individual or corporate) whose activities involve an aspect of block-chain related and virtual digital asset services, must be registered by the SEC, and all initial coin offerings within Nigeria, or by Nigerian issuers, or targeted at Nigerian investors, shall be subject to the regulation of the commission. Despite its submission that cryptocurrencies have features of investments and securities as defined in the Investment and Securities Act and therefore fall within its regulatory ambit unless proven otherwise, the SEC on Friday 12th February issued a press release on the CBN’s purported restriction, stating that the restriction did not in any way contradict the SEC’s earlier statement, and that while the SEC still has regulatory powers over crypto, the CBN may, in the interest of financial stability and to avoid systemic risk, suspend certain activities being regulated by the SEC. The SEC affirmed its commitment to innovation, ethical practices, and a fair and efficient securities market that entailed investor protection, which it claimed could be threatened if the CBN did not take action against cryptocurrency trading and its inherent risks.

 

The SEC’s earlier statement showed an impressive grasp of cryptocurrency and why virtual coins should be regulated rather than banned. Would it have been asking too much for the CBN to take a cue from that statement, or for the SEC to guide the CBN through the latter’s misconceptions about cryptocurrency, or even for the SEC to stand its ground in spite of the CBN’s restriction? By its press release tailored to avoid conflict and not ruffle feathers, the SEC has reneged on the promise implicit in its earlier recognition of cryptocurrency—that innovators can start to build on, and buyers start to invest in, the market for cryptos in Nigeria. What should be the fortune of innovators who built tech solutions in a disabling environment (sometimes from scratch), received funding, or made investments based on the SEC’s statement on cryptocurrency, which at the time must have seemed a sign that the CBN will come around? It is worth noting that in October 2020 the National Information Technology Development Agency (NITDA) issued a draft National Blockchain Adoption Strategy aimed at “fostering an efficient, safe and economically viable Nigeria using the blockchain technology”. Not too long ago, at a Banker’s Committee Meeting, the Nigerian vice president questioned the wisdom in CBN’s crackdown on cryptocurrency, and argued that regulation was the far better option. In his words, the country’s regulators had to embrace emerging and disruptive technologies, which make room for efficiency and progress. This level of contradiction from the seat of power, and mixed signals from regulators of the capital market and money market, reflects the dilemma that cryptocurrency presents as a tradeable asset, but also sends a clear message to potential investors: keep off!

 

While Kenya figures out how bitcoin can shield it against foreign exchange losses and lower national debt, and Tunisia prepares to issue its first digital currency, both the Central Bank of Nigeria and the Securities and Exchange Commission are resigned to monitoring the risks of cryptocurrency as identified by the CBN, and will be working on mitigants in the unlikely event that virtual coins are reintroduced as tradeable means of exchange, units of account, or stores of value.

 

Even as they hope that the CBN will clarify or retract its directive, some institutional and individual traders caught up by the restriction have begun to look outside, to jurisdictions that encourage crypto trading. Prominent exchanges like Trove and Luno have asked customers to pause deposits to their accounts pending clarification from the CBN. There is little doubt that the volume of cryptocurrency transactions will fall, which should be a cause for alarm given the stellar run Nigeria had in cryptocurrency last year, while other sectors of the economy were flailing. Nigeria reported the world’s second–largest bitcoin trading volume and ranked 8th in the list of countries with the highest adoption of cryptocurrency.

 

With the clampdown on cryptocurrency exchanges that used to perform Know Your Customer (KYC) Processes on buyers–i.e. verifying the identities of potential buyers–an unofficial and unmanned exchange in the form of peer-to-peer cryptocurrency transactions (P2P) will spread (P2P already had a bigger fraction of the cryptocurrency market than centralized exchanges), granting everyday Nigerians access to cryptocurrencies, for good or for bad. We can expect a rise in startups that fill the need for customer due diligence and provide platforms where verified users can sell cryptocurrencies to one another.

 

Elsewhere, the ease and speed of innovations for virtual coins make it probable that the Central Bank of Nigeria, and other prohibitory regimes, wage a futile war against cryptocurrency. In February Visa announced the launch of an application for its customers to buy and sell digital assets such as bitcoin worldwide, by keying into infrastructure built by Visa’s partner, Anchorage (a digital asset bank). Pointing to increased purchases of crypto assets via debit card during the bitcoin surge, Mastercard also announced that select cryptocurrencies will be supported on its network, and added that it will be engaging central banks around the world as they review plans to launch their digital currencies called Central Bank Digital Currencies. These announcements came shortly after PayPal decided to offer the option of crypto payments to its 26 million merchants, Tesla purchased bitcoin worth $1.5bn from its cash reserve, and J.P. Morgan created its own digital coins for payments.

 

Nigeria cannot afford to be left behind. We envisage the CBN easing up its restriction on the banks and enacting a policy for exchanges that ensures consumer protection, including privacy and security of consumers’ information; and instils strict compliance protocols for the exchanges to follow. Cryptocurrency exchanges seeking to be licensed will be made to meet a minimum capital base. Depending on the capital requirements, exchanges will be forced to merge into recognizable units.

Breach of Promise of Marriage: A Legal Perspective

Everyday, people fall in love, fall out of love, get married, do the impossible in the name of love, hearts are broken, tears flow freely, parties propose openly, jilted individuals commit suicide among other occurrences. It is inherent in human nature to desire to love and be loved. Often, such love interests result in marriages…

“The love that once bound these two people and got frosted. Can be likened to verse xxxv of Shakespeare “Sonnets a sort of Lamentation”. And also verse 1 of “Passionate Pilgrim” Thus we have in this case” so much love.  And then so much pain”. It is the way of the World.”

PATS – ACHOLONU, JSC

 

 

INTRODUCTION

Ifeoma (real name withheld), a fair skinned pretty lady who worked as a cook at a busy canteen in a Lagos suburb fell in love with Bobo (real name withheld), a brilliant indigent undergraduate. As their relationship blossomed, Bobo proposed marriage to Ifeoma. However, due to their meagre resources, they decided to hold on in order to enable Bobo to finish his university education and get a job before settling down in marriage. A considerable part of Ifeoma’s meagre monthly salary was invested in Bobo’s education. She had to make do with whatever remained and tips which she sometimes received from customers, which were hardly enough. We all knew her with two sets of cloths that were used interchangeably; a faded Ankara gown and an over worn mismatched skirt and blouse. She sacrificed all and did it with unreserved joy with the hope that one day, her fiancé would graduate from the university, get a good paying job, settle down in marriage with her and all her sufferings would become a thing of the past. Her sonorous voice could be heard miles away from the canteen ringing with the melody “Our Love is here to stay”, a love song by Billie Holiday, most times and this helped her to navigate each day without the thought of the present pain. Bobo finished from the University with a very good grade and immediately after the Youths Service, he got a very lucrative job with an oil servicing company in Lagos. He came to the canteen after securing the good job spotted in his new “Lamborghini Veneno Roadster” sportscar. That same day, he asked Ifeoma’s boss to give free lunch to all customers and it was a happy day. We were all happy for Ifeoma that her sacrifice paid off at last, or so we thought, only to hear few days later that Ifeoma committed suicide leaving behind a suicide note. To say people were shocked was an understatement as no one saw it coming! It was after reading the suicide note that we all got to know that Bobo got married to a lady he served with during his Youths Service and he only came to the canteen that day to say “bye bye” to Ifeoma as he found her too low for his newly acquired status. Ifeoma was buried the same day amidst bitter tears and rain of curses on Bobo and his entire generation.

 

Akeem was a carpenter, who managed to get his Primary Six Leaving Certificate. He was not so brilliant, as a result of which he learnt the art of carpentry at a very early age and became a successful furniture maker for most people, both home and abroad. He fell in love with Ronke, a fair skinned Yoruba lady in the vicinity who was very brilliant but had to resort to  hawking  bread since she could not afford school fees to further her studies. She already passed her WAEC with flying colours but had totally given up hope of furthering her studies till she met Akeem. Akeem vowed to sponsor her education to the utmost of her ability  with the agreement that both of them would settle down in wedlock immediately after obtaining her university degree. True to his words, he sent Ronke to a university in the UK and was responsible for all expenses including feeding and clothing. In fact, from the pictures seen on social media Ronke lived like a queen while in UK. Not only did Akeem give Ronke full support, he also provided for her impoverished parents back in Nigeria and, based on Yoruba custom, took them as his “ana” already. Little did he know that Ronke in collaboration with her parents had other plans. As a result of Akeem’s full involvement in Ronke’s schooling, he knew that the School’s graduation was fixed for late November of her year of graduation, so he had already fixed their engagement for the first week in December of the same year, believing that Ronke would be back by then. However, he got the shock of his life when Ronke sent a message to him that she would not be coming to Nigeria immediately after her graduation as she was already engaged to a Caucasian  and that she was even in her early stages of pregnancy. Thinking it was a practical joke, he ran to his “ana” only for Ronke’s father to unleash the rude awakening  that he was a fool to have believed that his daughter, with all her education would stoop so low as to marry a stark illiterate like him. Akeem is presently in Police custody standing trial for the murder of Ronke’s father, whose life he snuffed out the day after he received the shocking revelation. He had been consumed by uncontrollable pain and anger and this led him to strangling Ronke’s father to death.

 

The two stories above are just a few examples of the experiences that some would-be couples go through.  Everyday, people fall in love, fall out of love, get married, do the impossible in the name of love, hearts are broken, tears flow freely, parties propose openly, jilted individuals commit suicide among other occurrences. It is inherent in human nature to desire to love and be loved. Often, such love interests result in marriages. Consequently, it is not far-fetched to suggest that the longing to be in a loving relationship and to not be alone, whether within the framework of a marriage or otherwise, has become a permanent fixture of human existence, especially in Africa.  Studies have shown that many couples feel empty, unaccomplished and unfulfilled until united with each other  in matrimony.  Society itself is not left out of the frenzy  for “lovey-dovey” relationships as it encourages the union of a man and a woman, and singleness is often accorded a negative connotation , especially when approaching a certain age. All these factors probably explain why many people rush into relationships, make  promises of marriage, only for one of the parties to pull out at the eleventh hour for one reason or the other, which may be either be genuine or borne out of selfishness.

A love relationship with marriage in view, comes with lots of investment in terms of emotions, passion, time and resources. It is for these reasons that it becomes extremely painful or impossible to let go when separation is consensual, especially by a party who seemed to have invested more. This paper focuses strictly on the “breach of promise to marry” which shall be considered within the context of Nigeria.

The concept of breach of a promise to marry may be evaluated under the following headings:

  • Marriage as a form of contract
  • Laws governing Marriage in Nigeria
  • Breach of promise to marry
  • Remedies for breach of promise to marry
  • Defenses to breach of promise to marry

 

 

  1. MARRIAGE AS FORM OF CONTRACT

marriage is defined as “a legal Union of one man and one woman as husband and wife. Marriage as distinguished from the agreement to marry and from the act of becoming married is the legal status, condition or relation of one man and woman united in law for life, or until divorced, for the discharge to each other and the community of the duties legally incumbent on those whose association is founded on the distinction of sex. A contract, according to the form prescribed by law, by which a man and a woman capable of entering into such contract, mutually engage with each other to live their whole lives (or until divorced) together in a state of union which ought to exist between a husband and wife.”

In Amobi v. Nzegwu[3], the Supreme Court per Ariwoola, JSC defined marriage thus: “Marriage under the Marriage Act generally means the legal union of a couple as spouses.  In other words, it is “the voluntary union for life of one man and one woman to the exclusion of all others.”

In the definition above,  a key feature that stands out is that marriage is a contract. Black’s Law Dictionary[4] defines contract, inter alia, as “1. An agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law…2. The Writing that sets forth such an agreement…3. A promise or set of promises by a party to a transaction, enforceable or otherwise recognizable at law”. It is a voluntary agreement between parties and willingly entered into. However, the freedom enjoyed by parties to contract carries with it the inevitable implication of sanctity of their contracts. Just like any other contract, marriage has its elements.

 

A careful consideration of the definition of contract stated above will reveal that a contract is a promise. What then is a promise? As defined in Black’s Law Dictionary,[5]  a promise is “the manifestation of an intention to act or refrain from acting in a specified manner conveyed in such a way that another is justified  in understanding that a commitment has been made; a person’s assurance that a person will or will not do something.” The Supreme Court per Onu, JSC in Agoma v. Guiness (Nig) Ltd[6] adopted the definition of promise in Osborn: The Concise Law Dictionary, Fifth Edition (1964) where it was defined as “The expression of an intention to do or forbear from some act.”.

For a better understanding of the discourse, it is necessary to define the word “Breach”. According to the Black’s Law Dictionary,[7] a breach is “a violation or infraction of a law, obligation or agreement …whether by neglect, refusal, resistance or inaction.”  Breach of promise according to Black’s Law Dictionary[8] then is “the violation of one’s word or undertaking, especially a promise to marry. Under English common law, an engagement to marry had the nature of a commercial contract, so if one party broke the engagement without justification, the innocent party was entitled to damages.”

 

It should be noted that there cannot be a breach of marriage until a contract to marry has been made. In other words, before a party can sue for a breach of promise to marry, discussion between parties must have gone beyond mere speculations, whispering of “sweet nothings” but must have become concrete as an agreement existing between parties. It does not have to be written or spoken; as such, it can be inferred through the conduct of the parties.  In the case of Ezeanah V Atta[9] the Supreme Court per Tobi, JSC held that “while the law may at times require that an agreement to marry should be in writing, the law will be prepared to hold in appropriate cases that the parties intended to marry in the absence of any written agreement. In this respect, the court will take into consideration the institution of marriage as a trade in the relevant society and how persons generally engage themselves in agreement of marriage”. Most times, before either party can allege a breach, the relationship would have passed through certain stages. Generally, with exception of few cases, relationships pass through proposal, courtship, introduction and engagement before marriage. As earlier said, marriage is a contract and at this juncture, we shall look into the features of contract as it relates  to marriage. These features must be present in an agreement before there can be a breach of promise to marry. The following are the contractual features that define a marriage; offer, acceptance, intention to enter into legal relation, consideration, certainty and capacity.

We shall briefly look into each of these features.

 

  1. OFFER- An offer is like a proposal made by an individual to another person, in this context, from a man to a woman or vice versa. This offer is not made to the whole world but to a particular person. Therefore, an advertisement on Facebook, Twitter or any other social media searching for a spouse is not an offer but a mere invitation to treat. In such a circumstance, the person that accepts such is actually the person making the offer which must be accepted by the other person. In order to constitute an offer, it must be stated in specific terms and must be direct. An offer can be revoked before acceptance should the offeror (man/woman making the proposal) change his or her mind but such revocation must be duly communicated to the other party. The offer should not be conditional or else, it won’t be valid till the fulfillment of that condition. In FGN & Ors. V. Zebra Energy Ltd.[10] it was held per Ayoola, JSC that “Where an offer is subject to condition the formation of the contract is postponed until the happening of the event on which the offer is conditioned. If the condition of the offer is that unless something is done within a stipulated time, the offer is determined, such an offer cannot be valid until after the happening of the event.”
  2. ACCEPTANCE- The other party to whom the offer has been made must accept it. Acceptance need not be immediate but must be within a reasonable time. For instance, if a man makes an offer of marriage to a lady in year 2018 only for the lady to communicate her acceptance in year 2020, such acceptance cannot be seen as valid as it has not been within a reasonable time. Also, the acceptance must be communicated to the offeror. A woman to whom an offer is made and accepts such in her heart without communicating same to the man cannot be seen to have accepted the offer. An acceptance must not be qualified. Where the acceptance is made on certain conditions or on certain new terms different from the terms on which the offer is made, such cannot be seen as acceptance of the offer. If Mr. X proposes to Miss B and the latter accepts only on the ground that Mr. X sends her abroad, such cannot be seen as acceptance. In the case of Bilante Int’L Ltd V. N.D.I.C [11] the Supreme Court per Adekeye, JSC held that “An offer must be unconditionally and unqualifiedly accepted. An offer is impliedly rejected if the offeree instead of accepting the original offer makes a counter offer which varies the terms proposed by the offeror. A counter – offer is a statement by the offeree which has the legal effect of rejecting the offer and of proposing a new offer to the offeror. It puts an end to the previous offer of the initial offeror. The legal effect of a counter – offer is to terminate the original so that it cannot subsequently be accepted by the offeree.” Thus, an offer should be accepted on the very terms it has been made.

  3. INTENTION TO ENTER INTO A LEGAL RELATION- In the case of Sonnar (Nig) Ltd & Anor. V. Partenreed M. S. Nordwind Owners of the Ship M. S. Nordwind & Anor.[12] the Supreme Court per Eso, JSC considered how to determine the intention of parties to enter into a legal relationship and stated that, “Since the decision in the late nineteenth century in the case of Carlill v. Carbolic Smoke Ball Co. (1893) 1 Q.B. 256, the tests applied by the courts in order to determine the intention of parties to a contract have been objective rather than subjective. Would a reasonable man have regarded the offer made to him as one which was intended to create a legal relationship?” In a case of a promise to marry, to establish that parties intended to enter into a legal relationship, in other words that they agreed to marry, it must pass the test of reasonableness. It must be such that a reasonable man would have regarded as a promise of marriage intended to create a legal marital relationship and not mere cohabitation. It must be shown that there was a mutual understanding and meeting of minds between the parties that they agreed to get married.



