01 July 2014, Lagos – Barely two years after it was commissioned by the Minister of Trade and Investment, Mr. Olusegun Aganga, the 24 hours registration of businesses by the Corporate Affairs Commission, CAC, has collapsed due to technical hitches occasioned by server failure.
As a result, business registration now takes between one to three months, while business name availability search takes more than one week.
During the course of the investigation, this reporter applied for business name availability search at the CAC office at Alausa, Ikeja. He was asked to check back in nine days. When he sought to know why, the attendant at the availability section responded, “because it is not ready”.
Stakeholders, who spoke to Vanguard about this development, said that the process is frustrating and it discourages business owners from applying for business registration.
Recounting his ordeal in this regard, a business owner, Mr. Yemi said that he is yet to complete the process of registering his business, since he commenced three months ago.
He said: “The whole thing is frustrating. I have been pursuing this registration for more than three months now. At some point I stopped and when I came back they demanded I do a re-validation. Now I have done that but they can’t find my documents. I have complained but they asked me to check back.”
Another customer who spoke on condition of anonymity, said he was an agent who helps people to register. He acknowledged that the Commission had been meeting the 24 hours deadline immediately after the service was launched but since late 2013, it has been having problems with its server. He said as a result of that, availability search now takes more than a week, sometimes up to three weeks.
This was confirmed by a notice at the Commission’s customer service section, dated 27th of January, 2014. In the notice, the Commission apologised to customers for its inability to continue with the 24 hours business registration due to server problem. It added that customers should bear with the Commission as the problem would soon be rectified and the 24 hours service restored.
A lady attendant at the customer service desk also confirmed that due to server problem, the 24 hours registration has been put on hold. She said the Commission was working very hard to rectify the problem and return to 24 hours service.
24 hours registration mere propaganda
However, another agent, Olajire Oladiran dismissed the 24 hours business registration as a mere propaganda, saying there was never anything like that in the first place.
Oladiran who is an Executive Director in a firm of Chartered Secretaries lamented the inability of the Commission to keep to its promise to offer 24 hour business name availability search at least.
He said, “The 24 hour registration is propaganda. It was the Minister of Trade and Investment, Mr. Olsegun Aganga who flagged this so-called 24 hours business registration sometimes in 2012. But then no one knew how they managed to do that for few weeks and then stopped. From November/December, 2013 they stopped and have been making only excuses and promises.”
While unveiling the 24 hours business registration in November, 2012, the Minister of Trade and Investment, Mr. Olusegun Aganga said that, “The target is to ensure that companies are registered within two hours and to institute a vibrant and transparent companies’ registry, where services will be user-friendly.”
He had also at the time directed that a complaints register be opened for anyone who is not able to get his company registered within 24 hours. This he said was to show that, “We mean business and that we care about our customers.”
Oladiran however explained that despite such promises, what the Commission was able to accomplish within 24 hours was business name availability search.
“Within that period, it was possible that you could drop your availability search today and within 24 hours really, if you check your mail, you will see it and then you wouldn’t have to go back to the CAC office. It was a wonderful experience.
“But you see, all over the place CAC is advertising 24 hour registration but in reality the registration process would not have been completed within that time frame. But the 24 hour period was important for the availability search, because once the name is available, you will continue with the rest of the registration. However along the line, the thing stopped and all we have been hearing is that the server has problem.
“Right now, sometimes availability search takes between three weeks and one month. But in all, the truth is that the registration does not take 24 hours; only availability search could be possible within that time.”
He however explained that what CAC may mean by the 24 hours business registration may be 24 hours express registration.
He said that, “In express registration, a customer is required to pay N50, 000 in addition to the regular fee, to have the registration completed in one day. But then because of their server problem, the 24 hours express registration is not even feasible at the moment. Don’t forget that the 24 hours excludes the time you have waited for availability search to come out. It also excludes the days you waited for incorporation. So in reality there is nothing like 24 hours registration,” he said.
