Regulatory Framework for Tourism in Nigeria: How can this be made easier for investors?
It is with great pleasure we bring you the 6th edition of Brevis Quarterly Newsletter. Our publications this year have focused on the opportunities for growing the Nigerian economy both by maximising the oil economy and developing other high potential sectors. In this edition, we explore the potentials of the tourism industry which stands as one of the fastest growing economic sector in the world. Tourism has stimulated economic growth and employment in developed and developing countries such as Canada, New Zealand, United Kingdom, Australia, Kenya, Cuba and Srilanka, to mention a few.
This edition of Brevis will examine the regulatory framework for tourism in Nigeria while highlighting some factors that can influence and contribute to the development of the tourism industry.
In addition to our feature article, this edition also contains news updates on notable events which occurred within the quarter and legal humour fitting for the holidays.
We hope you have a good read and extend our sincere wishes for a peaceful festive season and a prosperous 2016.
Nigeria’s fascinating natural landscape and ecosystem, rich culture and history commend it to tourists around the world as an attractive tourist destination. Tourist attractions in Nigeria include the Ikogosi Warm Spring in Ekiti State, the National Museum in Lagos, the Calabar Carnival in Cross River, and the Yankari National Park in Bauchi State, among others. Despite the abundance of natural, recreational and historically significant locations across the country, the tourism industry is yet to make significant contributions to Nigeria’s socio-economic and political development. The World Travel and Tourism Council records that the direct contribution of travel & tourism to Nigeria’s GDP in 2013 was only NGN757.3bn (1.6% of total GDP).
The potential for diversifying any economy through tourism and the need for Nigeria to tap into this sector as one of the means of shifting from heavy dependence on oil resources cannot be overemphasized. Countries conscious of this prospect have judiciously developed their tourism industry in a manner that encourages sustainable growth. Since tourism cuts across other sectors like hospitality and catering services, transportation, travel agencies/airline operators, among others, it has the capacity to stimulate any economy’s income growth, generate foreign exchange and contribute to domestic earnings through fees and taxes.
Although successive governments in Nigeria have made efforts to build a viable tourism industry, the country has not been able to harness its abundant resources into an attractive tourist haven.
Arguably this predicament is due in part, to the existence of few and weak tourism related Laws and regulations which invariably creates a state of uncertainty concerning the direction of tourism in Nigeria and prevalent lack of confidence in its investment opportunities. Any tourism destination devoid of a strategy for development that addresses the regulatory as well as fiscal and institutional structures of the industry is inherently compromising the present and future prospects of establishing a pragmatic tourism industry.
In addressing the foregoing, our discussions will focus on the need to develop and implement a fit-for-purpose legal and regulatory framework for tourism in Nigeria.
Legal and Regulatory Framework
Nigeria’s tourism industry is regulated by the following set of laws governing business entry/establishment generally in Nigeria:
- The Companies and Allied Matters Act Cap C20, LFN 2004; governs the formation and regulation business entities in Nigeria
- The Companies Income Tax Act Cap C21, LFN 2004; regulates income tax payable by companies
- The National Office for Technology Acquisition and Promotion Act Cap N62, LFN 2004; regulates the acquisition of foreign technology
- The Nigerian Investment Promotion Commission Act Cap N17, LFN 2004; regulates foreign investment in Nigeria.
The industry specific regulation for tourism at the Federal level is the Nigeria Tourism Development Corporation (NTDC) Act Cap N137, LFN 2004. The NTDC Act establishes the NTDC as the apex regulatory governance body for the tourism industry in Nigeria. The NTDC Act also provides for the establishment of a State Tourism Board in each State which is expected to assist the NTDC in implementing the provisions of the NTDC Act. It is important to note that some States in the country have also enacted laws to regulate tourism within their region. For instance, the laws regulating tourism in Lagos State include the Hotel Licensing (Amendment) Law 2010 and the Lagos State Hotel Proprietors Law 1990.
Historically, the Nigerian government’s initial involvement in the tourism industry commenced post-independence with the formation of the Nigeria Tourist Association (NTA), which was registered in1964 as a full member of the International Union of Official Travel Organization (IUOTO), the antecedent of the United Nations World Tourism Organization (UNWTO).
In the following years, other developments made within the industry were:
- The military administration in 1976, promulgated Decree 81 which established the Nigeria Tourism Board (NTB).
- In 1982, the development of a master plan on tourism in Nigeria started, leading to the 1990 National Trade and Tourism Policy (NTTP).
- In 1992, the Nigeria Tourism Development Corporation (NTDC) Act was enacted under which the NTB transformed into the NTDC. The NTDC Act mandated the NTDC to promote, develop and regulate tourism in Nigeria.
- In 2006, the NTTP was replaced by the Nigerian Tourism Development Master Plan (NTDMP). This 2006 master plan addresses the scope of foreign ownership and foreign direct investment (FDI), how tourism investment rights are protected, and the time and cost required for setting up a tourism business in Nigeria.
Regrettably, little movement has occurred in respect of legal and regulatory development beyond what has been highlighted above. There has been no amendment made to the 1992 NTDC Act to adequately reflect the current global trends and development in the tourism industry. Although regulatory movement has happened more in a few states of the Federation such as Lagos and Cross River States which have enacted laws regulating hotels, food, gaming and liquor business, there are still aspects of tourism which are not specifically addressed by either federal or state laws. For instance, no clear strategy has been provided for operating tour services in Nigeria, making this aspect of tourism practically non-existent in Nigeria.