  4. CAPACITY- In order to constitute a valid contractual agreement to marry, parties must both be capable of getting married. Incapacity of either party will render such agreement void. For instance, an offer or acceptance of marriage by a minor cannot be seen as valid even if ratified in adulthood. Such offer must be made or the acceptance made again when the minor attains maturity or such will not be valid. Again, a party must not suffer from mental incapacity at the time of entering into the agreement. Parties must be of full age (21 years under the Act) and sound mind. In the case of Uwah & Anor. V. Akpabio & Anor.[13], it was held per Muhammad, JSC that “it is trite that persons of full age and sound mind are bound by the agreement lawfully entered into by them…” A mentally imbalanced person cannot make or accept an offer. However, Section 18 of the Marriage Act provides that “If either party to an intended marriage, not being a widower or widow, is under twenty – one years of age, the written consent of the father, or if he be dead or of unsound mind or absent from Nigeria, or of the mother, or if both be dead or of unsound mind or absent from Nigeria, of the guardian of such party before a license can be granted or a certificate issued.”


  5. CERTAINTY AND POSSIBILY- The agreement will stand only if it is certain and possible. Some circumstances like place of domicile, legal documents, etc. can make it uncertain and virtually impossible for parties to marry. Where such situations are so obvious, there cannot be a valid agreement between the two parties. In the case of Alfotrin Ltd V. AG Federation & Anor. [14]it was rightly held that “…if the terms are unsettled, uncertain or vague that they cannot be ascertained with reasonable degree of certainty, there will be no valid contract enforceable at law unless the uncertain part of the contract is unsubstantial and can be separated from the vital parts thereof”.
  6. CONSIDERATION- The apex court defined consideration in the case of BFI Group Corporation V. B.P.E.[15] per Adekeye, JSC. as “some right, interest, profit or benefit accruing to one party or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other. In law, parties to a contract are free to conclude their bargain on whatever terms are deemed to be appropriate. Once the consideration is of some value in the eyes of the law, the courts have jurisdiction to determine whether it is adequate or inadequate. In principle therefore, no consideration is too small or too much or unfair in the absence of fraud, duress or misrepresentation.” From the cited case, it is very clear that consideration need not be money. Where the offeree suffers or abstains from exercising some of his/ her rights as a result of an offer to marry, such will suffice as consideration. Only that the thing/act given as consideration must be of value.

B.  LAWS GOVERNING MARRIAGES IN NIGERIA

In Nigeria, marriages are governed by legislations including the Marriage Act, the Matrimonial Causes Act, Customary Law, etc. The Marriage Act provides for the celebration of marriages while the Matrimonial Causes Act makes provisions for matrimonial causes.

 

C. BREACH OF PROMISE TO MARRY

Earlier in this paper, we had stated that marriage between parties is a contract. In the case of a breach, the aggrieved party can sue for damages. It should be borne in mind that either of the parties can bring an action for breach of promise to marry. The right to sue for a breach of promise to marry is not limited to the womenfolk but can also be instituted by a male who is aggrieved.

 

In order to successfully bring an action for breach of promise to marry, the Plaintiff must be able to prove the following:

  1. That the other Party made a promise of marriage. This kind of promise is different from just hopeful expectations, or casual suggestions.. It must be concrete and there must be a meeting of the minds between the parties. The party making the promise must clearly show his intention (through words, actions or conducts) and the other party the promise is being made to must accept it. The promissee must understand what the promisor is saying and the former must have accepted it. Acceptance need not be instant. It may be later but must be within a reasonable time.
  2. That the other party reneged on the promise. In order to prove a breach of promise to marry, the aggrieved party must be able to show that the other party failed to fulfil his/her promise. Where there is a stipulated time for the fulfillment of the promise to marry, it must be fulfilled within such time, and where no time is stated, it must be fulfilled within a reasonable time. Where the fulfillment of the promise is conditional, then there cannot be a breach until such condition has happened.

These two conditions precedent were clearly stated in the case of Ezeanah V. Atta [16] (where the Supreme Court per Tobi, JSC (as he then was) held that “Two elements are necessary to constitute a breach of agreement or promise of marriage. First, the party jilted must prove to the satisfaction of the court that there was in fact a promise of marriage under the Matrimonial Causes Act, 1990, or under Islamic Law or under Customary Law on the part of the other sex. Second, the party reneging has really and as a matter of fact failed or refused to keep to the agreement of the marriage”.

There are two types of breach of promise to marry. The first one is non – performance while the second one is anticipatory breach. There is non – performance where a date has been fixed for marriage but the other party refuses to honor such or where there is a condition precedent to the marriage taking place and the party who ought to discharge such obligation refuses to. Anticipatory breach on the other hand occurs where a party prior to the date fixed for the wedding cancels it or better still decides to elope with another person leaving the jilted party alone. Such aggrieved party whether a male or female can actually sue for breach of promise to marry. In recent times there have been instances of a groom not showing up on the day of wedding, calling the wedding off after the traditional marriage and other strange occurrences. In such situations, the aggrieved party can institute an action in court and sue for damages.

In some other cases, a lady might forfeit her education or even relocate to another country because of the promise to marry. On the part of a man too, he might invest his resources in the education of a lady, train her by spending a fortune with the understanding and agreement of marriage only for the lady to suddenly realise that  that the man is “too low” for her new found status. All these and more are instances of breach of promise to marry and can be taken up by the aggrieved party and an action instituted against the offending party.

 

D.  DEFENCES TO BREACH OF PROMISE TO MARRY

In a situation where there is a breach of promise to marry, the party in breach could have some defenses, depending on the circumstances. The Matrimonial Causes Act[17] provides instances where a marriage will be rendered void. In Oghoyone v. Oghoyone,[18] Rhode – Vivour, JCA (as he then was) stated that “A void marriage is a marriage that produces no legal consequences. That is to say it is a marriage that never took place.” In other words, in the eyes of the law, there is no marriage ab initio. The said section provides as follows:

“3.    Void marriages and prohibited degrees of consanguinity  

(1)     Subject to the provisions of this section, a marriage that takes place after the   commencement of this Act is void in any of the following cases but not otherwise, that is   to say, where‐  

(a)     either of the parties is, at the time of the marriage, lawfully married to some  other person;  

(b)     the parties are within the prohibited degrees of consanguinity or, subject to  section 4 of this Act, of affinity;  

 (c)     the marriage is not a valid marriage under the law of the place where the marriage takes place, by reason of a failure to comply with the requirements of the   law of that place with respect to the form of solemnization of marriages;  

(d)      the consent of either of the parties is not a real consent because ‐  

(i)      it was obtained by duress or fraud; or  

(ii)     that party is mistaken as to identity of the other party, or as to the nature of the ceremony performed;  

(iii)    that party is mentally incapable of understanding the nature of the marriage contract;  

(e)      either of the parties is not of marriageable age.

From the provisions of section 3(1)(a) – (e) of the Matrimonial Causes Act reproduced above, it is clear that under those circumstances, even where there is a marriage and not just a promise to marry, such will be rendered void. Also, the grounds for dissolution of marriage are set out in sections 15 and 16 of the Matrimonial Causes Act. It is most respectfully submitted that the grounds stated in the two sections will also avail a Defendant as defences in an action for breach of promise of marriage.  Therefore, where there is a promise of marriage only to discover any of the circumstances listed sections 3, 15 and 16) of the Matrimonial Causes Act, the other party who was not aware of such at the time of agreement or promise could, actually, justifiably, renege on the promise of marriage. He/she cannot be liable for breach of promise to marry even if it was shown that he/she entered into such agreement with prior knowledge of the offending situation. Few other defenses are listed as follows:

 

  1. DECEIT/MISREPRESENTATION

When a party sets out with the aim of deceiving the other party into a promise to marry, and the other party reneges on this ground, the latter cannot be sued for breach of promise to marry. Nowadays, we have instances of people undergoing surgery that radically changes their appearance, use of excessive make-up to cover a badly scarred face, and lots more. In instances like these, where a promise is based on deceit as a result of which the aggrieved party goes back on his/her promise after discovery, the promisee cannot sue for breach. Again, it is common nowadays to see transgenders who have had to undergo surgeries to change from their original sexes. If the innocent party discovers for instance that the person he/she promised to marry was originally of a different sex, he/she would be justified to renege on his/her promise.

 

II. INFIDELITY

Where a party, whether a man or a woman, discovers (with proof, not mere speculations) that the other person is not faithful but is busy messing/sleeping around, such party can opt out of the agreement to marry.

 

III.  ILLNESSES AND DISEASES

Where a party is suffering from diseases that makes it impossible to marry e.g., mental disorder, it can be a defense to breach of promise to marry.

 

E.  REMEDY FOR BREACH OF PROMISE TO MARRY

In the case of Uso v Iketubosin,[19] the defendant promised to marry the plaintiff in 1947. In 1957, the defendant married another woman in breach of his promise to the plaintiff. The Court held that the defendant’s act constituted a breach for which the plaintiff was entitled to damages. Suffice it to reiterate  that where there is a wrong, there must be a remedy – ubi jus ibi remedium. This principle of law has been applied by our courts in deserving cases. In Bello V. AG, Oyo State [20], Karibi- Whyte, JSC (as he then was) stated as follows:

“…  I think it is erroneous to assume that the maxim ubi jus ibi remedium is only an English Common law principle. It is a principle of justice of universal validity couched in Latin and available to all legal systems involved in the impartial administration of justice. It enjoins the courts to provide a remedy whenever the Plaintiff has established a right. The court obviously cannot do otherwise. …. the court will give a remedy where the facts as disclosed fall within a remedy recognized by law. I think this is a correct principle deducible from Falobi V. Falobl (Supra).”

A wrong in form of breach of promise to marry is not just a moral wrong but also a legal wrong as it is identified under our Laws and provisions as such. Most times, awards for damages are in form of money and properties.  It is very important that an award of damages in this kind of action is at the discretion of the Honorable Court which must be judiciously and judicially exercised upon proof of both promise to marry and breach of same. The Evidence Act, 2011[21] provides that “No Plaintiff in any action for breach of promise of marriage shall be entitled to succeed unless his or her testimony is corroborated by some other material evidence in support of such promise; and the fact that the defendant did not answer letters affirming that he had promised to marry the Plaintiff is not such corroboration.” It therefore follows that in order to prove to be entitled to damages for breach of promise to marry, the testimony of the aggrieved party must be corroborated. According to Black’s Law Dictionary,[22] “Corroboration is a confirmation or support by additional evidence or authority” In Iko v. State,[23] Kalgo, JSC (as he then was) adopted the statement of Lord Morris in D.P.P. v. Hester[24] that “The purpose of corroboration is not to give validity or credence to evidence which is deficient or suspect or incredible but only to confirm and support that which as evidence is sufficient and satisfactory and credible: and corroborative evidence will only fill its role if it itself is completely credible evidence.” It is clear from the provisions of section 197 of the Evidence Act[25] that the form of corroboration required is material evidence such as letters or other documentary evidence.

However, as already stated, there must be proof of promise to marry otherwise it will be seen as a mere love affair without more. In the case of Ezeanah V. Atta[26] the Appellant and the Respondent were lovers. In the course of their relationship, the Respondent lavished gifts as the dominant partner on the Appellant, including sponsorship for further studies in England. What brought the parties to Court was the ownership of Plot 999 Cadastral Zone B6, Mabuchi District, Abuja, which was acquired during their relationship. The Appellant claimed before the Abuja High Court for the ownership of the property by seeking for declaratory, mandatory injunctive  and damages as reliefs. The Appellant claimed that she applied for and completed the application form for the land in her own handwriting and signed it, and that she paid an application fee of ℕ300 and an additional sum of ℕ6,700.00 demanded by the Federal Capital Territory. The certificate of occupancy was issued in the name of the Appellant but the Respondent took possession thereof and refused to give her the Certificate of Occupancy and instead started developing the land. On his part, the Respondent claimed that there was a breach of promise to marry on the part of the Appellant upon which basis he could no longer oblige her the property, the subject matter of the litigation, the consideration having failed. The Trial Court gave judgment in favor of the Appellant but the Court of Appeal overturned the judgment when the Defendant Appealed. On further Appeal, the Supreme Court set aside the judgment of the Court of Appeal and restored the judgment of the Trial Court. In the words of Tobi, JSC “Premarital gifts in order to qualify as gifts in furtherance of an agreement to marry, must be clearly and unequivocally traceable to an agreement on the part of the parties to marry. Where gifts part from any of the parties to the other on love and not on the business of agreement to marry, with all the ingredients of offer, acceptance, consideration, intention to create legal relation and capacity to contract the agreement, the court must not come to the conclusion that parties agreed to get married hence the gifts. That is not the talking of the law.”[27] (emphasis supplied). In his concurring judgment Pats – Acholonu, JSC stated as follows:

“In fact, this is a case that the respondent should have spared himself the agony of going through the court processes. For him, when the going was good he lavished love (I imagined it was reciprocated), money and eventually landed property on the appellant. When the tide turned, he fell back on non-existent agreement to marry and urged the Court to go the extra mile of pronouncing the existence of a resulting trust. I refuse to lend hand to assuage the feelings of a lover whose romance went awry. The love that once bound these two people and now got frosted can be likened to verse xxxv of Shakespeare “Sonnets” a sort of lamentation, and also verse 1 of “Passionate Pilgrim”. Thus we have in this case so much love and then so much pain. It is the way of the world”.[28](emphasis supplied)

Again, it should be noted that in a case of breach of promise to marry, the court cannot order specific performance. The court only makes an order of performance where it is possible. In the case of Help (Nig) Ltd V. Silver Anchor (Nig) Ltd[29] Tobi, JSC held that “This Court can only decree specific performance for a purpose which can be achieved or enforced. It cannot decree specific performance in vain. In other words, this Court cannot decree specific Performance which cannot be achieved or enforced.”

 



CONCLUSION

Marriage is not only a family, traditional, cultural, moral or religious issue. It is also a legal issue and should never be taken lightly as a breach of promise of marriage is actionable in law. When there is a breach of promise of marriage, an aggrieved party, whether male or female, may institute an action for damages. Such an aggrieved party does not have to suffer in silence, and should never resort to self – help, a remedy which has been condemned in a plethora of decided cases. In Agbai & Ors. v. Okogbue,[30] Nwokedi, JSC stated that self – help “is a primitive remedy capable of causing a breach of the peace … the magnitude of which no one may conjecture …” Where there is a clear breach of promise of marriage, aggrieved persons should therefore avail themselves of the machinery of the law to seek redress. If in the near future, we read less stories of the sort that were told at the outset of this discourse, and a number of persons approach the courts seeking redress for breach of promise of marriage, the purpose of this article would have been well served.

 

This article was authored by Theophilus Ochonogor and Charity Ayo Olaifa of Alliance Law Firm.

 

 

REFERENCES:

[1]              Tenth Edition at page 1117                                                

[2]              Sixth Edition Centennial Edition ( 1981- 1991) at page 972

[3]              (2013) LPELR 21863 (SC) at page 61.

[4]              Supra, note 1 att page 389- 390

[5]              Tenth Edition at page 1406

[6]              (1995) LPELR – 251 (SC) at 29, paras E – F

[7]              Tenth Edition at page 225

[8]              Tenth Edition at page 226

[9]               (2004) LPELR- 1198 (SC) at pages 20 – 21, paras E – C.

[10]             (2002) LPELR-3172 (SC) at pages 42 – 43’ paras F – B

[11]             2011) LPELR – 781(SC) at page 28, paras C – F

[12]             (1987) LPELR – 3494 (SC) at page 26, paras A – C.

[13]             (2014) LPELR-22311(SC) at pages 25 – 26 Par E – B

[14]             (1996) LPELR-414(SC) at pages 29 – 30, Paras B – A,

[15]             (2012) LPELR-9339 (SC) PP. 39-40, Paras E-C)

[16]             (2004) LPELR – 1198 (SC) at pages 19 – 20 Paras F – B

[17]             Section 3(1)(a) – (e)

[18]             (2010) LPELR – 4689 (CA) at page 11D – F.

[19]             [1975] WRNLR 187  

[20]          (1986) 5 NWLR (Pt. 45) 828 at 870 – 871

[21]              Section 197

[22]             Tenth Edition at page 421                                                                             

[23]             (2001) LPELR 1480 (SC) at 13E – F.

[24]             (1973) AC 296 at 315

[25]

[26]             (2004) LPELR – 1198 (SC).

[27]             (2004) LPELR – 1198 (SC) at pages 36A – E

[28]              (2004) LPELR – 1198 (SC) at pages 73B – F.

[29]              (2006) LPELR – 1361(SC) P.21, PARAS. B-C.