He noted that if the server worked efficiently, a business name search should not take more than three or four hours and within that period that they were able to offer 24 hours registration. He added that when the system was operating, his company was able to register up to six names and was able to get the certificates of incorporation for the companies within one week.
Delay, bad business for operators
Oladiran further noted that this delay in business registration process has negative implications both for the CAC, operators and the Nigerian economy.
“This is taking a toll on the integrity of operators. This is because if a client is hearing of 24 hours registration from CAC and yet they are not even able to get availability within three days, this will sow doubts in their minds and the integrity of the operator will appear questionable,” he lamented, adding that the trend will further lead to loss of business confidence.
Foreign investors disappointed
He said, “There was this particular incident, the clients came from Hong Kong, they came through Benin Republic to Nigeria and they came through us and initiated a name search. They were waiting for the name search result to come out before they go back to Benin Republic, from where they will head back to Hong Kong. But they waited for three days, the result didn’t come out.
They waited for one week and the result still didn’t come out.
They were very angry and left. Their contact person who gave us the job was infuriated and questioned our competence. At the end of the day, everyone was frustrated. They wasted their time, we missed the business opportunity and Nigeria lost them as investors.”
He added that, “This is also leading to loss of revenue on the part of CAC because any availability search initiated is paid for and if a particular name is not available, a client may have to pay again to initiate another search. The implication is that the more names they search for, the more money they make but now that availability takes like three weeks, it means they will generate less revenue from name search.”
He noted that the idea of prompt and timely registration is essential if government wants entrepreneurship to have a ripple effect on the economy, since every business ought to be legally registered for that to happen.
Implications for Nigerian economy
Oladiran said that the inability of CAC to offer prompt business registration has severe implications for the Nigerian economy if things continue the way it is, including being unable to attract foreign investment that Nigeria currently craves.
He said, “One of the implications for the Nigerian economy is that the investors we are trying to attract will not be attracted. This is because business is done on trust and once the trust is not there from the beginning, things will not work out properly. So the investors we are trying to attract may not rally come.
“Also, money that should be generated and channeled to infrastructural development will not come. For example, if operators are supposed to register like ten companies in a month but because of this delay of availability not out in two weeks or four weeks, and we register one out of the ten companies that we are supposed to register, tell me how the operators or CAC themselves can make more money?
This is because the more companies that are registered by CAC, the more they are better off financially. On the other hand, supposing you give me a name today, and by tomorrow the result is out showing that the name is not available, there are chances that you will initiate another search, thus paying another fee, meaning that they have generated income from availability twice in one week but if there is a delay in availability search, income generation will be sparse on the part of both the operators and CAC and the Nigerian economy will not attract investors as it should. It also discourages more people from coming forward to register.”
CAC should apologise to Nigerians
Oladiran said given the fact that CAC was unable to keep their promise of 24 hours business registration, it should have come out to say so and seek help but instead they let people suffer unnecessary inconveniences. He said as a result, CAC should tender unreserved apology to the general public.
“This idea of advertising twenty four hours and not being able to meet up with it is pesky and frustrating. In fact, what I expect CAC to do is to apologise to the general public. If you have a problem and you come out and say so, people who have the solution will come out to help.”
However, when contacted, the Head Public Affairs of the commission, Mr. Williams Churchill who initially declined to comment, denied that the Commission was having challenges with its server and that the 24 hours registration was still effective.
When asked about the notice posted at the Lagos office of the Commission at Alausa, Ikeja apologising to customers for the Commission’s inability to continue with the 24 hours registration due to server problem, he denied knowledge of such statement insisting that the Commission still offers 24 hours service.
According to him, “I can tell you that the 24 hours registration is still working. There may be technical issues sometimes but that doesn’t mean that the 24 hours registration is not working.
As for the statement apologising for inability of the Commission to continue with 24 hours registration, he said, “I am not aware of such notice.”
Asked if that does not imply a kind of disconnect between the headquarters and the zonal office, he declined to comment and then hung up the phone. Further attempt to contact him proved abortive.