The Senate passed the Companies and Allied Matters Act (Repeal and Re-enactment) Bill 2020 on March 10, 2020, The CAMA Bill seeks to establish an efficient means of regulating businesses, minimize the compliance burden of small and medium enterprises, enhance transparency and shareholder engagement and promote a friendly business climate in Nigeria. Various critical stakeholders including The Nigerian Stock Exchange participated in drafting the Bill.
While some stakeholders picked holes in some sections of the Bill, especially on the regulatory functions of the government, a vast majority of stakeholders believe that the amended Bill will further open up business opportunities in Nigeria.
In what amounted to submission of key points, the Managing Director, CardinalStone Partners, Mr Mohammed Garuba identified some of the benefits of the new CAMA to the Capital Market:
“ It will have a huge impact on the market as it places us at par with our international peers. We shall have more registered companies and this will increase the number listed companies. It will help to reduce cost because it creates a lot of efficiencies across board. It has placed less emphasis on use of seal before certificates can be verified and many other documents needed to process capital market transactions in the primary market.
“ Also. the need to pay unnecessary amount of money for minimum share capital in relation to authorized share capital has been curtailed. The replacement with minimum share capital is a masterstroke. The cost of physical Annual General Meeting ( AGM) can now be avoided, especially, for very large companies as Online meeting has provided an alternative. This shall whittle away the misplaced influence of leaders of shareholders association on quoted companies.. CAMA is now much more aligned with the code of corporate governance and this will aid better compliance and less confusion.. The expectation of full compliance with code of corporate governance will go a long way towards re-reassuring foreign investors.