[30]              (1991) LPELR – 225 (SC) at page 30C – D.

Data Privacy and Data Protection Law in Nigeria

The transformational value of data in today’s world cannot be overemphasised. The right to data privacy and protection is an internationally guaranteed right, which enjoys protection universally. Data protection is the process of safeguarding important information from corruption, compromise or loss…

 

ABSTRACT

The transformational value of data in today’s world cannot be overemphasised. The right to data privacy and protection is an internationally guaranteed right, which enjoys protection universally. Data protection is the process of safeguarding important information from corruption, compromise or loss. The importance of data protection increases as the amount of data created and stored continues to grow. Consequently, a large part of any data protection strategy is hinged on ensuring that data can be restored quickly after any corruption or loss. Protecting data from compromise and ensuring data privacy are other key components of data protection; however, where there are no laws to enforce in the event of breach, the value of those rights is lost. In order to uphold the sanctity of these rights, sovereign nations of the world put in place regulations and other mechanisms to guarantee them. Nigeria is not left out in this global community of data privacy and protection regulation. This paper seeks to evaluate the laws which regulate and protect data in Nigeria and how they could impact her data privacy and data protection regime.

 

Keywords: Data Protection, Data Privacy, Safeguards, Corruption, Compromise.

 

  1. INTRODUCTION

This paper seeks to interrogate the significant provisions of the National Information and Technology Development Agency Regulation (NITDA Regulation) that impact data protection and data privacy in Nigeria. The challenge of securing data privacy/protection is a worldwide phenomenon. The NITDA Regulation is Nigeria’s most comprehensive attempt yet to tackle this phenomenon and to bring it within tolerable limits.   

The world’s most valuable asset is no longer oil, but data.[i][1] Data has been described as individual units of information, which may be measured; collected and reported; stored and analysed. In computing, data is information that has been translated into a form that is efficient for movement or processing.[2] Data is considered to be the ‘oil’ of the digital era.[3] The world’s most valuable companies include tech giants such as Google, Apple, Facebook and Amazon (GAFA) and Baidu, Alibaba and Tencent (BAT) whose subscribers are routinely required to provide their data to facilitate access. The internet and smartphones have contributed significantly to making data more valuable, available and abundant. Almost every human activity generates a digital trace. For example, our heart beat, our pulse, a running event, navigating through traffic are all activities which produce data when connected to the internet. The more cars, watches and phones that are connected to the internet the more data that can be generated. Artificial Intelligence through algorithms has become so smart today that they can now review contracts, conduct legal research and mediation, predict exposure to disease and determine when a machine needs servicing. The data industry has demonstrated such exponential growth that certain multinationals now position themselves as data purveyors and merchants.

 

Typically, internet subscribers and social media users are required to provide personal data and sensitive information to facilitate access and use of these platforms. Almost all transactions conducted online require the release of some form of personal data. Although, social media users are often advised of data privacy terms, they do not necessarily preclude the use or sharing of such personal data in specified circumstances. This introduces the risk of having personal sensitive information being potentially shared with or sold to high level security agents or blue-chip companies to enable surveillance and data gathering.

 

According to a survey by McAfee, more than 40% of people worldwide are of the view that they lack control over their personal data, and one–third of parents do not know how to explain online security risks to their children.[4] In 2008, there was widespread information regarding how top brands such as Facebook, Panera Bread and Sacramento Bee experienced data breaches that exposed several millions of personal records to abuse by criminals.[5] There appears to be a lucrative market for data, and hackers tend to sell data they steal to professional scammers.

 

These worrying statistics and developments have generated widespread concerns around how to improve security frameworks over the personal data we provide, in the knowledge that data protection laws never fully offer complete protection against malicious attacks and users are best advised to understand the basics of data privacy and how to protect themselves. Google, Uber and Facebook have experienced breaches of the private data of users over the years and, on each occasion, these supposedly trusted companies failed to report/disclose the breaches (when they occurred) to enable customers take steps to protect themselves. The failure by these companies to disclose data privacy violations when they should have, underscores the importance of users taking personal data security as their personal responsibility.

 

The General Data Protection Regulation (EU) 2016/679 (‘GDPR’) and the 2018 reform of the GDPR are regulations under EU law concerning data protection and privacy for all individual citizens of the European Union (EU) and the European Economic Area (EEA). It also deals with the export of personal data outside of the EU and EEA. In Nigeria, while there are several legislations containing ancillary provisions which seek to protect data privacy, the most comprehensive statutory instrument for this purpose is a subsidiary legislation made pursuant to the National Information Technology Development Agency Act, 2007 (‘NITDA Act’). The NITDA Act empowers the National Information Technology Agency (NITDA) to inter alia develop guidelines/regulations for electronic governance and monitor the use of electronic data interchange in both the private and public sectors of the economy.[6] Deriving from this provision, NITDA then developed and issued the 2013 Guidelines for Data protection and thereafter, the Nigeria Data Protection Regulation 2019 (‘NITDA Regulation’), which is the extant body of rules regulating the subject in Nigeria. A significant feature that distinguishes the NITDA Regulation from other legislation in Nigeria is the element of it being a data protection-specific body of rules as opposed to it being an ancillary provision in a legislation which is not primarily concerned with data privacy protection.

 

  1. RELEVANT LEGISLATION IMPACTING DATA PROTECTION AND DATA PRIVACY UNDER NIGERIAN LAW

Based on the functions of the Governing Board, National Information Technology Development Agency,[7] NITDA would appear to be the apex regulator for data privacy and protection in Nigeria. However, this is without prejudice to the powers exercisable by the regulators listed in the specific legislations which have data privacy and protection provisions, regarding their enforcement of those provisions in the manner set out in the legislations creating them. The provisions contained in the NITDA Regulation do not also affect the existing rights of natural persons or Nigerians under any other extant law, regulation, policy or contract.[8]

 

2.1       NITDA Regulation

In Nigeria, while there are several legislations containing ancillary provisions which seek to protect data privacy, the most comprehensive statutory instrument for this purpose is a subsidiary legislation made pursuant to the NITDA Act. The NITDA Act empowers the National Information and Technology Agency (NITDA) to issue guidelines to cater for electronic governance and monitoring the use of electronic data exchange. Deriving from this provision, NITDA then developed and issued the Nigeria Data Protection Regulation 2019. A significant feature which distinguishes the NITDA Regulation is that it is a data privacy and protection-specific body of rules as opposed to it being an ancillary provision in a legislation whose primary objective is not data protection.

 

2.2       The 1999 Constitution of the Federal Republic of Nigeria

As is applicable to most jurisdictions, Nigeria’s data privacy and data protection regime emanates from the fundamental legislation of the land i.e. the Constitution of the Federal Republic of Nigeria 1999, as amended (“the Constitution”), which, by virtue of section 37 thereof protects the rights of citizens to their privacy and the privacy of their homes, correspondence, telephone conversations and telegraphic communication. Data privacy and protection are thus extensions of a citizen’s constitutional rights to privacy. 

 

2.3       The Child Rights Act

Nigeria adopted the Child Rights Act (CRA) in 2003 to domesticate the United Nations Convention on the Rights of the Child, which is a human rights treaty designed to guarantee the civil, economic, political, social, health and cultural rights of children. The CRA is a legislation to provide for and protect the rights of a Nigerian Child, who is defined as a person under the age of 18 years. Section 3 of Part II CRA incorporates by reference the provisions of Chapter IV of the Constitution, which deal with the fundamental rights of citizens. Also, section 8 of the CRA which covers a child’s rights to private and family life states that a child is entitled to his privacy, family life, home, correspondence, telephone conversations and telegraphic communication. 

 

2.4       Freedom of Information Act 2011(FOIA)

The purpose of the FOIA is to make public records and information held by Government agencies more freely accessible by the public. However, it specifically makes an exception with respect to personal records and information and matters concerning personal privacy.  In this regard, section 14 of the FOIA limits Government agencies from disclosing the personal information of citizens unless the individual’s consent is obtained, or the information is publicly available.

 

2.5       Cybercrimes (Prohibition, Prevention etc) Act 2015 (CPPA)

The fundamental purpose of the CPPA is to establish a framework for the prohibition, prevention, detection, prosecution and punishment of cybercrimes in Nigeria. It imposes an obligation on mobile networks, computer and communications service providers to store and retain subscriber information for a period of two years. Significantly, it requires such service providers to accord premium to an individual’s right to privacy as enshrined in the Constitution and to take steps towards safeguarding the confidentiality of data processed. 

 

2.6       Central Bank of Nigeria Consumer Protection Framework 2016 (CPF)

The Central Bank of Nigeria (CBN), in furtherance of its mandate to promote stable financial system, established the CPF to, among other objectives, engender public confidence in the financial system. The CPF itself is a subsidiary legislation made pursuant to the Central Bank of Nigeria Act 2007 (CBN Act) as amended and the Banks and Other Financial Institutions Act, 2007 (BOFIA). The provisions of section 3.1(e) of the CPF are to the effect that consumer information must be protected from unauthorised access and disclosure. In order to enable disclosure, financial services institutions are required to obtain written consent of customers before their data may be shared with third parties or for promotional purposes.

 

2.7       The Nigeria Communications Commission (Registration of Telephone Subscribers) Regulations 2011 (NCC Regulations)

Pursuant to section 70 of the Nigerian Communications Act 2003 (NCA 2003), the NCC is empowered to make and publish regulations concerning multiple subjects including but not limited to permits, written authorisations, licenses, offences and penalties relating to communication offences. Drawing from this authority, the NCC issued the NCC Regulations which apply to telecommunications companies. Regulation 9 of the NCC Regulations specify that, in furtherance of the rights guaranteed by section 37 of the Constitution and subject to any guidelines issued by the NCC or a licensee, any subscriber whose personal information is stored in the Central Database is entitled to request updates;[9] to have the data kept confidential;[10] not to have subscriber information duplicated except as prescribed by the NCC Regulations or an Act of the National Assembly;[11] and to preserve the integrity of the subscriber’s information.[12] Also, licensees are required to utilise subscriber’s information in accordance with the law;[13] likewise, licensees and other named parties are required not to retain biometrics of any subscriber after transmission to the Central Database.[14] Regulation 10 of the NCC Regulations is to the effect that any release of the personal information of a subscriber must be subject to the consent of the subscriber or in accordance with the provisions of the Constitution of the Federal republic of Nigeria or any other Act of the National Assembly or the NCC Regulations as may be amended from time to time. 

 

2.8       The Credit Reporting Act 2017 (CRpA)

The CRpA was enacted for the purpose of improving access to credit information and standardising risk management in credit transactions. It provides the framework for credit reporting, licensing and credit bureaux. Section 9 of the CRpA is to the effect that Data Subjects i.e. persons whose data are maintained by credit bureaux, shall be entitled to the privacy, confidentiality and protection of their credit information subject to certain exceptions listed under section 9(2) to 9(6) of the CRpA.

 

  1. A REVIEW OF THE NIGERIA DATA PROTECTION REGULATION 2019

The objectives of the NITDA Regulation are to safeguard the rights of natural persons to data privacy, foster the safe handling of transactions which involve the exchange of personal data, prevent acts of manipulation relating to personal data, and ensure that Nigerian businesses remain competitive in the international market place through adoption of legal and regulatory frameworks which secure personal data and meet standards of international best practices.

3.1       Scope of Application

The data protection provisions embodied in the NITDA Regulation extend to all transactions regarding processing of personal data irrespective of the means, all natural persons residing in Nigeria or natural persons outside Nigeria who are citizens of Nigeria, in so far as the operation of the NITDA Regulations does not impair the privacy rights of natural persons or Nigerians under other extant laws, regulations, policies or contracts. 

 

3.2       Governing Principles of Data Processing

Personal data should be collected and processed observing specific, lawful and legitimate purpose as consented to by a Data Subject i.e. owner of the data being collected and processed:

  1. Personal data shall be adequate, accurate and respect dignity of the human person; 
  2. Storage of Personal data should be on a need-to-retain basis; 
  3. Personal data should be secured against foreseeable hazards; 
  4. The custodian of personal data owes a duty of care to the Data Subject; 
  5. The custodian of personal data is accountable for his acts or omissions; 
  6. Lawful Processing of Personal Data.

The conditions under which Personal Data would be deemed to have been lawfully processed have been highlighted below:[15]

  1. Where consent of the Data Subject has been procured;
  2. Where processing is necessary for the performance of contract to which the Data Subject is a party; 
  3. Where it is required for compliance with a legal obligation which the Data Controller i.e. the person or body of persons who determine the purposes for which and manner in which Personal Data is being or to be processed, is required to discharge; 
  4. Where it is required to protect the vital interests of the Data Subject; 
  5. Where it is required for carrying out a task in the public interest or in the exercise of an official public mandate imposed on the Data Controller.

3.3       Procuring Consent from a Data Subject

The NITDA Regulation prescribe the circumstances under which consent may be extracted from a Data Subject as follows:[16]

The specific purpose of collection of Personal Data must be made known to the Data Subject before his consent may be secured and deemed lawful;

The Data Controller is obliged under the law to ensure that consent of the Data Subject is obtained without fraud, coercion or undue influence; and in doing so, regard must be had to the legal capacity of the Data Subject, whether the Personal Data consented to be unambiguous. The Data Subject must be aware of his right to withdraw his consent at any time (provided that he is bound by acts carried out pursuant to initial consent before withdrawal), and also, the nature of the consent must be examined, to determine whether it is conditional or excessive for the performance of the contract, and whether data is transferable to a third party under a contract.

 

 

3.4       Privacy Policy to be Displayed

All media through which Personal Data is being collected must display in a simple, conspicuous and understandable manner, their applicable privacy policy. The minimum requirements for such a privacy policy are as set out below:[17]

  • What represents consent for the Data Subject;
  • Description of personal information that is collectible;
  • Purpose of Personal Data being collected;
  • Technical methods deployed to source and store personal information, cookies, web tokens etc.;
  • Whether third parties have access, and if so, nature of;
  • Principles governing data processing;
  • What remedies can be resorted to in the event of breach of privacy policy;
  • Limited period for exercising remedy;
  • No limitation clause would avail any Data Controller who is in default of the NITDA Regulation.

 

3.5       Data Security and Third-Party Data Processing Contract

The NITDA Regulation imposes an obligation on persons involved in data processing or control of data to develop security measures to protect data including safeguards against hackers, setting up firewalls, employing data encryption technologies and similar approaches.[18] 

NITDA Regulation provides that data processing by third parties should be governed by written contracts between such third parties and the Data Controller. [19]

 

3.6       Penalty for Default

Breach of the privacy rights of any Data Subject under the NITDA Regulation shall, apart from other criminal liability, attract, with respect to Data Controllers dealing with more than 10,000 Data Subjects, payment of a fine of 2% of annual gross revenue of the preceding year or payment of N10 million, whichever is greater; and with respect to Data Controllers dealing with less than 10,000 Data Subjects, a fine of 1% of the annual gross revenue of the preceding year or payment of ₦2 million, whichever is greater.[20] 

 

3.7       Transfer of Personal Data to a Foreign Country and Exceptions

NITDA Regulation circumscribe the manner in which the transfer of Personal Data to a foreign country is to be effected. While observing the provisions of the Regulation and conducting such transfers under the supervision of the Honourable Attorney General of the Federation (HAGF), the following considerations shall be taken into account:

  1. The foreign country provides an adequate level of protection;
  2. Legal system and enforceability of human rights in the foreign country;
  3. Effectiveness of supervising authority for data privacy in the foreign country;
  4. International commitments of the foreign country with respect to protection of Personal Data.

In the absence of a decision by the HAGF as to the adequacy of the above considerations, such transfers shall only take place where consent of the Data Subject has been secured; transfer is necessary for the performance of a contract or is required for the performance of a public interest purpose; or in establishment, exercise or defence of legal claims or in defence of the vital interests of the Data Subject.

 

3.8       Rights of a Data Subject

The NITDA Regulation provide elaborately for the rights of the Data Subject and these rights include the minimum requirements for processing personal data, right of the Data Subject to be informed of appropriate safeguards for data protection, rights of the Data Subject to request deletion of personal data in appropriate cases and reiteration of the protection of fundamental rights as afforded by the constitution of the Federal Republic of Nigeria.

 

3.9       Implementation Mechanism           

The NITDA Regulation has established rules which govern the manner in which the provisions of the Regulation should be implemented. The major planks on which implementation rests are discussed below.[21]

All public and private organisations in Nigeria that control the data of natural persons must publish to the general public their respective Data Protection Policies within three months of issuance of the NITDA Regulation.

Furthermore, a Data Protection Officer shall be designated by every Data Controller to ensure adherence with the provisions of the NITDA Regulation and such Data Controllers are required to ensure continuous capacity building for Data Protection Officers;

NITDA shall register and license Data Protection Compliance Organisations (DCPOs), which shall have responsibility for monitoring, auditing, training Data Controllers on its behalf.

