Introduction

In this month's regulatory digest, we highlight the guidelines published and activities undertaken by key regulatory institutions, including the Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), National Information Technology Development Agency (NITDA), Federal Competition and Consumer Protection Commission (FCCPC), and court actions. We consider how these regulations are likely to influence the country's economy and business landscape. Businesses can make informed decisions to navigate the landscape successfully by considering these regulatory activities.

CBN’s Guidelines on Management of Dormant Accounts, Unclaimed Balances and other Financial Assets in Banks and other Financial Institutions in Nigeria

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The Central Bank of Nigeria (CBN) has continued its mission to significantly improve financial asset management.  In a circular dated July 19, 2024, the CBN unveiled the Revised Guidelines on the Management of Dormant Accounts, Unclaimed Balances, and Other Financial Assets in Banks and Other Financial Institutions in Nigeria (the “Guidelines”). This guideline supersedes the previous guideline issued in October 2015, which set a new standard for handling dormant accounts and unclaimed funds.

The Guidelines essentially standardise the management of dormant accounts, unclaimed balances, and financial assets, including the reactivation of dormant accounts and reclaiming of unclaimed balances. They also outline the procedure for the administration of these balances, funds, and assets by banks and other financial institutions in Nigeria. Our detailed analysis of this guideline will be published soon.

Central Bank of Nigeria (CBN)

1. Circular on FX Spot Sales to Authorised Dealers: The Central Bank of Nigeria (CBN) issued a circular detailing the sale of foreign exchange (FX) totalling US$122.671,000 (One Hundred And Twenty-Two Million, Six Hundred and Seventy-One Thousand) to authorised dealers using two-way quotes. According to the circular, all authorised dealers are required to ensure that FX purchases from the CBN are used solely for trade-backed transactions and reported within 72 hours to maintain transparency and accountability.

In a separate circular, the CBN announced additional FX  sales and purchases.  The CBN sold a total of US$106,500,000 (One Hundred and Six Million and Five Hundred Thousand US Dollars) to 29 authorised dealer banks. The exchange rates for these transactions ranged from N1,498.00/US$1  to N1,530.00/US$1. Additionally, the CBN purchased US$9,500,000 (Nine Million and Five Hundred Thousand Dollars) from four authorised dealer banks. The exchange rates for these transactions were between N1,510.00/US$1 and N1,550.00/US$1. All transactions have a value date of July 19, 2024, indicating when the funds are expected to be settled.

Furthermore, the CBN announced the sale of $20,000 to each Bureau De Change (BDC) operator at the rate of N1,405/1$ and mandated them to sell to eligible customers at a price not exceeding 1. 5% above the purchase price. 

This move is part of the CBN's ongoing efforts to improve the supply of FX in the market, thereby maintaining stability in the foreign exchange market.

1. Revamped E-Dividend Mandate Management System Portal: The regulatory body announced the launch of the newly revamped e-Dividend Mandate Management System (e-DMMS) Portal. This upgraded portal introduces a "self-service interface" that allows investors to apply for e-dividend mandates virtually, eliminating the need to visit a Registrar or a bank in person.

The launch of this initiative represents a significant effort to decrease the buildup of unclaimed dividends and improve the overall satisfaction of investors in the Nigerian capital market.

1. NITDA Reconstitutes Blockchain Steering Committee for Policy Implementation

NITDA reconstituted the National Blockchain Policy Steering Committee. The reconstituted committee, aligned with NITDA's broader goal of fostering innovation and entrepreneurship, will be instrumental in developing a comprehensive implementation plan for the National Blockchain Policy. With blockchain technology poised to contribute $1.76 trillion to the global economy by 2030, Nigeria is eager to harness its benefits. The committee's work will be crucial in ensuring the country capitalises on this opportunity.

The committee will collaborate to transform the policy into actionable strategies through a series of co-creation workshops. This approach will foster inclusivity and ensure that the implementation process addresses the needs of all stakeholders.

2. NITDA Warns Public of Business Email Compromise (BEC) Scams

NITDA issued an advisory to the public about the increasing prevalence of Business Email Compromise (BEC) scams. These cyberattacks involve fraudsters impersonating legitimate individuals or organisations to deceive victims into divulging sensitive information or transferring funds. The advisory further outlined the potential consequences of falling victim to BEC scams and provided essential preventive measures to safeguard individuals and businesses from these cyber threats. This is the agency’s effort to safeguard the public from IT-related risks.

3. NITDA and ACEPHAP Join Forces to Revolutionise Healthcare in Nigeria

NITDA is set to collaborate with the Africa Centre of Excellence for Population Health and Policy (ACEPHAP) to leverage technology in transforming Nigeria's healthcare sector. This partnership aligns with the Nigerian government's focus on digital innovation to drive education, health, and social investment improvements.   

By combining NITDA's technology expertise with ACEPHAP's healthcare knowledge, the collaboration aims to develop innovative solutions to address pressing health challenges. This partnership is a key component of NITDA's Strategic Roadmap and Action Plan (SRAP 2.0), which prioritises creating a digital ecosystem that benefits all sectors of the economy.

Anticipated outcomes of this collaboration include a significant enhancement in healthcare delivery, a marked improvement in access to quality care, and a substantial boost in overall health outcomes in Nigeria.