Key setbacks for regulation within the industry at all levels include poor implementation of the existing regulations, difficulty experienced by visitors coming into the country due to complicated visa requirement, and multiple registration requirements for investors (i.e. registration with Corporate Affairs Commission, Local Government Authority, State Ministry of Commerce and Industry, State Hotels Board, NTDC etc.).
As a way forward, a review of the existing legislations and regulatory framework for tourism would be useful for engendering desired growth within the sector. Creation of a one-stop-centre for all tourism registration, licensing and permitting requirements would be useful for eradicating the complexities surrounding the process and encouraging investment (foreign and local) within the industry.
Furthermore, a vibrant legal and regulatory framework will be most useful to Nigerian tourism industry when the specific challenges of security, infrastructure (including tourism infrastructure), professionalism, a stellar service culture (for tourism professional and other Nigerians), creation of tourism products around all of Nigeria’s tourism clusters and major cultural celebrations, standards and classifications for all tourism establishments (including all related products and services), and an aggressive campaign for Nigeria as a tourist destination become the priority of and are driven by the government and the private sector. NEWS UPDATESCAC – Final Notice on Striking off of Names of Dormant Companies
The Corporate Affairs Commission has announced that 38,717 companies have been delisted in line with Section 525 of Companies and Allied Matters Act for failing to file annual returns as and when due. The list is available on www.cac.gov.ngor at their offices. All affected companies are advised to take steps to have their names relisted by filing the requisite annual returns and other statutory updates such as notice of appointment of secretary, change of registered address, change of directors, etc. on or before 31 December 2015. These remedial measures will be foreclosed once the list is gazetted.
The ‘Anti-Social Media’ Bill
The Bill for an “Act to Prohibit Frivolous Petitions and Other Related Matters”, now popularly called the Anti-Social Media Bill, has passed through second reading in the upper chamber of the National Assembly. The bill, sponsored by Senator Bala Ibn Na’Allah (APC Kebbi South), seeks to clamp down on anyone who via social media of any description publishes/ broadcasts any with malicious intent to discredit government or any person or group of persons. The Bill prescribes penalty for such as a term of imprisonment of two years or a fine of N 4 million with respect to Government or its institutions and a term of imprisonment of two years or a fine of N 2 million with respect to persons or group of persons.
This Bill has raised a lot of issues especially with respect to the fundamental rights of persons to freedom of speech as enshrined under Section 39 of the Constitution of the Federal Republic of Nigeria. Other issues raised by this include ‘whether this Bill is not anti-democracy’ and ‘whether or not it is relevant in view of the existence of both statutory and case law on the tort of defamation i.e. libel and slander.
There has been considerable objections from the masses and organized interest groups like the On-line Publishers Association of Nigeria (OPAN) which has sued the Senate at the Federal High Court in Abuja seeking declarations and injunctions to stop the Federal Legislature from proceeding with and enactment of the Bill.
We will be on the look-out for the final determination of this suit and the outcome of the Bill before the Federal Legislators.
Local Content in Power Sector
A Regulation on National Content Development for the Power Sector 2014 has been put in place by the Nigerian Electricity Regulatory Commission (NERC). The regulation envisages that Nigerian companies are given first considerations for the supply of goods, works and services in the power sector. This regulation flows from the Federal Government policy on Local Content first enunciated in the National Electric Power Policy (NEPP) of 2001 which mandates the regulator to ensure local content in the electricity market in Nigeria.The objective of the regulation is to deepen the participation of Nigerians in the emerging electricity industry as well as stem capacity flight in the national economy.
In line with this regulation, the NERC has inaugurated a high-powered eleven-man (11) panel – Nigerian Content Consultative Forum – to aid implementation of the regulation. The Nigerian Content Consultative Forum will operate in advisory capacity and have membership from the industry operators and other stakeholders with background in fabrication, engineering, finance services, legal and insurance, information and communication technology, education and training and any other professional services as may be considered by the Commission.
30 New Judges for the Federal High Court
Thirty (30) new judges were, on Wednesday the 2nd day of December, sworn into office as justices of the Federal High Court. Approval of their appointment by the President of the Federal Republic of Nigeria followed the recommendation of the National Judicial Council (NJC). This raises the number of judges of the Federal High Court which hitherto was 55 judges in about 38 divisions of the court across the Federation to 85 judges. Their appointment, under the NJC’s new guidelines, was underpinned by the need to ensure transparency; and prevent corrupt and indolent persons from finding their way to the bench.
For an institution continually bogged down by numerous pending cases, the addition of 30 new judges is a big boost for the Federal High Court. If anything, the new appointments are expected to reduce the number of cases per judge; and thereby lead to acceleration of adjudication. Considering that justice delayed is justice denied, the appointment may well be the first step to purging the judiciary of its reputation as an instrument for delaying the dispensation of justice.
Merry Christmas in Legal Terms: Please accept without obligation, express or implied, these best wishes for an environmentally safe, socially responsible, low stress, non-addictive, and gender neutral celebration of the winter solstice holiday as practiced within the most enjoyable traditions of the religious persuasion of your choice (but with respect for the religious or secular persuasions and/or traditions of others, or for their choice not to practice religious or secular traditions at all) and further for a fiscally successful, personally fulfilling, and medically uncomplicated onset of the generally accepted calendar year (including, but not limited to, the Christian calendar, but not without due respect for the calendars of choice of other cultures). The preceding wishes are extended without regard to the race, creed, colour, age, physical ability, religious faith, choice of computer platform, or sexual preference of the wishee(s).
Culled from ahajokes.com:http://www.ahajokes.com/