All organisations are required to, within six months of the issuance of the NITDA Regulation, conduct an audit of its privacy and data protection practices having regard to the provisions of the Regulation. Also, where a Data Controller processes the Personal Data of more than 1000 Data Subjects over a six-month period, a soft copy of the summary of the audit mentioned above should be submitted to NITDA.

Finally, on an annual basis, Data Controllers who manage the Personal Data of over 2000 Data Subjects over a twelve-month period, shall no later than 15 March of the following year, submit a summary of the Data Protection audit in the manner specified by the Regulation to NITDA.

 

  1. EFFECTS OF THE PROVISIONS OF THE NITDA REGULATION AND ITS STATUS IN THE NIGERIAN DATA RIVACY AND DATA PROTECTION REGIME

The establishment of NITDA Regulation is one deserving of commendation by all. It is, indeed, the most elaborate attempt by Nigeria to codify the private right to data and its protection. What this portends is that it provides confidence to all stakeholders, local and foreign, who seek to invest and do business in Nigeria that it has data laws comparable to any in the world. It represents an important step towards keeping abreast with the digital revolution and a stamp of approval for the value of safeguarding digital rights within Nigeria. Nigeria’s technological advancement is perennially on an upward trajectory and the net effect of embracing a comprehensive data privacy and protection regime will manifest in a number of positive ways, some of which we have attempted to highlight in the paragraphs that follow.

 

4.1       Upholding and Guaranteeing the Right to Privacy

The adoption of a data privacy and protection legislation is an acknowledgement of the right of persons to preserve those rights as guaranteed under the Nigerian constitution. This promotes information exchange and development of our digital economy space.

 

4.2       Reinforcement of Nigeria’s Cyber Security Regulations

With the establishment of NITDA Regulation, Nigeria has assumed a definitive stand on the war against cybercrimes, which has become a domestic and cross-border menace. It has placed Nigeria as a respectable member of the comity of serious-minded nations who are committed to stamping our cybercrimes or, at least, mitigating the debilitating consequences they wreak on several economises across the world. It is important to mention that security upgrades in networks, servers and infrastructures have been a primary source of cyber protection along with other policy and security changes until recently. The passing of the NITDA Regulation has directly impacted data privacy and security standards while also indirectly encouraging businesses to develop and improve their cyber security measures, limiting the risks of any potential data breach.

 

4.3       Uniformity of Data Protection

Prior to the establishment of the NITDA Regulation, it was safe to assert that Nigeria had no uniform or comprehensive body of rules regulating data privacy and protection save for those earlier highlighted in this paper. The NITDA Regulation has thus, brought about a sense of sanity and standardisation in this space which satisfy international expectations.

4.4       Premium Budgeting for compliance with NITDA Regulations

With consequential enforcement action, this legislation provides a credible basis for cracking down on offenders for non-compliance with its provisions. We expect that companies will increasingly channel resources towards bringing their operations in alignment with the provisions of the NITDA Regulation including appointment of Data Protection Officers.  

 

4.5       Reforms in Marketing

Marketers have, typically, relied heavily on the personalised data gathered from our internet practices and tendencies to reach target markets and shape their campaigns. They will have to get explicit permission to use personal data and be clear about how they gather that information, going forward. The changes and increased barriers brought about by data privacy laws may turn some in-house marketing teams and agencies back to traditional marketing methods.  Also, many sites charge their users nothing to use their site but will pay to keep everything running by selling data about their users to advertisers. Some speculate that there may be an increase in sites charging for memberships and subscriptions to maintain their sites without the free data. 

 

  1. CONCLUSION

Without question, the NITDA Regulation constitutes a transformational attempt to radicalise the data privacy and protection regime in Nigeria. As shown in this paper, several countries of the world have adopted the principles set out in the internationally recognised standards of the GDPR in formulating their domestic laws in this area. Nigeria has similarly followed suit and come up with the NITDA Regulation which encapsulates wholesale changes to what hitherto existed.

We expect a paradigm shift in the way corporations and individuals carry on business and interact with respect to the data in their possession. While we have highlighted scenarios that could landscape this space in a post-NITDA Regulation era, we challenge the government to ensure that its provisions are effectively enforced. A robust enforcement framework primed to give teeth to its provisions will, in our view, enable realisation of its promise.

This article was authored by Uche Val Obi, SAN; Managing Partner, Alliance Law Firm.

 

 

REFERENCES

[1] The Economist, ‘The World’s Most Valuable Resource is no Longer Oil, but Data’   Economist (6 May 2017) <https://www.economist.com/leaders/2017/05/06/the-worlds-most-valuable-resource-is-no-longer-oil-but-data> accessed 25 October 2019

[2] Jack Vaughan, ‘Guide to telling stories with Data: How to share analytics insights’ (Techtarget, July 2019) <https://searchdatamanagement.techtarget.com/definition/data> accessed 25 October 2019

[3] The Economist (n 1)

[4] The Manifest; ‘Data Privacy Concerns: An Overview for 2019’ <https://medium.com/@the_manifest/data-privacy-concerns-an-overview-for-2019-2ccea79aa6f8> accessed 5 August 2020

[5] ibid

[6]  NITDA Act, s 6(c)

[7] NITDA Act, s 6(a) – (n)

[8]NITDA Regulations, Paragraph 1.2(c)

[9] NCC Registration of Telephone Subscribers, reg 9(1)

[10] ibid reg 9(2)

[11] ibid reg 9 (3)

[12] ibid reg 9(4)

[13] ibid reg 9(5)

[14] ibid reg 9(6)

[15] NITDA Regulation, para 2.2(a-e)

[16] ibid paras 2.3 (1) & (2)

[17] ibid para 2.5(a) – (i)

[18] ibid para 2.6

[19] ibid para 2.7

[20] ibid para 2.10

[21] ibid para 3.0(3.1)-(3.8)

Confronting The Menace Of Rape In Nigeria And Helping Survivors To Heal

In her book titled “The Purity Myth: How America’s obsession with Virginity is Hurting Young Women”, Jessica Valenti engages the trivialization of rape in society and how, typically, the victim tends to be blamed for playing a contributory role in her dehumanization and most excruciating experience. She posits as follows: “Now, should we treat women as independent agents, responsible for themselves? Of course. But being responsible has nothing to do with being raped. Women don’t get raped because they were drinking or took drugs. Women do not get raped because they weren’t careful enough. Women get raped because someone raped them.”

  1. Introduction

In her book titled “The Purity Myth: How America’s obsession with Virginity is Hurting Young Women”, Jessica Valenti engages the trivialization of rape in society and how, typically, the victim tends to be blamed for playing a contributory role in her dehumanization and most excruciating experience. She posits as follows: “Now, should we treat women as independent agents, responsible for themselves? Of course. But being responsible has nothing to do with being raped. Women don’t get raped because they were drinking or took drugs. Women do not get raped because they weren’t careful enough. Women get raped because someone raped them.”

The American experience on rape issues is a prototype of societal sentiment in Africa, perhaps even direr, especially in Nigeria.  The notion that, somehow, when a person gets raped in Nigeria, (statistically, usually a woman) the victim must share in the causative factors leading up to the despicable conduct of their violators, has, historically, been partially responsible for the general reluctance of survivors to step out of their closets to report the crime. This should not be the case in any developing society that seeks to enthrone a framework of accountability for the actions of adult members of society.

As in America, rape is grossly underreported in Nigeria owing to fear of reprisal, victim shaming and as alluded to the above, the blame – allocation to survivors. Nonetheless, on June 15, 2020, at a press conference with State House correspondents at State House, Abuja, the Inspector General of Police in Nigeria, reported that 717 rape cases were recorded between January and May 2020. He stated further that 799 suspects had so far been arrested, while 63 cases had been conclusively investigated and charged to court, with 52 cases still under investigation.[1]

The advent of the Covid 19 pandemic has led the Federal Government of Nigeria to impose a bouquet of public health measures including social/physical distancing protocols, enhanced personal hygiene practices and varying levels of lockdowns across the country. Disturbingly, since then, there has been an increase in reported cases of sexually-related offences which include acts of sexual violence, statutory rape, defilement, sexual abuse and harassment. However, this article is focused primarily on the criminal behavior of rape and defilement.

In Nigeria, there are several laws in place regulating sexual conduct and related offences. These are codified mainly in the Criminal Code, Penal Code, Childs Rights Act and Violence against Persons (Prohibition) Act. As we know, the existence of these various legislations has not resulted in curbing the incidence of these sexual offences as there still exists an increasing number of reported cases which, it would seem, have spiked significantly during this pandemic. For instance, the Lagos State Government-run Domestic and Gender Violence Response Team (“DGVRT”) recently reported that it had been besieged with increased reports of sexual violence since the start of the lockdown in March, 2020. In fact, the DGVRT reported that before the lockdown, an average of 8 cases was being received daily but that since the lockdown the number had increased to about 13 new cases daily. The DGVRT also stated that the team had received 390 reports in March, 2020 alone which signified a 30 percent rise in cases of sexual violence.[2]

A number of reasons have been adduced or are responsible for this surge, details of which will be considered in the course of this piece. It bears mentioning at this juncture that governments with high incidence of rape cases need to look beyond just legislation to fix the problem; they would also need to consider deep cultural and social dysfunctions within their societies that either encourage sexual violence or do not prevent it.  The continuing menace of sexually related offences in our society exacerbated by the recent surge in such cases is the primary motivation for this article. Victims and survivors have had to bear the unusual burden of being presumed guilty until proven honest, when that burden should ordinarily reside with an assailant. This article helps to illuminate, inter alia, some of the more pressing issues relating to rape and defilement in our society and how survivors can be assisted to heal, recover and reintegrate into society as valuable contributors and not as damaged or bitter stakeholders.

 

  1. What is rape?

Rape is defined as the unlawful carnal knowledge of a person without his or her consent, or with consent, if the consent is obtained by force or by means of threats or intimidation of any kind, or by fear of harm or by means of false and fraudulent representation as to the nature of the act.[3]  When the term ‘carnal knowledge’ or ‘carnal connection’ is used in defining an offence, it is implied that the offence, so far as regards that element of it, is complete upon penetration.[4]  Therefore to prove that the offence of rape has been committed, there must have been a complete act of penetration. The offence of rape is similar to that of defilement. Defilement is, in simple terms, the unlawful carnal knowledge of minors. Statutory rape, on the other hand, is a situation where an adult has ‘consensual’ sexual intercourse with a person who has not attained the statutory age of consent.

 

  1. Surge in incidence of rape

The Covid 19 pandemic and the attendant lockdown order mandated individuals to stay home and most non-essential businesses to temporarily shut down. As earlier alluded to, there has been an increased incidence of rape and defilement cases during the lockdown and a number of reasons have been adduced for this state of affairs. For instance, ActionAid Nigeria reported that since the lockdown in March, 2020, it had recorded 253 cases of gender-based violence in Bauchi, Cross River, Enugu, Kebbi alone, which data only represents the number of reported cases and does not, therefore, include cases not reported[5].

The European Institute for Gender Equality has identified this phenomenon as a global problem and has stated that, although women and men experience the increased gender-based violence, women and girls have, indeed, been worse hit. Consequently, the United Nations has sensitized countries across the globe regarding this development, which it attributes to forced proximity of people caused by the global lockdown. [6] Arguably, the inability of law enforcement agencies in Nigeria to devise effective strategies towards curtailing acts of violence amongst citizens has in turn resulted in the increase in cases of sexual violence which is evidenced in the nature and sheer brutality of the recently reported cases of rape and murder of girls and women, particularly in the month of May, 2020[7]. It is pertinent to state here that even before Covid 19 existed, sexual offences in Nigeria had been a matter of growing concern, however, it seemed to have taken a turn for the worse since the advent of the pandemic. [8]

 

  1. Reasons for surge and challenges associated with proof and prosecution of rape cases

The difficulty in prosecuting sexual offences in Nigeria has only worsened the rape pandemic as, in most cases, the perpetrators are allowed to walk free and emboldened to re-enact such despicable conduct on future unsuspecting victims. Some of these challenges in prosecuting sexual offences range from the reluctance of victims to report such crimes, the existence of loopholes in the relevant criminal laws relating to sexual offences, ignorance of persons on the proper procedures and channels to follow when such offences occur, the inability to prove such cases successfully when instituted, and the seeming reluctance of judicial authorities to impose the full punishment prescribed by law on convicted offenders.

The reluctance of victims of sexual offences to report cases is a major factor that has compounded the prevalence of such offences. This factor could be traced to the popular notion that a victim must have committed some contributory act (such as wearing clothes that exposed parts of their bodies, moving around late at night, visiting persons of the opposite sex alone etc.) that made him/her susceptible to that crime. The mainstreaming of this societal belief system that entails blaming the victim rather than the perpetrator, is in this writer’s view, at the heart of fixing this social menace: it undermines the effectiveness of any proactive step taken to tackle the problem. The recent case of a mother beating up and blaming her 2-year-old daughter for getting raped and paying no attention to the rapist is a classic case in point.[9] This discourages victims from speaking up as they reckon that their complaints would be treated with kid gloves by the Police.

Lacunas exist in our existing laws on sexual offences which militate against effectual prosecution of complaints.  For instance, the offences of rape and defilement are not gender specific, however, the Criminal Act and Penal Code[10], the prominent laws on sexual offences in Nigeria, both recognize females as the only gender capable of being abused sexually. These provisions make penetration of the vagina an essential element in establishing rape and allied offences. These provisions, in effect, automatically exclude from application cases of sexual abuse against males. The Criminal Code also regards a male below the age of 12 years as being incapable of having carnal knowledge.[11] In the author’s considered view, this provision is completely flawed and does not take into account present day realities in which male children of lower ages have been reported to be involved in such acts. Where the law does not recognize an act as an offence, how then can a victim of same obtain justice and how can such perpetrators be brought to justice?

Section 218 of the Criminal Code Act goes further to prescribe a limitation period within which such actions must be instituted. It provides for a period of 2 months within which an action must be brought after the commission of the act. The legal effect of this provision is that any action brought after the limitation period will not be sustainable in a court of law. This provision is an exception to the general rule that there is no time limit for the institution of criminal actions. Arguably, the purpose of this provision as to limitation might be to ensure that there is still reliable evidence linking an accused to the crime, however, this could be exploited by unscrupulous suspects or prosecutors who simply need to ensure that prosecution is delayed by every “legal” means available until expiry of the period limited, in order to enable suspects walk away free and prowl around town for their next victim.

Section 221 of the Criminal Code provides that anyone who has or attempts to have carnal knowledge of a girl above the age of thirteen and under the age of sixteen or a woman or girl of unsound mind is guilty of a misdemeanor and liable to imprisonment of 2 years with or without caning. This provision regards such acts as a misdemeanor as opposed to rape which it regards as a felony. It also prescribes a lesser offence for the commission of same as opposed to that of rape which is met with a punishment of life imprisonment. The section goes further to provide that the accused may rely on the defence that he believed on reasonable grounds that the girl was of or above the age of 16 years. This provision is further qualified by Section 222(c)[12] which requires that for an accused to rely on this defence he must be below the age of 21 years and had not been previously charged with such offence. Just like Section 218 of the Criminal Code, it insists that such actions be instituted within 2 months.

Also, the issue of marital rape is not envisaged or even covered by Nigerian Law. Interestingly, the two dominant laws on sexual offences intentionally exclude marital rape from their definition of rape[13].This is not the case in other jurisdictions such as  the States in US which have criminalized marital rape since the 1990s; reason being that, whether within marriage or outside it, sex is and should always be consensual. Also, African Countries like Angola, Cameroon, Gabon and Ghana have since adopted laws that condemn and criminalize marital rape. The reluctance to criminalize this offence in Nigeria has been attributed to her traditional views of marriage, interpretations of religious doctrines and ideas about male and female sexuality. It is, thus, not difficult to appreciate why acts of sexual violence between spouses tend to be accommodated/tolerated in Nigeria, ostensibly, on the foundational belief that marriage constitutes an act of permanent consent. Sexual violence between spouses tends to be worse in cases of child marriages, where the children are forcefully and sexually abused under the guise of the marriage institution. For instance, a case was recently reported of a minor who stabbed her husband to death for forcefully attempting to rape her without her consent.[14]

Another area in which the law has proven to be inadequate is the lack of convergence on the legally accepted age of consent. The Child Right’s Act prescribes 18 years as the age of consent and declares any act of sexual intercourse with any person below that age as unlawful and a criminal offence.[15] However, not all states have domesticated that law; in fact, about 12 Nigerian states, most of which are located in the Northern part of the Country, are yet to domesticate the same. The Penal Code prescribes 14 years as the age of consent as it provides that a child below the age of 14 is incapable of giving consent.[16] The Criminal Code has no specific provision on the age of consent, however, one could assume from the tenor of the Act that a person below the age of 13 is regarded as a child. There is need for harmonization of the age of consent for this purpose and for same to be operational throughout the country. This author proposes that the age of consent be no lower than 18 years, as a veritable tool for controlling sexual offenses against children, especially in cases of statutory rape.