4. NITDA Launches Startup Labelling Committee to Drive NSA Implementation

NITDA launched the Startup Labelling Committee to support the operationalisation of the Nigeria Startup Act (NSA). This committee will oversee the qualification process for startups to receive benefits and incentives under the Act. NITDA's commitment to fostering innovation and entrepreneurship in Nigeria is evident through the establishment of this committee.

1. Repeal and Amendment of the National Identity Management Commission (NIMC) Act 2007 - The National Assembly is amending the NIMC Act 2007 No. 23 by proposing  ‘A Bill for an Act to Repeal the National Identity Management Commission (NIMC) Act 2007, and to provide for the Establishment of a National Identity Database and the National Identity Management Commission Charged with the Responsibilities for Maintenance of the National Database, the Registration of Individuals, and the Issuance of Identity Credentials; and for Related Matters, 2024. This legislative effort aims to strengthen NIMC’s regulatory functions, improve the Nigeria ID system's effectiveness and inclusivity and provide a National Identity Database and the National Identity Management Commission Charged with the Responsibilities for Maintenance of the National Database, the Registration of Individuals, and the Issuance of Identity Credentials; and for Related Matters, 2024’. 

Key amendments in the bill include:

• Broadened Eligibility Criteria: Expanding the scope of registrable persons to ensure inclusivity and universal coverage, allowing all residents in Nigeria to obtain a National Identification Number (NIN) for recognised identification purposes.
• Enhanced Data Protection: Incorporating robust data protection measures to safeguard the privacy and confidentiality of individuals' data, fostering trust among citizens.
• Administrative Enforcement: Enhancing NIMC’s administrative enforcement powers to ensure timely and accurate compliance with ID registration requirements.
• Streamlined Registration Process: Reducing bureaucratic hurdles and enhancing the reliability of the Nigeria ID system.
• Harmonised Identity Systems: Promoting interoperability and coherence across various government sectors by harmonising existing identity systems across Ministries, Departments, and Agencies (MDAs).
• Removed Criminal Penalties: Criminal penalties for non-use of NIN will be replaced with administrative enforcement measures to encourage compliance without imposing legal consequences.
• Strengthened Regulatory Capacity: Enhancing NIMC’s capacity for effective oversight and regulation of the Nigeria ID system, ensuring adherence to standards and guidelines, thereby fostering public trust.

2. The NIMC National Identity project, supported by the World Bank, the European Investment Bank, and the French Development Agency, is designed to expand the issuance of NINs. This initiative aims to improve access to services, strengthen data protection, and facilitate digital economy participation, especially for marginalised groups.

1. Partnership: The Ministry of Communications, Innovations and Digital Economy and the United States Department of Commerce issued a joint statement on harnessing artificial intelligence (AI), facilitating data flows and empowering digital upskilling. This partnership aims to promote innovation, enhance digital trade and investment, and support the development of emerging technologies like AI, focusing on economic growth, job creation, and fostering an inclusive and sustainable digital future. 

The statement highlights the importance of data protection, cross-border data transfers, and secure information and communications technology (ICT) in driving the digital economy. Both countries intend to work together on AI governance, adoption, and research, with a particular focus on sectors such as agriculture, manufacturing, transportation, and healthcare. Additionally, they emphasise the need for digital upskilling, particularly for youth, women, and underrepresented communities, to ensure inclusive access to digital skills and literacy, thereby empowering a skilled workforce to participate in the digital economy effectively.

1. PIN Initiates a Public Interest Suit Against Regulators: Paradigm Initiative (PIN), a pan-African NGO advocating for digital rights, has filed a public-interest litigation at the Federal High Court of Nigeria against nine respondents, including the National Identity Management Commission (NIMC), the Nigeria Data Protection Commission (NDPC) and the Central Bank of Nigeria (CBN), following a data breach where personal data was sold for N100. PIN is seeking a court order for a full investigation and publication of the findings regarding the breach linked to websites XpressVerify.com.ng and AnyVerify.com.ng, cessation of data processing operations, compensation for affected individuals, and an inquiry into other potential data leaks, asserting that the respondents have shown indifference to protecting Nigerians' personal data.
2. Lawyer Sues NBA Presidential Candidates for Privacy Violations: A lawyer has filed a lawsuit against the three presidential candidates of the recent Nigerian Bar Association (NBA) election, alleging they breached his privacy by sending unsolicited campaign emails and SMS messages. The suit, filed at the Federal High Court in Ibadan, claims the candidates' actions violated the Nigeria Data Protection Act 2023 and Section 37 of the Nigerian Constitution, which guarantees the right to privacy. The lawyer seeks declarations that the candidates' actions were illegal and unethical, as well as a perpetual injunction to prevent further unauthorised use of his personal data. No court date has been set for the case. 

As regulatory bodies adapt to evolving trends, particularly regarding emerging technologies and stakeholders' diverse needs, the importance of collaboration, partnership and transparency cannot be overstated. These elements are vital for achieving sustainable development and ensuring the effectiveness of regulatory frameworks. The collective efforts of all stakeholders—including government agencies, the private sector, civil society, and the public—are essential for successfully navigating the intricate complexities of the regulatory landscape and ultimately propelling Nigeria toward its development goals. 

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Federal Road Safety Corp (FRSC), Independent National Electoral Commission (INEC), Nigeria Data Protection Commission (NDPC), and the Attorney General of the Federation.

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