Investor Presentaiton
The Country and its
institutions
4.1.3.2
Business Organisation Labour and Social
and Regulation
Security Regulations
The Nigerian Financial Tax System
Services Industry
Foreign Exchange
Transactions
Investment in Nigeria
Accounting and
Auditing Requirements
Importation of Goods
Exportation of Goods
COVID-19 Economic
and Fiscal Measures
Based on the Regulation, CBN directed banks to divest from non-
banking business before the 'effective date' of 14 May 2012.
In 2018, the CBN issued a directive for the recapitalisation of
microfinance banks in Nigeria with a deadline of April 2021 for
compliance. However, due to the impact of Covid-19 pandemic on
economic activities, CBN issued a circular on revised deadlines in
April 2020. Consequently, different tiers of microfinance banks are
required to attain specific capital threshold by April 2021 and April
2022, respectively.
The CBN in December 2020 issued a Circular Ref. No: PSM/
CIR/GEN/CIR/01/22 introducing licence categorisations and
requirements for Nigerian payment systems, to regulate the
operation of participants in the financial technology space. The
Circular mandates all market participants, both existing and
new, in the Nigerian payment system to comply with the new
requirements not later than 30 June 2021.
Insurance Sector
The insurance sector has also undergone significant transformation
in recent years, although at a slower pace than the banking
industry. The industry is regulated by the Insurance Act and
supervised by NAICOM.
NAICOM has been making moves to enforce the following
compulsory insurance policies in Nigeria with a view to deepening
market penetration and enhancing the premium income of
insurance companies:
•
Group Life Insurance required under the Pension Reform Act,
2014.
Occupier's Liability Insurance required by Section 65 of the
Insurance Act, 2003.
• Motor Third Party Insurance as required by Section 68 of the
Insurance Act, 2003.
• Builder's Liability Insurance as required by Section 64 of the
Insurance Act.
Health Care Professional Indemnity Insurance as required by
Section 45 of the NHIS Act.
In 2018, the Federal Government announced a recapitalisation
programme for insurance companies through a 3-level Tier-Based
4.2
Capital Market
Minimum Solvency Capital model, effective 1 January 2019.
However, after a review of the recapitalisation plans submitted
by various stakeholders, NAICOM extended the deadline for
full compliance from 31 December 2019 to 31 September 2021.
Meanwhile, insurance and reinsurance businesses were required to
meet 50% and 60% of the new minimum capital requirements by
31 December 2020, respectively.
The capital market is regulated by the Securities and Exchange Commission (SEC)
and the Nigeria Stock Exchange (NSE) - as the self-regulatory agency in charge of
listing of securities and operation of the trading floor.
In 1995, the Federal Government of Nigeria liberalised the capital market to pave
the way for foreign portfolio investments on the stock exchange. As a result, the
Exchange Control Act 1962 and Nigerian Enterprises Promotion Act 1989 were
repealed and NIPC Act and the Foreign Exchange (Miscellaneous and Monitoring)
Provisions Act were enacted to allow foreigners to participate as operators and
investors in the Nigerian capital market.
The NSE is the only Exchange in the country dealing in listed equities with trading
floors in the major cities in Nigeria. The Exchange has undergone significant
transformation through the operation of the Central Securities Clearing System.
Transactions are completed in T+1 day, which conforms to global standards.
There are other regulated private securities exchanges operating as over-the-
counter (OTC) platforms, such as FMDQ and NASD OTC Securities Exchange,
for trading in debt instruments and unlisted securities, including equity and fixed
income securities.
"The NSE is the only Exchange in the
country dealing in listed equities with
trading floors in the major cities in Nigeria.
The Exchange has undergone significant
transformation through the operation of
the Central Securities Clearing System.
Transactions are completed in T+1 day,
which conforms to global standards"
KPMG
Investment in Nigeria Guide - 8th Edition
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