The enactment of the Violence against Persons (Prohibition) Act, 2015, (VAPP Act) has helped to widen the scope and frontiers of sexual offences. For instance, it defines rape as the intentional penetration of the vagina, anus or mouth of another person with any part of his or her body or anything else.[17] By this definition, the victims of the offences of rape and defilement are no longer restricted to females but may now include males as it should be. It also recognizes the fact that any intentional penetration of the anus and mouth and not just the vagina constitutes rape. It goes further to introduce the establishment and operation of a register for convicted sexual offenders which is to be made accessible to members of the public. The provisions of this Act shall also supersede any other provisions on similar offences in the Criminal Code, Penal Code, and Criminal Procedure Code.[18] While this is an interesting introduction into our jurisprudence for name and shame purposes, it should be noted that this Act only applies to the Federal Capital Territory, Abuja and, by extension, only the High Court of the Federal Capital Territory has jurisdiction to hear and grant any application under this Act.[19]To their credit, similar laws have been enacted in some other states like Anambra, Ebonyi and Oyo while states like Ekiti[20] and Lagos State[21] already had pre-existing similar laws. It is recommended that other states of the Federation consider domesticating these principles by incorporating them in existing laws or enacting altogether new but similar legislations.

The Criminal Code, Child Rights Act and the Violence against Persons (Prohibition) Act provide for life imprisonment as the punishment for the offence of rape[22]. For the offence of defilement of a child, the Criminal code prescribes punishment of 14 years imprisonment. However, our courts tend to be reluctant to impose this punishment on offenders and instead opt for a reduced sentence. For instance, in Boniface Adonike v. The State[23], the Appellant was convicted and sentenced to six years imprisonment with six strokes of the cane for the offence of defilement of a five- year old child even though the law upon which the Appellant was charged prescribed life imprisonment for commission of the offence[24]. Similarly, in the cases of Afor Lucky v. The State, Segun v. The State[25] and Oludotun Ogunbayo v. The State (Supra); reduced sentences were imposed. This attitude of the courts being sympathetic to the culprits rather than the victims does not serve as sufficient deterrent to would-be rapists, especially, considering how condemnable and barbaric such acts are. For many victims and survivors, they may neither obtain a sense of closure nor be able to heal psychologically, in the knowledge that their assailants only received a smack on the wrists as retribution.  Our courts should be required to impose the full punishment prescribed by law as a means of signaling the strong sense of abhorrence her society feels towards such conduct.

Yet another factor contributing to this state of affairs is the unduly protracted nature of criminal proceedings in our courts and the dispute resolution mechanisms available in the land. Records show that there had been only about 65 rape convictions reported in the various law reports on sexual offences from 1973 to 2019[26]. Also, that although 283 cases of defilement were reported in Lagos in 2011, only 10 were prosecuted and convicted.[27]

It is instructive to note that, typically, prosecutors find it difficult to successfully prove rape during criminal trials. This difficulty could be traced to the usually private nature of the offence and the stealth involved in consummation of the crime.  Even in cases where there are witnesses to the offence, such victims are still required to prove that penetration occurred, which is no easy task. In cases where there are no witnesses or absence of medical evidence of penetration, it then revolves around the probative value that a court of law accords the evidence provided by a victim as against that of an accused person. In order to facilitate less cumbersome proof of the offences under consideration and to discharge the burden imposed by law, the following factors must be taken into consideration:

 

4.1       Medical examination

Victims of rape and other acts of sexual violence are encouraged to undergo medical examination immediately after the act. A medical examination will involve a simple examination of the victim by a medical practitioner to confirm the fact that indeed there was penetration or other assault of any kind. This examination is usually followed by a medical report which will be tendered in court to prove the offence. This is important because it provides evidence that the victim had been abused and states in details the extent of the abuse. The provision of a medical report provides evidence that establishes one of the most essential ingredients of a sexual offence, which is the fact that sexual intercourse occurred. This evidence must be definitive in its description of the offence as the court may be reluctant to grant a conviction where a medical report is ambiguous or vague in details.

It is important to state here that the ability to produce a medical report does not in itself provide irrefutable proof of rape; as with other evidence, same must be proved beyond reasonable doubt before a court of law. The medical practitioner who prepared the report would be called upon to give evidence and be cross-examined on it. Where it is, however, proved to be genuine, the same would constitute good and credible evidence upon which the courts may convict, especially, when it fits into the timeline of events. The procurement of DNA evidence from the victim during medical examination in cases of rape and defilement can, however, create irrefutable evidence that the offence was, indeed, committed by a Defendant where the DNA obtained from the victim is found to match that of the Defendant.

 

4.2       Statement to the Police.

Victims of the offence are also encouraged to file a statement with the Police immediately after the offence is committed. This statement is a narration of the details of the offence which will then be signed and dated by the victim as well as the Investigative Police Officer (IPO). Also, after a crime is reported, the IPO is expected to conduct an investigation by visiting the scene of the crime and making a report based on his findings. Details such as torn clothes, existence of semen in clothes, noticeable bruises on the victims are to be included in the report and such material evidence would be collected by the Police and kept as evidence pending when they could be tendered in court. This will amount to good and useful evidence that could be relied on by the courts in establishing the offence of rape.

4.3       Any other evidence that corroborates the evidence of the victim.

Corroboration simply means independent evidence tending to support and strengthen other evidence before the court and confirm in some material aspect that the accused committed the offence. Corroboration need not only be the testimony of a witness, it may be in the form of a medical report, testimony of a medical practitioner that examined the victim immediately after the act, a Police report from scene of crime, authentic footage from CCTV cameras or authentic video or audio files (strict compliance with section 84 Evidence Act, 2011) establishing the offence. It should be noted that the absence of the above will not in itself prevent the court from convicting [28](except where the testimony is from a child below the age of 14[29]); rather, its existence could make the courts more inclined to convict an accused.

Where a victim is armed with both a medical and a Police report, both linking the accused to the crime, the same may be deployed in court to prove the offence. Where an action has been instituted, the prosecution must prove beyond reasonable doubt that there was sexual intercourse between the victim and the accused (to prove this, the prosecution must establish that there was penetration), that the act of sexual intercourse was carried out without the consent of the accused person. Where the victim is a child, the prosecution must prove, in addition to the above, that the victim of the offence was a child at the time the offence was committed.[30]

 

  1. Recommendation.

The scourge of rape and defilement in our society isn’t about to go away unless society adopts deliberate steps to understand its socio-cultural causes and what legislative and institutional reforms are required to contain and ultimately reduce it. Assailants, typically, leave their victims physically and emotionally traumatized. Some survivors are scarred for life and become psychological wrecks. Given the criminal nature of the act and the stigmatization associated with survivors, efforts towards finding sustainable solutions would require a multi-dimensional approach. I have considered and hereby propose the following action points for general application across the country.

 

5.1       Sex offenders’ register

This is a register of all convicted sexual offenders in any given country or state as the case may be. This system enables government authorities to monitor and keep track of the activities of sex offenders including those who have completed their sentences. In some jurisdictions, convicted sexual offenders may be required to notify persons living close to or around their residential areas of the fact that they are sex offenders as a means of helping their neighbors be on guard against them.[31] Child sex offenders may be restricted from living in certain residential areas including those in close proximity to schools, day cares and residential areas with a lot of under aged children. In some jurisdictions, sex offenders may be restricted from using the internet freely and from joining certain social media platforms. While, in most countries, these registers are usually only accessible by law enforcement agencies, in the United States, the registry is open and accessible to the public and can be accessed from anywhere in the world as the details are uploaded online.[32] Nigeria does not have any standard sex offender registry. In fact, the only law that makes reference to the operation of a sex offender registry is the VAPP Act, which is not enforceable in all states of the Federation and even the states where it is applicable are yet to fully domesticate and operationalize same. It is hoped that the introduction of “naming” and “shaming” of sex offenders, which a sex register affords society, will help redefine the unhelpful narratives about rape victims and discourage persons with such proclivities from actually consummating such offences. A paradigm shift from victim-shaming to offender-shaming will help raise societal consciousness about the debilitating and multiplier effects of rape on victims, their families and the communities they live in.

5.2       Public Education and Enlightenment

There is need for a comprehensive sensitization program to be undertaken through both the print and electronic media, digital channels and the organization of seminars, workshops and campaigns in schools, churches, mosques and other religious gatherings, hospitals, social and cultural clubs and groups, to educate society about the major fallacies relating to sexual related issues and how they can be properly addressed. These would help change the negative narratives about sex and educate people on acceptable sexual behaviors within our communities. Also, sex education for children and adults in order to inform them of their rights and limits on sexual related issues should be encouraged. Parents should also pay closer attention to children and teach them the accurate names of private body parts as this will empower them to understand their bodies, ask questions and report any behavior that could lead to sexual abuse.

 

5.3       Reform of existing laws relating to rape

There is a case to be made out for reform and amendment of existing laws on sexual offences so as to provide wider and better protection for victims of gender-based sexual violence. With respect to child-related sexual offences, it is important to raise the ante pursuant to ensuring that children are protected from this scourge and persons with such predispositions are deterred from actualizing their aims. It bears reiteration that the laws protecting children in Nigeria are either not fully operational or not properly enforced in the states where they have been enacted. Also, there should be stiffer and more severe punishment for the abuse of children as opposed to the usual slap on the wrists that offenders receive. Existing laws like the Child Rights Act and the Violence against persons (Prohibition) Act, should be operational in all states in Nigeria. It would help if the security architecture in the country is revisited with a view to improving the level of security and quality of life that citizens are entitled to take for granted under the social contract principle.

5.4       Support from Counselling and Rehabilitation Centres

Dealing with the aftermath of sexual violence is critical to the process of healing, rehabilitation and reintegration into society of survivors. There are organizations dedicated to providing the necessary assistance to victims. Victims of sexual offences are encouraged to get help from centers and organizations dedicated to providing multi-dimensional and multi-level assistance and support services ranging from provision of access to forensic medical assistance, pro bono legal aid as well as rendering of professional counselling services to victims. These organizations also try to encourage victims of rape to speak up so that the perpetrators can be brought to justice, named and shamed. Some organizations and centers include the Mirabel Centre[33], Women at Risk International Foundation (WARIF)[34] and Sexual Offences Awareness & Response Initiative (SOAR)[35].

Other non-governmental and non-profit organizations are encouraged to throw their weight behind the movement to stamp out, or at least, significantly reduce the menace of rape and defilement in our society. Where innocent persons have been brutalized by sexual predators, it is important for society to continue to enlarge the support system available for healing and rehabilitation. The alternative is to grow an increasing pool of bitter, rebellious and anti-social victims waiting to unleash vengeance on a society perceived to be unfeeling, uncaring and aloof. This is a “community” that society can ill-afford to breed. The time to act is now and act we must!

 

This article was authored by Ebele Iyayi and Pearl Eriyamremu, both of whom practice at Alliance Law Firm.

 

REFERENCES:

[1] Nigeria Records 717 Rape Cases in Five Months – Official; https://allafrica.com/stories/202006150851.html; accessed 1st July 2020.

[2] https://www.premiumtimesng.com/news/top-news/395296-amidstcovid-19-lockdown-nigeria-sees-increased-sexual-and-gender-violence.html accessed 10th June 2020.

[3] Section 357 Criminal Code Act

[4] Section 6 Criminal Code Act

[5] https://businessday.ng/news/article/actionaid-records-253-cases-of-gender-based-violence-in-bauchi-cross-river-others/ accessed 10th June 2020.

[6] Amidst COVID-19 Lockdown, Nigeria Sees Increased Sexual and Gender Violence; https://pulitzercenter.org/reporting/amidst-covid-19-lockdown-nigeria-sees-increased-sexual-and-gender-violence; accessed 1st July 2020.

[7] The recent cases of Uwa Omozuwa who was raped and killed in a Church, Tina Ezekwe, a 12 year old girl gang raped by 12 men for 2 months, and Barakat Bello, an 18 year old girl who was raped and killed at her home, comes to mind.

[8] See note 6

[9] <https://www.lindaikejisblog.com/2020/6/nigerian-mother-beats-blames-and-calls-her-2-year-old-daughter-an-ashawo-after-being-raped-video.html> accessed 8th June, 2020

[10] Section 357 of the Criminal Code Act, Section 282 Penal Code, Section 218 Criminal Code Act.

[11] Section 30 Criminal Code Act

[12] Criminal Code Act

[13] Section 6 Criminal Code Act, Section 282 Penal Code

[14] http://saharareporters.com/2020/05/22/17-year-old-wife-admits-murdering-husband-bauchi> accessed 31st May, 2020.

[15] Section 31 Child Rights Act.

[16]Section 282(1)(e) Penal Code  Naan Upahar & anor v. The State(2002) LPELR – 5937(CA)

[17] Section 1 Violence against Persons (Prohibition) Act, 2015

[18] Section 45(2) Violence against Persons (Prohibition) Act, 2015

[19] Section 27 Violence against Persons (Prohibition) Act, 2015

[20] Ekiti State Gender-Based Violence Prohibition Law 2011

[21] Lagos State protection against Domestic Violence Law, 2014

[22] Section 358 Criminal Code Act, Section 31 Child Rights Act, Section 1(2) Violence against Persons (Prohibition) Act, 2015

[23] (2015) LPELR- 24281(SC)

[24] Section 218 Criminal Code Law of Delta State

[25] (2016) LPELR – 40541 (SC); (2011) 3 NWLR (Pt. 1382) 96

[26] https://www.icirnigeria.org/fact-check-no-it-isnt-true-nigeria-has-recorded-only-18-convictions-in-rape-cases/> accessed 8th June, 2020

[27] Ibid

[28] Oludotun Ogunbayo v. The State (2007) LPELR – 2323 (SC), where the Supreme Court held that it is not a rule of law that an accused cannot be convicted on the uncorroborated evidence of the prosecutrix.

[29] Section 209 Evidence Act 2011

[30] Chima Ude Oka v. State (2018) LPELR- 43914 (CA) PP 27 -31 paras C-C

[31] https://en.m.wikipedia.org/wiki/Sex_offender-registry accessed 1st July, 2020

[32] Ibid

[33] Located at Lagos State University Teaching Hospital (LASUTH) Ikeja, Lagos Open from 9am – 5pm – Monday – Friday, and 10am – 4pm on weekends & Public Holidays. They can also be reached on these numbers: 07013491769, 01-2957816, 08176275732, 08176275695; and on Twitter: @MirabelCentreNG and Facebook: , website, http://mirabelcentre.org/

[34] https://warifng.org/

[35] https://soar.org.ng/

The National Insurance Commission (NAICOM) Again Postpones & Further Segments Compliance With The Recapitalization Of Insurance Companies In Nigeria – Matters Arising For The Sector

There has been recurring clamour for recapitalisation of the Insurance sector in Nigeria owing to what has been perceived as declining public confidence in the sector’s integrity, ability to honour insurance claims and general state of well-being. In other to arrest this loss of confidence, NAICOM has introduced

There has been recurring clamour for recapitalisation of the Insurance sector in Nigeria owing to what has been perceived as declining public confidence in the sector’s integrity, ability to honour insurance claims and general state of well-being. In other to arrest this loss of confidence, NAICOM has introduced a Tier-Based Minimum Solvency Capital (TBMSC) framework for recapitalization of insurance companies. The TBMSC methodology is a multi-level capitalization structure which proposes proportionate capital requirement designed to support the nature, scale and complexity of the businesses conducted by insurance companies.

Consequently, NAICOM issued a Circular No. NAICOM /DPR/CIR/25/2019 dated May 20, 2019 on the minimum paid-up share capital requirement for insurance and reinsurance companies in Nigeria which, in effect, increased the minimum paid up share capital of both insurance and reinsurance companies (except those of Takaful and Micro-insurance companies) effective May 20, 2019 with respect to new applications for insurance licenses, while existing insurance and reinsurance companies were required to comply no later than June 30, 2020.

 

The table below shows the increased minimum paid up capital requirements vis-a-vis existing limits:

 

S/N CLASS OF BUSINESS EXISTING MINIMUM PAID UP SHARE CAPITAL (₦’BN) REVISED MINIMUM PAID UP CAPITAL  (₦’BN)
1. Life 2.0 8.0
2. General 3.0 10
3. Composite 5.0 18
4. Reinsurance 10. 20

 

Circulars Extending Deadlines

Further to the Circular dated May 20, 2019, NAICOM issued Circular NAICOM/DPR/CIR/25-01/2019 dated July 23, 2019 making clarifications on how existing insurance and reinsurance companies could effectively be recapitalized. The salient directives in the Circular are summarized as follows:

 

  1. The minimum share capital recapitalization can be achieved through any or a combination of-
  1. Existing paid up share capital;
  2. Cash payment for new shares issued;
  3. Retained earnings-capitalization of undistributed profits;
  4. Payments in kind (other than by way of cash) for new shares issued such as properties, Treasury Bills, Bonds which must be converted into cash not later than 3 months to the deadline for recapitalization; and
  5. Share premium.

 

  1. The recapitalization can be achieved through merger and acquisition which shall be concluded not later than 60 days to the deadline for the recapitalization.

