Senate moves to ‘strengthen’ operations of NGOs in Nigeria

A bill that seeks to strengthen the operations of Non-Governmental Organisations (NGO) in Nigeria has scaled second reading at the Senate.

The bill, an amendment to the Companies and Allied Matters Act, 2020, is sponsored by Ibrahim Oloriegbe (APC, Kwara Central).

Besides increasing the effectiveness of NGOs in Nigeria, the legislation is also aimed at introducing measures that address regulatory issues relating to registration, administration and merger of such organisations.

One major provisions the bill seeks to amend, is to allow NGOs provide annual returns to the Corporate Affairs Commission (CAC) once in a year, against the current law which mandates NGOs to make such submissions twice in a year.

The second reading was sequel to a deliberation on the details and proposed amendments contained in the bill.

The CAMA Act, one of the most significant legislations passed by the eighth assembly, enhances Nigeria’s business environment and promotes the growth of Micro, Small and Medium Scale Entreprises.

It also guides the registration and administration of companies, business entities and associations.

Debate

Leading the debate, Mr Oloriegbe noted that the current CAMA Act provides a consistent regulatory framework that enhances NGO coordination as well as the legal and legislative framework for how profit-making entities and non-profit should operate in the country.

He, however, said while the law has major benefits for companies by improving the Ease of Doing Business and reducing the burden of compliance for medium and small scale industries, it introduces more stringent regulations for organisations registered as incorporated trustees which includes NGOs, Civil Society Organisations, community and faith-based organisations.

The law contains some provisions that are inimical to the abilities of NGOs to operate and deliver on the purpose for which they are set up, he said.

“NGOs are essentially the creation of individuals and citizens seeking to contribute to social development. We owe it as a responsibility to support these initiative without overlooking the need to assist their operations within the law.

“It is essential to observe that the extant law requires NGOs to provide annual returns to CAC twice in a year when companies are only required to do so only once.

“The law also makes it possible for trustees of NGOs to be removed in unclear circumstances and for interim managers to be appointed without specifying the roles of the interim managers, the extent of thier powers and the duration of their appointment.”

The current law, he added, could also lead to the arbitrary seizure of the assets and properties of an NGO without providing the opportunity for correcting any ills which the law should aim to do.

Objectives and highlights

A major objective of the bill is to provide a consistent regulatory framework that enhances NGO coordination.

The legislation proposes amendments to 11 Clauses of the CAMA Act.

They are: Section 2 which deals with stablishment of governing board, Section 81 which deals with related associations, Section 83 which deals with application of income and Section 839 which deals with suspension of trustees, appointment of interim manager.

Other sections are: 842 which deals with accounts of dissolved incorporated trustees, 843 which deals with accounts which cease to be dormant before transfer, 844 which deals with dormant bank accounts and 845 which deals with annual statement of affairs.

Also to be amended are Sections 846 which deals with accounting records and statement of account, 848 which deals with bi-annual returns and 849 which deals with merger of association – which is amended to give associations with similar objectives, the discretion to merge.

The key proposals are:

* To amend Section 2(2) to provide for the representation of NGO in the membership or governing board of CAC.

* Section 839 to curb the wide power of CAC to suspend trustees and appoint interim managers for NGOs.

* Section 85 to reduce the burden on NGOs to submit bi-annual statement of affairs to CAC as opposed to annually which is the standard requirement for profit-making entities.

* And delete Sections 842, 843 and 844 which border on the status of the bank account of the NGOs. This, the lawmaker said, infringes on the code of confidentiality between banking institutions and their customers.

He added that if passed, the legislation will not only provide an acceptable and more coordinated legal framework for NGO regulation but more significantly strengthen the civil space for Nigeria.

Contributions

In his remark, Sadiq Umar, noted the significance of the bill especially “because of the misunderstanding that surrounds NGO in Nigeria.”

The CAMA Act, he said, needs to be amended to regulate how NGOs operate in Nigeria.

“With this amendment, NGOs doing excellent jobs will be covered and for those with ulterior motives, they can now be properly regulated and controlled.”

After the second reading, the bill was referred to the Joint Committees on Trade and Investment, Diaspora and NGO for public hearing and further legislative actions.

The committee is to report back in four weeks.