 

  1. Escrow account must be opened with the Central Bank of Nigeria for the deposit of cash payment of shares. Thereafter, deposited funds shall be released not later than 30 days after the confirmation and issuance of a new license.

 

  1. Shareholders fund as at the last date of recapitalization of existing insurance/reinsurance companies shall not be less than the minimum paid-up share capital.

 

  1. Statutory deposit in line with the provisions of the Insurance Act 2003 shall be made not later than 30 days to the deadline for the recapitalization.

 

On December 30, 2019, NAICOM issued a further Circular No. NAICOM/DPR/CIR/25-03/2019 which extended the deadline for recapitalization to December 31, 2020 due to the feedback from stakeholders.

Due to the incidence of the Covid-19 Pandemic that has and continues to disrupt economic and financial systems across the globe, including Nigeria, it became necessary for NAICOM to intervene once again, by relaxing the earlier deadline and conditions for recapitalization in the industry. Consequently, by virtue of Circular No. NAICOM/DPR/CIR/25-Q4/2020 issued on June 03 2020, NAICOM has directed the extension of the deadline and segmentation of the recapitalization process into two phases as follows:

 

  1. 50 % of the minimum paid up for insurance and 60 % for reinsurance shall be met by 31st December 2020;

  2. Insurance companies are required to fully comply with the approved minimum paid up capital not later than 31st September 2021.

In summary, insurance companies are now required to comply with a two-phase deadline in pursuit of ramping up their minimum share capital obligations in satisfaction of the recapitalization policy of NAICOM, as shown in the table below:

 

S/N CLASS OF BUSINESS EXISTING MINIMUM PAID UP SHARE CAPITAL (₦’BN) EXPECTED MINIMUM PAID UP CAPITAL BY Dec 31, 2020 (₦’BN) EXPECTED MINIMUM PAID UP CAPITAL BY SEPT 30, 2021 (₦’BN)
1. Life 2.0 4.0 8.0
2. General 3.0 5.0 10.
3 Composite 5.0 9 18
4. Reinsurance 10. 12 20

 

NAICOM has emphasized that insurance companies that fail to comply with the required minimum paid-up capital by the end of 31st December 2020 may be restricted on the scope of businesses they will be allowed to transact. All other terms and conditions contained in the previous circulars on recapitalization have been retained.

We are of the firm view that the decision to revise the recapitalisation conditions and extend the deadline is a well thought out one. Suffice it to reiterate that the Covid-19 pandemic has caused geo-political disruptions and ravaged economies across the globe, such that global economic and financial systems are still developing coping mechanisms to remain afloat. The capacity of businesses, especially those within an already unattractive insurance industry, to raise much required capital has only been made that much more difficult.

 

Conclusion

It bears mentioning that, with some industry players currently carrying negative book values of equity, the prospects of raising/attracting equity capital may prove extremely difficult, even as we note that a number of other stakeholders may have initiated the process of raising the desired additional capital from existing shareholders by means of right issues.

That being said, it would seem that a veritable avenue for helping industry participants ramp up their capital and satisfy the new minimum capitalisation requirements would be to consider the model of mergers, acquisitions and reorganisations. This methodology could help attract increased value generation, maximisation of cost efficiencies and increased market share. Expectedly, the Federal Competition and Consumer Protection Commission (FCCPC) would be required to play an active moderating and stabilizing role in this process in order to minimize the incidence of monopolies, higher cost of insurance products and abuse of dominant position. In creating a level-playing field for all players, the FCCPC would facilitate healthy competition in this space and prioritise consumer protection.

This article has been authored by Rose Adaji (Senior Associate) who practices at Alliance Law Firm        

Distinguishing Intellectual Property Valuation (IPV) From Other Company Assets In Mergers And Acquisitions

With the increasing desire for expansion of businesses and development in the corporate world, companies engage in highly sophisticated corporate restructuring options to remain relevant. The result of this desire has led to the increasing rate of mergers and acquisitions in today’s business trends. In some instances, mergers and…

 

  1. Introduction

With the increasing desire for expansion of businesses and development in the corporate world, companies engage in highly sophisticated corporate restructuring options to remain relevant. The result of this desire has led to the increasing rate of mergers and acquisitions in today’s business trends. In some instances, mergers and acquisitions may occur when an unlisted acquirer obtains the controlling shares of a listed target and may want to continue to operate in the name of the acquired target entity so as to enjoy its listed status and associated goodwill- this transactional approach which is referred to as the Reverse Acquisition in mergers and acquisition parlance. Examples of this nature help to demonstrate how a deep understanding of the corporate assets such as IP and the like could influence decision making around business combinations. Indeed, many organizations often fail to appreciate the commercial value of, and the dangers to their Intellectual Property (IP), even when IP accounts for a high measure of the company’s worth when these corporate restructuring options are being executed.

 

When organizations develop their IP, there is usually this urge to make high returns from their investment despite their minimal resources. And when its objective is not maximized, it could be devastating for the company.[1]

 

A company’s assets may be broadly divided into two categories: Tangible assets – including structures, facilities, financial assets and infrastructure – and Intangible assets – ranging from human assets and knowledge, ideas, brands, goodwill, strategies and other intangible assets. Usually, corporeal assets have constituted a large chunk of company assets and they are considerable in determining the position of the company in the market place. Increasingly, and largely as a consequence of the information technology revolution and the growth of the service economy, companies are realizing that, the goodwill of a company is far more valuable than their physical assets.

 

In Nigeria, the essence of IP in business is insufficiently understood; it is probably under-valued, under-managed or under-exploited.[2]  Worldwide, IP is recognized as a very relevant asset of many of the world’s largest and most influential companies; it is extremely key to market dominance and continuing profitability of leading corporations. It is often a major objective in mergers and acquisitions and knowledgeable companies are increasingly adopting permissible ways to relocate assets to areas where the tax obligation is low. Accounting Standards are not necessarily useful in demonstrating the worth of IP rights and intangible assets (IPRs) in company accounts[3]; however, an international accounting method could be adopted in the valuation of IP where the value of a company’s IP portfolio could be measured separately and independently of its tangible assets.  It is worth mentioning that the dynamic of assets appreciation is changing and a paradigm shift to powerful software and ground-breaking thoughts as the main platform for generating income in most corporations worldwide is becoming commonplace. One crucial way of doing so is by protecting intangible assets within a suitable legal framework and where they meet the standards for intellectual property protection, acquiring and maintaining IP rights.[4]

In developed countries around the world, there is an ever-growing shift towards the knowledge economy, or industries based on innovation and intangible assets. In such a climate, businesses that base their operations on intangible assets and innovation have a higher likelihood of thriving. Intellectual property can help businesses legally protect and capitalize on these inventions. Contrary to popular belief, the number one reason firms acquire intellectual property is not for litigation purposes, but to have legal and transferable proof of ownership to some of their most important intangible assets. Intellectual property valuation can help corporations determine the true value of their businesses and capitalize on assets that they may not have been aware of possessing.[5]

Furthermore, changes in international commercial communities have influenced the expansion of business models where IP is a central element creating value and potential growth. In addition to these changes, international accounting practices place pressure on firms to recognize and value all identifiable intangible assets of a firm as part of a transaction, especially, in mergers and acquisitions.

As a result of these developments, proper valuation of IP, followed by measures to protect that value, have become a key element of the success and dynamism of a modern firm. The importance of intangible capital and its acquisition have accounted for more than half of the increased output in developed economies over the course of the last few decades.[6]

 

  1. Diligence in IP Valuation

Significant due diligence should be undertaken when the fundamentals of a given transaction consist of assets such as trademarks, knowledge and technologies.  The commercial standards of such transactions largely orbit around intellectual property and these could include trademarks, patents, industrial designs and copyrights.

Registered and granted intellectual property rights, such as granted patents, trademark registrations, and copyright registrations, which are acquired by application to intellectual property offices, provide legal evidence of a beneficiary’s ownership over intangible assets as well as give such beneficiary the right to exclude others from use of the rights. This means several things: owners have the means to protect themselves against infringement by competitors; owners can profitably license assets and sell same to others to provide them with rights they would otherwise not have; increase in the gross value of a beneficiary’s business.

The precise monetary worth of intellectual property, however, can be challenging to determine, as there are several factors that determine the value of the intangible assets in question. Registration or grant of an intellectual property right is sometimes a precondition to valuation, especially quantitative valuation, and enables the process of monetizing intangible assets.[7]

Conducting a valuation of intellectual property rights has significant benefits. Assessing the value of your patent, trademark or copyright may simplify the licensing or assignment process, and help you determine the royalty rates that should be paid to you as a result of using your intellectual property assets. Further, ascribing a reasonable valuation to your intellectual property, if not currently accounted for, increases the overall value of your business and provides you with collateral for loans or mortgages.[8]

The valuation of IP is therefore vital in the structure of commercial transactions. Unfortunately, this characteristic is often ignored by companies not knowledgeable in these sorts of deals, resulting in transactions that are either overestimated or underestimated or loss-making.  It is therefore important to scrutinize and assess the worth of the IP during the negotiation process, before the conclusion of a commercial transaction. One of the key factors affecting a company’s success or failure is the degree of value attributed to the exploitation of IP. Management in these organizations clearly need to gain an understanding of the value of their IP rights. This is so because this understanding facilitates a deeper knowledge of the value to be placed on the assets under their management. Markets, institutions and shareholders need to be educated. Abuse can assume many forms ranging from outright sale of an asset, a joint venture or a licensing contract. It is equally important to mention that exploitation and abuse exposes a company to increased risks.[9]

 

  1. IP Valuation Methods

The rule in commercial valuation of intellectual property relates to the fact that the value of an object cannot be estimated in the abstract and all that can be estimated is the value of such object in a particular place, particular time, and in a particular circumstance. More often than not, there could be two or more interested parties, and the valuations proposed could depend upon their circumstances. Failure to take these conditions and those of the owner into account could result in a less-than-satisfactory valuation.[10]

The value of intellectual property could be determined by many factors, but a major principle guiding valuation is how such intellectual property is valued when compared with similar assets in the same industry. When determining the worth of intellectual property, two methods of valuation have traditionally been used: Quantitative and Qualitative methods of valuation.

Quantitative valuation relies on measurable data or numerical information to produce an estimate of the value of your assets. It attempts to answer the question by providing a monetary value or contribution that the intellectual property provides, whether directly to the business or indirectly by increasing the value of other parts of the operation or appeal to investors.

Qualitative methods of valuation attempt to provide a non-monetary estimate of the value of intellectual property by rating it on the basis of its strategic impact, brand loyalty held by consumers, its impact on the company’s future growth, and other intangible metrics that do not rely solely on numbers[11].

There are majorly three major methods for IP valuation using the quantitative method: The Market Approach, the Cost Approach which is based on estimates of future economic benefits, and the Income Approach:

 

3.1       Quantitative Methods

3.1.1    Market Approach: The market approach is based on paid prices as a pointer for the value of an asset. The fundamental principle is that under certain conditions supply and demand lead to equilibrium in competitive markets. This approach encompasses the direct market value method and analogy method. The direct market value method seeks to use directly regarded transaction amounts for the subject asset. This method requires an energetic marketplace for the good, which means that the operated assets have to be same, willing purchasers and vendors can be found at any time and prices are widely known while the analogy method is when appraisers try to find transactions with comparable assets and transfer the paid prices to the valuation object. When comparable transactions are found, a common denominator or index has to be found in order to compute a multiplier for transferring the regarded prices to the valuation object[12].

 

3.1.2    Cost Approach

The cost approach seeks to ration the worth of a good by measuring the cost for the substitution of the asset by another. The basic supposition of this approach is that the cost to build or buy new possessions equals the value of its ownership. In this approach, it is basically composed of the reproduction cost and replacement cost methods. The reproduction cost method uses the cost of an exact imitation, while the replacement cost method guesstimates the cost of the manufacture or acquisition of a good with a corresponding benefit. This means the asset must have the same efficacy but may be quite different in method and appearance. Because of the uniqueness of intellectual property an exact imitation normally cannot be formed. So, when using a cost approach, it is more fitting to use replacement costs in this context[13]. Basically, what this means is the amount used in purchasing an IP asset should outweigh the cost of generating and using the same asset as both should be of equal value but not significantly much. This “cost to create” or “cost to replace” method disregards changes in the period value of money, upkeep and has very little to extol itself other than effortlessness of use.

 

3.1.3    Income Approach

Within the income approach diverse methods can be distinguished according to the way of determining the income flow: Direct Cash Flow Method, Relief from Royalty Method, Multi-period Excess Earnings Method, and Incremental Cash Flow Method.

The direct cash flow method uses the cash flows that are directly attributable to the subject asset. A condition for this is that the cash flows can be measured directly. This will especially be the case if the technology is not used in production processes by the owner himself but is made available to third parties by licensing. The license fees can be used directly as cash flows in the valuation calculation.

The idea of the relief from royalty method is that the income resulting from the ownership of the IP can be measured by the saved license fees, which would have to be paid, if the property would be licensed from another owner. The method requires that licensing agreements for similar assets can be monitored and transmitted.

The multi-period excess earnings method tries to isolate the cash flows attributable to the IP by deducting fictive fees (contributory asset charges) for all other assets from the entire cash flow of the unit. Those charges can be seen as rent or leasing fees for the use of those assets. So, the multi-period excess earnings method uses the opposite way of the relief from royalty method.

The incremental cash flow method seeks to value the benefit of IP by comparing the income of the considered unit with the property to a situation without it. The difference between the cash flows for each period in the two situations shows the additional cash flow that is attributable to the asset being valued[14].

The essence of the income approach is that it takes cognizance of the profits and economic value the remainder of the IP will generate after purchase.

There exist other less commonly used methods of quantitative valuation that often encompass elements of the larger umbrella methods described above but may focus on obtaining specific metrics. Such methods include the brand value equation method, liquidation value and income differential analysis. Depending on the purpose of prospective IP valuation, one or more of these methods may be helpful.

 

3.2       Qualitative Methods

3.2.1    Rating/scoring

To arrive at a definitive score in terms of valuation of IP, there are certain methods that one could adopt to achieve it. Most methods measure strategy, technological advancement and brand strength, as well as evaluating the risks and opportunities that are involved with the asset. The rating system can also be used for IP asset classification, as used in the Prism method, determining the type of function IP plays for the company and assigning a strategy based on the determination made.

3.2.2    Value indicators-based Method

It includes rating methods such as IP Quotient (IPQ), which primarily rates patents based on the strength of the portfolio and the variables that affect patents. This allows for internal comparisons to be drawn based on indicators.

3.2.3    Competitive advantage Method

It assesses the competitive advantage that is brought by intellectual property by comparing it to other non-branded companies in the market. It evaluates intellectual property on several characteristics (often a mix of qualitative and quantitative elements) to determine the brand’s performance and strength.

Because of their largely non-monetary nature, qualitative methods are often used for internal and/or strategic purposes. They can be used to understand the profitability of an IP portfolio and evaluate opportunities and risks, and to develop an overall strategy for businesses. Qualitative methods often tend to be based on common-sense indicators as well, making them viable for presentations to non-expert audiences and audiences without a strong financial grasp on the complicated quantitative measures that yield valuation metrics.[15]

 

3.3       IP Valuation in action

A useful illustration on the value of IP valuation may suffice here. Facebook’s billion-dollar acquisition of Instagram speaks volumes for the tremendous value attached to social media platforms. The fact that the social media giant would put forward such a large sum of money for a company (and a product) that generates no revenue (Instagram is free) is mesmerizing. This is even more so when one considers that Facebook acquired all of Instagram’s user base, instantly made inroads into the iOS and Android markets and has extended its own capabilities from merely being a social media network to a network that now facilitates the creation and sharing of unique user-generated content.

Before the purchase of Instagram, the projected value of the company was being rumored to range between $100 million to $500 million. Nevertheless, it was finally purchased at $1 billion. The rising valuation of the company was representative of the growing audience it had been garnering. It reached nearly 30 million registered users before it launched an Android app, a transformational event for the company. The summary is that Facebook purchased the entire essence of Instagram culminating into its IP valuation. The reason for the purchase is not the subject of this article, but the value attached to the brand known as Instagram is noteworthy here.[16] It is relevant to consider what approach Facebook adopted in this epoch-making merger. It would seem that it took the cost and income approach to arrive at its valuation. In adopting the cost approach, Facebook realized that the cost to acquire an IP asset in Instagram was far less significant in value than the cost of developing a new photo-sharing platform. In fact, the database and goodwill of Instagram will probably be more than that of creating a new platform. 

Bringing this home to Nigeria, in 2018, another event which emphasized the importance of IP valuation was the horizontal merger between Yudala – the acquirer, and Konga – the target (both online retailing firms), after which both companies became one entity, operating under the Konga brand name. Before the merger, Konga was Nigeria’s second largest online mall, second only to Jumia. Yudala was also a strong online and offline retail business with an expansive network of fully stocked offline stores. Together, they have become Africa’s largest online e-commerce business. The two companies in the above example; Konga and Yudala, are businesses whose existence revolve around the utilization of their IP assets. The acquisition of Konga by Yudala was unique, in that, the acquirer changed its brand name to that of target because of the inherent IP value of the target.[17] Prior to the merger, it was perceived that Yudala’s agenda was essentially to utilize Konga’s trademark which, Yudala believed it could effectively leverage to boost her brick-and-mortar retail business model. What approach did Yudala latch on in achieving this merger? Considering that this was a novel merger in the e-commerce sector in Nigeria, the market approach to the acquisition of Konga may not have been significantly considered. The overwhelming approaches may have been the Income and Cost approach as Facebook did. In fact, there was an argument that buyers outside Lagos would be more comfortable visiting a Konga shop than a Yudala shop.

The pivotal analysis is that Yudala acquired Konga to leverage its trademark and technology in a bid to make Yudala go online, and to expand its offline stores. “In the end, trademark and technology were the targets in the acquisition.[18]

Furthermore, recent developments in the Nigerian banking sector have further underscored the value of branding and IP rights. In the recent ‘friendly merger’ of Access Bank (the acquirer) and Diamond Bank (the acquired) on April 1, 2019[19], the name ‘Access’ was retained while the re-branded logo of the acquired was retained. Indeed, Access Bank completely purchased the assets of Diamond Bank. However, the merger demonstrated how much value is attached to brands; Access Bank took into account that immense value and then opted to retain an essential IP asset of the acquired- the Diamond i.e. her bank logo. It is fair to deduce that Access bank attached strong weight to the value that the Diamond Bank brand would bring to the table in reaching the decision it did. Practically, Access Bank took the avenue of appreciating the market cost and the income cost of the IP in Diamond bank’s logo.

When assessing the value of an intellectual property, it is essential to first conduct due diligence to determine:

  • the existence, validity and enforceability of the IP rights;
  • the territorial scope covered by the IP rights;
  • the competitive scope of the IP rights by analyzing the scope of the granted claims;
  • the risk of invalidation of the granted IP rights;
  • whether the IP right is subject to a security interest in favor of a third party;
  • whether the IP rights have been assigned and/or licensed to others;
  • whether there is any issue with the ownership of the IP through an analysis of the chain of title;
  • whether the IP rights are being litigated; and whether the rights would rely on third parties’ intellectual property rights in order to mature to commercially viable products.[20]

 

  1. Conclusion

We have examined critically, the different methods of undertaking IP assets valuation and the essence of their valuation. We have learnt that brand owners need to be more commercially aware of what their brand valuation could be worth. We also understand that the primary rule of commercial valuation is to the effect that the worth of assets cannot be quantified in the abstract and all that can be quantified is the value of an asset in a particular place, at a particular time, and in particular circumstances. It is strongly advised that entities that have the intention of valuing their IP should endeavor to use any of the quantitative approaches to achieve such valuation, and while embarking on this, professionals should be employed to do so observing the highest ethical standards and international best practice.

It is also recommended that brand owners should understand the importance of taking steps to protect their brands according to the laws of the land. This is important because, where brands are not adequately protected their owners may not be able to fully exploit the commercial value of the brand regardless of the method of valuation deployed.

 

This article was authored by Blessing Ajunwo-Choko and Doyin Fadare, both of whom practice at Alliance Law Firm.

 

 

REFERENCES:

[1]https://www.wipo.int/export/sites/www/meetings/en/2005/smes_qtc/presentations/wipo_smes_qtc_05_
king.pdf
   Accessed March 27, 2019

[2]https://www.wipo.int/export/sites/www/meetings/en/2005/smes_qtc/presentations/wipo_smes_qtc_05_
king.pdf
   Accessed March 27, 2019

[3]Ibid

[4]https://www.wipo.int/sme/en/ip_business/ip_asset/business_assets.htm accessed on March 27, 2019

[5]https://www.heerlaw.com/determining-value-intellectual-property accessed on January 28, 2020

[6] https://www.marsh.com/us/insights/research/importance-of-intellectual-property.html accessed on March 27, 2019

[7] https://www.heerlaw.com/monetizing-intellectual-property accessed on February 4, 2020

[8] ibid

[9] Ibid (1)

[10] Ibid

[11] Ibid (5)

[12]Valuation of Intellectual Property: A Review of Approaches and Methodshttps://pdfs.semanticscholar.org/a9e2/a7a4377ae882031424f3e81c6c2b5a92c257.pdf accessed on April 1, 2019

[13] Ibid

[14] Ibid

[15] Ibid (5)

[16] https://gigaom.com/2012/04/09/here-is-why-did-facebook-bought-instagram/ accessed on March 27, 2019

[17]http://www.jacksonettiandedu.com/wp-content/uploads/2018/10/ip-valuation-as-a-value-enhancement-1.pdf accessed on March 27, 2019

[18] Peter Oluka, Examining Konga-Yudala Merger https://techeconomy.ng/2018/04/23/examining-konga-yudala-merger/ accessed on March 27, 2019

[19] https://www.pmnewsnigeria.com/2019/04/01/merger-with-diamond-bank-access-launches-new-brand-logo/ accessed April 1, 2019

[20] https://www.tamimi.com/law-update-articles/intellectual-property-valuation-a-must-in-commercial-transactions/ accessed on March 27, 2019

FCCPC Issues Guidelines on Simplified Process For Foreign-To-Foreign Mergers With Nigerian Component

On 13 November 2019, the Nigerian Federal Competition and Consumer Protection Commission (FCCPC) published Guidelines on the Simplified Process for Foreign to Foreign Mergers with Nigerian Component (Guidelines). Prior to the assent to the Federal Competition and Consumer Protection Act (“FCCPA”) on 5th of February 2019, Merger and acq …

 

On 13 November 2019, the Nigerian Federal Competition and Consumer Protection Commission (FCCPC) published Guidelines on the Simplified Process for Foreign to Foreign Mergers with Nigerian Component (Guidelines).

 

Prior to the assent to the Federal Competition and Consumer Protection Act (“FCCPA”) on 5th of February 2019, Merger and acquisition was regulated by the Securities and Exchange Commission (SEC) pursuant to sections 117 – 130 of the Investments and Securities Act, 2007 (ISA). However, with the enactment of the FCCPA, mergers and acquisitiions are now regulated by the provisions of the FCCPA which provide for the establishment of the Federal Competition and Protection Commission (FCCPC) which is now saddled with the responsibility of reviewing all mergers and business combinations in order to ensure that they do not impede or distort the market.

 

The Securities and Exchange Commission (SEC) and Federal Competition and Consumer Protection Commission (FCCPC) recently issued joint guidance on submission of notifications for proposed mergers, acquisitions and other business combination notifications.

 

The FCCPA mandated FCCPC (to the exclusion of SEC) to set, publish and gazette thresholds applicable to all mergers and combinations, regardless of the size of the transaction i.e. whether large, medium or small. This new responsibility of FCCPC does not however abrogate the powers of SEC to regulate transactions involving public companies. The role of the Commission in relation to Mergers will now be in the exercise of its primary function as the regulator of the capital market. The regulatory purview of the Commission will be restricted to mergers and acquisitions by or involving public companies as well as transactions involving a change of shareholding of capital market operators. The review and approval by the Commission on mergers will be restricted to the objective captured in Section 121(1) (d) of the Investments and Securities Act, which is to ‘determine whether all shareholders are fairly, equitably and similarly treated and given sufficient information regarding the merger’ as well as other statutory mandates of the Commission. The Federal Competition and Consumer Protection Commission on the other hand will consider the anti-competitive effects of a transaction in a relevant market. It should be noted that the provisions and application of Sections 131-151 of the Investments and Securities Act, 2007 remain unaffected by the enactment of the Federal Competition and Consumer Protection Act. Consequently, the Commission will continue to enforce compliance with the takeover provisions and monitor acquisition of shares of public companies.

 

In a bid to address the issues emanating from the transition from SEC to FCCPC regime, SEC and FCCPC issued the Guidance to ensure seamless and continuous commercial transactions and market operations. Based on the Guidance, which became effective on 3 May 2019 (and is applicable until further notice/directive):

  • All pending notifications awaiting review by SEC will now be jointly reviewed by SEC and FCCPC.
  • All subsequent notifications/requests for approval are to be filed at FCCPC’s office in Abuja or with the SEC/FCCPC interim review desk office in Lagos or Abuja.
  • All applicable fees are to be paid to FCCPC.
  • Every complete application filed with SEC prior to the effective date of the Federal Competition and Consumer Protection Act and for which appropriate processing fees had been paid would be continued and completed.

 

The joint advisory provides some clarity on how companies should proceed in respect of current or potential transactions. This interim structure is not expected to extend indefinitely as the FCCPC is likely to issue more robust guidelines for the entire process. The FCCPA already includes some salient distinctions on the scope of mergers which is different from what was provided under the ISA and also gives the FCCPC powers to set thresholds for mergers. Companies are keen to see how the FCCPC will address such issues, but until then, the procedure remains largely the same.

 

In furtherance of its mandate, the FCCPA recently issued a guideline on the Simplified Process for Foreign to Foreign Mergers with Nigerian Component. The Guidelines, which is divided into nine (9) parts constitute a merger notification ‘form’ specifically for foreign-to-foreign mergers, indicating, among others, the type of information required regarding the merging parties, and mandatory supporting documentation to be provided and the applicable fees.

 

From all indications, taking a cue from other African jurisdictions, it seems these Guidelines are the first of their kind in Africa providing specific rules for (i) the treatment and notification of foreign-to-foreign mergers and (ii) outlining a simplified procedure for foreign-to-foreign mergers process in Nigeria.

 

Under the Guidelines,  FCCPC undertakes to review foreign-to-foreign mergers under the simplified procedure within 15 business days, subject to the payment of an additional fee of NGN 5 million (approx. USD 13 800). However, the Guidelines is silent on the applicable number of days the review will take place should an applicant pay the normal fee provided in the Guidelines.

Under the Guidelines, the filing fees for foreign-to-foreign mergers are as follows:

 

Threshold Filing fees
Merger with combined turnover of NGN 1 billion (approx. USD 1.4 million) or more (where turnover refers to domestic turnover of the merging parties) The higher of:
• NGN 3 million (approx. USD 8 300); or
• 0.1% of the combined turnover
Merger where target undertaking has turnover of between NGN 500 million and NGN 1 billion (i.e. between approx. USD 1.4 million and USD 2.8 million) NGN 2 million (approx. USD 5 500)
For a foreign-to-foreign merger to be reviewed under the simplified procedure (i.e. within 15 business days) An additional NGN 5 million (approx. USD 13 800) is payable

 

The above filing fees must be interpreted in the context of the merger thresholds published in Government Notice 85 of 2019 which, essentially, provide that a merger is notifiable where the parties’ combined annual turnover in Nigeria in the preceding financial year is more than NGN 1 billion (approx. USD 2.8 million), or where the target’s annual turnover in Nigeria in the preceding financial year is more than NGN 500 million (approx. USD 1.4 million). The above filing fees are only applicable to foreign-to-foreign mergers. Another Guideline may be issued for merger threshold within Nigeria affecting Nigerian entities but for now, the merger threshold issued by the SEC prior to the enactment of the FCCPA is still operational.

 

A link to the Guideline can be found here:

 

http://fccpc.gov.ng/guidelines/mergers/

Highlights Of Discrimination Against Persons With Disabilities (Prohibition) Act 2019

In the light of what appears to be a lack of appreciation for the rights of persons with disabilities within Nigeria, the imperative of having a special piece of legislation completely dedicated to addressing their rights had become long overdue. President Muhammadu Buhari (GCON) recently signed into law …

 

INTRODUCTION

In the light of what appears to be a lack of appreciation for the rights of persons with disabilities within Nigeria, the imperative of having a special piece of legislation completely dedicated to addressing their rights had become long overdue.

President Muhammadu Buhari (GCON) recently signed into law, the Discrimination Against Persons With Disabilities (Prohibition) Act 2019 (hereinafter referred to as “the Act”) with the principal objectives of achieving full integration of persons with disabilities into the society and establishing a National Commission for persons with disability to cater for their socio-economic rights.

The Act generally reaffirms the equal status that persons with disabilities enjoy with persons without disabilities under the laws of the land and proceeds to create mandatory provisions for preserving that equality and ensuring that they benefit from a level playing field as far as is possible. With the rights of persons with disability being reinforced in this way, any form of discrimination against them is strictly prohibited and attracts sanctions under the Act. We now attempt to highlight some of the more significant provisions of this landmark legislation.

 

 

SCOPE OF APPLICATION OF THE ACT

The Act is applicable to the whole Federation without any exception.

 

 

MAJOR PROVISIONS OF THE ACT

 

  • Prohibition of discrimination

The Act prohibits any form of discrimination against any person on the grounds of disability and imposes penalties for breaches. For instance, where a body corporate discriminates against a person with disability, such a body corporate is liable to a fine of N1,000,000 (One million Naira) and, in the case of an individual, a fine of N100,000 (Hundred thousand Naira) or imprisonment of 6 months or both. This is without prejudice to the rights of the aggrieved person instituting a civil cause of action against the offender regardless of whether the criminal prosecution resulted in a conviction or acquittal.

In order to sensitize the general public about the value of persons with disability to society, the Federal Ministry of Information has been mandated to undertake public awareness programmes to inform the public about their rights, dignity, capability and achievements. See sections 1 and 2 of the Act.

 

  • Accessibility of physical structures

Pursuant to sections 3 to 6 of the Act, persons with disability should be afforded lifts, ramps and other accessibility aids to enable access to all physical structures on an equal basis with others; similar access must be afforded in public buildings and road side walks. All planning approvals should have due regard to the needs of persons with disability including those with wheel chairs. A period of 5 years from the coming into effect of the legislation has been afforded already existing public buildings and structures which were formerly inaccessible to ensure that their buildings were accessible going forward.

In similar vein, all seaports, railways and airports are required to make adequate provision to facilitate ease of access by persons with disability, including the provision of functional wheelchairs; ensuring that they are accorded priority on queues and during boarding and dis-embarkment; and effecting the translation of information in a format appropriate to the person with disability present. See sections 13 to 15 of the Act.               

 

  • Socio-economic rights

The right to free, inclusive and appropriate education and liberty for persons with disability is guaranteed under the Act. These rights contemplate inter alia that such persons are prohibited from being deployed for collection of arms; free education to secondary school level, provision of educational assistive devices, incorporation of braille, sign language and other skills in the curriculum of primary, secondary and tertiary institutions and subsidized education for special education personnel. See sections 17 to 20 of the Act.

With respect to healthcare, the Act prescribes free treatment for all persons with mental disability in all public institutions. Pursuant to enjoying these rights and privileges in full, it is advised that such a mentally disabled person should obtain a permanent certificate of disability under section 22 of the Act.  The conditions for procuring such a certificate comprise evidence of mental disability and a recommendation by a doctor to that effect. Where mental illness arises during the course of treatment, a term of 180 days must elapse after the issuance of a temporary certificate of disability.

However, where a permanent certificate of disability is unlawfully issued or obtained, the offender is liable upon conviction to a fine of N200,000 (two hundred thousand Naira) or a term of imprisonment of 1 year or both.

  

  • Opportunity for Employment and Politics

The Act provides that a person with disabilities shall work on an equal basis with every other individual and has the right to an opportunity to gain a living by work freely chosen or accepted in the labour market and work environment that is open. See section 28 of the Act.

Furthermore, the Act stipulates that all public organizations are to reserve at least 5 % of employment opportunities for persons with disability. See section 29.

 

  • The National Commission for Persons with Disabilities

The Act establishes the National Commission for Persons with Disabilities as a corporate body with common seal and perpetual succession. Its responsibilities include policy formulation and implementation, public enlightenment, data collection and record-keeping of information regarding persons with disabilities, receipt of complaints from persons with disabilities whose rights have been violated and institution of schemes which promote the welfare of persons with disabilities.

 

 

 CONCLUSION

 

The enactment of the Act is a statement of intent by the National Assembly and the Federal Government that Nigeria has turned a significant corner in the pursuit of establishing a more egalitarian society. Without a doubt, disabled members of our society have been denied a fair chance at competing effectively with others. Their rights have been frequently trampled upon and they have had to climb difficult hurdles just to enjoy rights that are otherwise protected under the Nigerian constitution.

As earlier indicated, the coming into effect of this legislation helps provide additional muscle to the enforcement of rights of persons with disabilities by ensuring specificity and enlargement of their rights. With the establishment of a National Commission, it is hoped that urgent steps would be taken to sensitize Nigerians about the rights of persons with disabilities and the tremendous value they could bring to the task of nation building. We also expect that the various penalties and sanctions embedded in the Act for violations of its provisions would be duly enforced as and when appropriate as we prepare to transit to an environment which nourishes a culture of respect, empathy and value for persons with disabilities.

 CONTRIBUTORS:

ROSE ADAJI

IBIM O. DOKUBO

  

 

 

Legal Framework For Effective Protection Of Computer Software Programs In Nigeria

The steady development of technology and the invention of various computer software and programs are a welcome development for the Nigerian economy because of the opportunities they create for employment and income generation. However, owing to the sensitivity and vulnerability of computer software

 

 

INTRODUCTION

The steady development of technology and the invention of various computer software and programs are a welcome development for the Nigerian economy because of the opportunities they create for employment and income generation. However, owing to the sensitivity and vulnerability of computer software as an intellectual product, it is highly susceptible to intellectual theft.  In view of this, it has become inevitably necessary to ensure the legal protection of computer software products against intellectual property theft.

 

The software industry is a high-earning sector of the economy in many developed countries of the world as the sector rakes in billions of dollars.  As Information Technology (IT) continues to develop in Nigeria, there has been a constant increase in the rate of computer software piracy. This has resulted in loss of income and resources for IT practitioners and the Nigerian economy as a whole. The Business Software Alliance (BSA)[i] has revealed that, in recent times, a whooping sum of $20 billion is lost annually as a result of the sale and distribution of pirated software in the global market.  This underscores the significance of the issue of computer software piracy globally and why it is imperative to tackle it effectively.

 

In Nigeria, many software developers are yet to realize the significance of software protection and the need to take proactive steps towards securing legal protection for such rights. This has led to serious breaches of their ownership rights in computer software that they worked so hard to develop. This article is aimed at creating awareness about the various means of protecting intellectual property rights of computer software developers from theft and how that protection can be secured under the law.

 

What is Computer Software?

 

Computer Software is defined as a program which enables a computer to perform a specific task, as opposed to the physical components of the system (hardware). The program involves the sending of instructions from the application software, through the system software, to the hardware which ultimately receives the instruction as a machine code.[ii]

 

Computer software is usually protected by the encryption of software codes to such software or legally, by registering the software under the laws governing patents and trademarks. A notice of the development of the software could also be lodged with the Nigerian Copyright Commission or a copyright collecting society in Nigeria for record purpose; as copyright ordinarily vests in the developers without a legal requirement for registration.[iii]

 

Owing to the immense value and significance of computer software to both individuals and corporate organizations, it has become very important to ensure the effective legal protection of computer software as an intellectual property. Globally, software is legally protected and many software developers, programmers and organizations view software as intellectual property to be jealously guarded because of its economic value.  Treating computer software and related products as intellectual property creates an opportunity for firms, organizations and individuals to exercise a reasonable level of control over the use of computer software and how it gets to the public. However, in cases where software is not patented, copyrighted, trademarked or protected by trade secrets or other forms of legal protection, users may exploit the unauthorized use of the software thus resulting in the loss of commercial revenue to their inventors. An even worse scenario could also involve the loss of the right to use the software developed by its true inventor.

 

Concept of Intellectual Property

 

Intellectual Property is a piece of work which emanates from the ingenuity of an individual or corporate organization. It is usually abstract. Examples of intellectual properties are books, poems, songs, movies, computer software, patents, industrial designs but to mention a few.

Suffice it to mention that owners of intellectual property rights are faced with the threat of having their works pirated, imitated or stolen, thus depriving the creators due credit for their creativity, a loss of opportunity to create viable source of income and loss of fulfillment. In many cases, business organizations with valuable intellectual property such as software have to employ adequate strategies to guard against intellectual property theft including from their own employees.

 

Some of the avenues which could be employed in the protection of the intellectual property of a company’s or an individual’s computer software is getting the employees or business associates of the said individual, as the case may be, to sign non-disclosure agreements or restricting employees’ or associates’ access to intellectual property such as a software under development.

 

MODES OF COMPUTER SOFTWARE PROTECTION:

The various means which could be employed to protect software from unauthorized use in Nigeria include copyright, patents, execution of trade secrets /non-disclosure Agreement and trademarks. Some software developers prefer one medium of software protection to the other based on the scope and advantage of the legal protection covered by each. As a software developer, making a decision on which type of software protection to employ is a very critical step in the process of securing adequate protection.

 

Trademarks are another option, but they don’t protect intellectual property software code. What they protect is the name of the software, or a symbol which is used to advertise the software.[iv]  Trade marking your software’s brand name is a good way to keep others from marketing a product under a confusingly similar name to pass off one’s software.

 

 

COPYRIGHTS AS A FORM OF PROTECTION FOR COMPUTER SOFTWARE

A copyright is described as a right granted to the author or originator of certain literary or artistic productions, whereby the creator is granted, for a limited period, the sole and exclusive privilege of multiplying copies of the literary or artistic works and publishing or selling them.  It is a protection which is usually granted to original artistic, computer software programs, literary, musical, cinematographic films, sound recordings, broadcasts and publications. It creates an opportunity for the owner of a creative work or innovation to own the exclusive right to produce, publish, translate, broadcast or adapt such works.

In the Nigerian Legal System, intellectual property protection for computer software can be achieved under copyrights or patents registration. A computer software can be protected under the Copyrights Act of Nigeria.[v]

 

 

PATENTS

There seems to be a variety of opinions as to whether or not computer software is an appropriate subject for a patent grant in Nigeria. It bears noting that while certain inventions may be eligible for patent protection, not all software-related inventions are patentable as they are required to satisfy certain conditions in order to qualify. The Patents & Designs Act CAP P2 LFN 2004 (hereinafter “Patents & Designs Act”) stipulates the conditions for eligibility of a work for patent grant as follows:

 

  1.  It must be a new invention.
  2. It must constitute a non obvious improvement on a previously patented invention.

In either case above, it must be capable of industrial application. [vi] Once the foregoing conditions are established, a work or invention qualifies for a patent grant. An application could then be made to the Registrar of Patents & Designs for the purpose.

In order to protect the function of software, a software developer would require a software patent. A software patent would ensure the protection of elements such as:

 

  1.   Systems 
  2.  Functions 
  3.  Solutions to computer problems


The two kinds of patents available for the protection of software are:

 

  1.   Utility
  2.   Design

Utility ensures the protection of what the software does (application), while the Design protects any decorative part of the computer software.[vii]

 

As opposed to the Copyright Act, the Patents & Design Act ensures the protection of the invention itself. By virtue of same, persons desirous of creating a software program that does the same thing as a computer software does but with a different code are thus prevented from doing so. However, the patent doesn’t protect your specific lines of code against plagiarism the way a copyright does.[viii]

 

The Validity of Computer Software Patent Registration Outside Nigeria:

A Nigerian software patent is only valid in Nigeria. If protection of a patent is sought in other countries, one will necessarily need to make a separate application in each of those countries. This is due to the fact that patent laws vary from country to country and are largely territorial in application.[ix]

 

Differences between patent and copyrights protection in Nigeria:

 The major difference between a patent and a copyright is that, while a patent can protect your computer software program from imitation, software copyrights have a more limited scope and will only guarantee the protection of your software  in situations where an individual copies an actual executable or source code or graphics from your software.

 

 

TRADE SECRETS AS A VIABLE MEDIUM OF PROTECTING COMPUTER SOFTWARE

A trade secret refers to information which is available to an individual or a company and at the same time unavailable to other individuals, businesses or corporate organizations. The utilization of trade secrets in businesses gives the individual or company an edge over its competitors. One does not have to file any documents or apply with any agency to register a trade secret. However, there are reasonable measures to be employed to keep a computer software a trade secret. Some of these measures include:

 

  1. Keeping the software away from the public;
  2. Employees or contract staff in a software development firm must sign non-disclosure agreements;
  3. Ensuring that intellectual property data is stored in compartments, and give access only to employees on a need-to-know basis. 

It is important to note that a trade secret can last for as long as you want.  However, unless someone discovers your secret by what the law construes as “fair means” your trade secret will last forever. In a case where an individual or organization independently discovers a trade secret similar to that of another individual or organization, such individual or organization is entitled to continue its use of same and no legal action will lie against them.

 

Sometimes, companies and individuals do not regard trade secrets as an adequately secure means of guaranteeing the protection of their valuable software inventions. However, an advantage trade secrets have over other legal means of computer software protection is that it extends to other minor things, such as customer lists, which may not easily be protected by copyrights, patents or trademarks. Illustrative of this is a computer software developer who writes a program that predicts UEFA Champions League matches with a 90% accuracy. If the inventor patents his software, after 20 years, everyone would have the opportunity to create, use, and sell similar software. However, if the inventor treats the programs of the software as a trade secret, he or she could ensure effective and adequate control of the source code indefinitely and no individual or organization will figure out how he or she achieved such accuracy.

 

Inventors are encouraged to take adequate steps towards developing and securing a trade secret protection program for computer software programs.  It is necessary for a software developer to maintain confidentiality of the source code in order to ensure the protection of his computer software program from intellectual theft.  A proper protection program will include processes such as drafting confidentially agreements, having password protection, ensuring limited access to source codes, and creating a limit to the number of individuals or organizations with access to such sensitive information.

 

It is important to note that Nigeria is a signatory to an Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). An objective of the TRIPS agreement is to establish a nexus between international trade and intellectual property law. The agreement which is regulated by the World Trade Organization (WTO), stipulates the minimum standards that govern intellectual property issues across the WTO member states.  Article 39 of TRIPS agreement creates a specific provision for the protection of trade secrets.[x]

 

Paid Software Developers and Right to Resulting Copyright

The Copyright Act provides that whoever produces or creates an innovation owns the copyright. However, there are certain exceptions to this rule which include the principle of work for hire.[xi]    Section 10 (1) of the Copyrights Act primarily   provides for ownership of a computer software program to be vested in the independent contractor where he/she created the program.[xii]

However, there are cases where some of the jobs an independent contractor undertakes for a company or an organization may fall under the “work-for-hire” principle. They include:

 

  1. Part of audiovisual work
  2. A translation
  3. Supplementary work
  4. A compilation
  5. A test or test answers
  6. An atlas
  7. A set of directions

In situations such as this, a contract between an independent contractor and the company could be executed to provide for the company to subsequently own the copyright. Another option is for the independent contractor to license his/her/its copyright to the company rather than handing over the copyright.

 

Whether as a business outfit or an independent contractor, it is important and proper to ensure that these details are clearly stipulated before the commencement of such contract. Who owns the copyright of software is of great essence. This is because of the multiple rights that a copyright vests in its owner. For example a copyright over computer software programs empowers the copyright owner. [xiii]

 

  1. To give it away or sell copies; 
  2. To create “derivative works”;
  3. To reproduce it;
  4. To post the code on a website

 

 

CONTRACTS AND LICENSING TO PROTECT SOFTWARE INTELLECTUAL PROPERTY.

 

It is interesting to note that copyrights and patents have restrictions with regards to the protection of computer software. In order to cater for the risks associated with the protection of computer software intellectual property, a lot of individuals/organizations adopt the use of contracts and license agreements.

 

A license allows another party, such as a business entity, to use the software you developed.

 

On the other hand, handing over the copyright, or assigning the copyright, gives the party to whom the copyright is being handed over to legal ownership of your software invention. Regardless of the medium you choose to adopt, your contract needs to be specific, detailed and adequate for the purpose.

 

 

THE RELEVANCE OF LICENSING AS A MEDIUM OF PROTECTING SOFTWARE INTELLECTUAL PROPERTY

 

  1. Licensing in some cases serves as a better alternative to individuals and corporate bodies than the sale of a computer software intellectual property. 
  2. A license ensures the protection of your computer software from persons or individuals that might want to reverse-engineer, copy, or hand it out. 
  3. In a bid to ensure that a license covers all relevant areas, licenses are typically granted via the execution of an agreement.

 

PROTECTING COMPUTER SOFTWARE THROUGH TRADE MARKS

 

Prior to marketing software, it is important for software developers to take adequate steps to create, develop and protect the brand name for the software. A trademark is a mark used or proposed to be used in relation to goods for the purpose of indicating, or so as to indicate, a connection in the course of trade between the goods and some person having the right either as proprietor or as registered user to use the mark whether with our without any indication of the identity of the person, and means, in relation to the certification trade mark, a mark registered or deemed to have been registered under Section 43 of the Trademarks Act. [xiv] Trademarks are used to protect the name of one’s company, product, internet domain names, symbols, logos images, symbols, slogans, colors, product designs and product packaging.

 

Protecting your computer software by trade marking your software name is very crucial especially in cases where your computer software is not secured by other forms of legal protection. For instance, an internet browser may not be patentable or protected by copyright. However, a trademarked brand name can create a perception of the browser by the public as a unique product solely associated with a particular business organization.

 

CONCLUSION:

 

It is hoped that the reader has acquired a deeper insight into the legal framework available in the country for developers, to secure the effective protection of computer software from infringement, which leads to loss of credit and future income.

 

In a world where software technology is thriving in dynamism and creativity, the use of the legal protection is of utmost importance to facilitate the growth of the Nigerian information and communication technology industry and ensure that the remuneration due to developers of computer software in the industry is accruable to them.  

                                                                                                                  

This article was authored by John I. Ibe, Esq. who carries on his legal practice out of Alliance Law Firm.

 

REFERENCES

 

[i] Business Software Alliance is a company which undertakes the provision of programs to enhance copyright protection, cyber security, trade, and e-commerce. It tracks illegal software downloads and distribution of pirated software on the internet through online auction sites. The company provides various forms of protection for software providers’ intellectual property rights, enforces software copyright legislation, and encourages compliance. Its cyberspace policy review dashboard tracks policymakers’ progress in various categories set forth in the administration’s report by providing updates and industry assessments.

 

[ii] Science Daily,
“Computer Software”.https://www.sciencedaily.com/terms/computer software.htm, accessed 11th March 2019.

[iii] Mathew R. Harri, “Copyright, Computer Software and Work Made For Hire” Published by Michigan Law Review. Vol. 89. No 3. Dec 1990 Page 661.

[iv] Arek Dvornechuck, “How To Copyright and Trademark a Logo” ebaqdesign.com. https://ebaqdesign.com/blog/trademark-logo,accessed 13th March 2019.

[v] Section 51 of the Copyrights Act CAP C28 LFN 2004 on the description of literary works to include computer programs states as follows:

 

“literary work” includes irrespective of literary quality, any of the following  works or works similar thereto –

 

  1.   novel, stories and poetical work;
  2.   plays, stage directions, film scenarios and broadcasting scripts;
  3.   chorographic works;
  4.   chorographic works;
  5.   computer programmes
  6.   text-books, treatises, histories, biographies, essays and articles;
  7.   encyclopaedias, dictionaries, directories and anthologies

[vi] Section 1 of the Patents & Designs Act, prescribes the conditions for patentability. It provides as follows: 1 (1) Subject to this section, an invention is patentable (a) if it is new, results from an inventive activity and is capable of industrial application or. (b) if it constitutes an improvement upon a patented invention, and also is new, results from inventive activity, and is capable of industrial application. Three conditions are primarily set by this provision for patentability: 1. The invention is new 2. The invention involves an inventive step 3. The invention must be capable of industrial applicability The secondary provision which is made under section 1(1) (b) is that an invention will still be patentable if it is an improvement on an already patented invention.

[vii] Joe Rung, Esq., “What are The Different Types Of Patents” Legal Zoom.com.: www.legalzoom.com, accessed 28th September 2018.

[viii] Upcounsel website, “Software Patent or Copyright: Everything You Need to Know” upcounsel.com. www.upcounsel.com/software-patent-or-copyright, accessed 8th March 2019.

[ix] Ufoma Akpotaire, “Some Basic Facts about Patents In Nigeria” (Posted on January 6, 2019) Nigerian Law Intellectual Property Watch. www.nlipw.com, accessed 28th September 2018.

[x] Article 39 (1) TRIPS states as follows: “In the course of ensuring effective protection against unfair competition as provided in Article 10 (b) of the Paris Convention (1967), members shall protect undisclosed information in accordance with paragraph 2 and data submitted to governments or governmental agencies in accordance with paragraph 3.”

39 (2) Natural and legal persons shall have the possibility of preventing information lawfully within their control from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest commercial practices  so long as such information: (a) is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question; (b) has commercial value because it is secret; and (c) has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.

39 (3) Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Members shall protect such data against disclosure, except where necessary to protect the public or unless steps are taken to ensure that the data are protected against unfair commercial use.

[xi] FindLaw.com, “Copyright Ownership: The Work Made For Hire Doctrine I”: https://corporate.findlaw.com/intellectual-property/copyright-ownership-the-work-made-for-hire-doctrine, accessed 11th March 2019.

[xii] Section 10 (1) of the Copyrights Act provides that “Where an independent contractor creates a computer software program, the copyright belongs to the independent contractor.”

[xiii] Justia Legal Resources,“Copyright Ownership”, www.justialegal resources.com, accessed 28th February 2019.

[xiv] Section 67 of the Trade Marks Act 1965 with regards to the use of trademarks provides as follows:

 

“A trademark is a mark used or proposed to be used in relation to goods for the purpose of indicating, or so as to indicate, a connection in the course of trade between the goods and some person having the right either as proprietor or as registered user to use the mark whether with our without any indication of the identity of the person, and means, in relation to the certification trade mark, a mark registered or deemed to have been registered under Section 43 of the Trademarks Act.”