The Registrar-General of the Corporate Affairs Commission, Hussaini Magaji, has disclosed that 100,000 Point of Sale operators have officially registered their businesses with the commission under its POS formalisation project.
According to the Nigeria Inter-Bank Settlement System, there are over 1.9 million PoS terminals deployed by merchants and individuals nationwide.
The Registrar General stated that the current number of registrations is a significant shortfall compared to the 250,000 registrations that were expected from the initiative, which was launched on July 7, 2024, and concluded on September 5, 2024.
He disclosed the figure during an In-House Enforcement and Compliance Training for state offices on Monday in Abuja.
Tagged “Re-engineering the commission for effective discharge of compliance and enforcement mandates to ensure efficient management of corporate vehicles”, the training drew participants from 36 states of the Federation.
The CAC stated that the registration initiative aims to reduce fraud within the system, as well as combat kidnapping and the payment of ransoms.
Magaji said while some fintechs appreciated the transformative nature of modern business which requires formal documentation as an essential first step, others with archaic mentally became fixated on the old and obsolete informal mode of business operations.
He said, “The drive for rigorous Compliance and Enforcement functions, you would have noticed commenced with the POS Formalization Project under which POS Operators were required to register a minimum of Business Name in line with the requirements of section 863 (1) of CAMA which require prior registration before commencement of business or at most within 28 days of commencement for Business Names. Some of the Fintech Companies on which platforms the POS operators do business saw the wisdom and the benefits that could accrue to the businesses themselves and the nation at large.
“While the visionary Fintechs mentioned above and their operators appreciated the transformative nature of modern business which requires formal documentation as an essential first step, others with archaic mentally became fixated on the old and obsolete informal mode of business operations sometimes with cash kept under a pillow or in jute bags.
“The commission has to date registered about 100,000 POS operators under the POS formalization project. This is a far cry from the 250,000 expected from that sector alone. Apart from the Fintech sector, it is estimated that about 40 million micro, small and medium enterprises are operating in the economy. A realistic objective is to get 50 per cent formalisation of this figure.”
He further stated that the commission is working with other regulators to develop appropriate sanctions or responses to recalcitrant operators that have refused to heed the advice for formalisation.
He warned however that, “The risk of engaging in business transactions with unregistered businesses is very high. Such business is not only susceptible to disappearance into thin air without trace but also serves as an easy vehicle for money laundering and terrorism financing. Unregistered businesses also cannot access government interventions in any sector. Consequently, formalisation is the first step for the legitimate commencement of modern business.
“There is however a window for regularization between now and when the regulatory hammer will be brought on them. We are to also clarify that multiple registration is not required across each Fintech for each POS operator.”
Speaking further, the CAC boss said it is exploring the integration of Artificial Intelligence to handle routine operations such as name reservation and registration.
Magaji explained that AI could free up human resources to focus on more complex tasks, which require discretion and judgment beyond the capabilities of machines.
He said, “Emphasis on compliance enforcement has become more imperative now because of the growing realization that Artificial Intelligence could be deployed to perform routine operational tasks such as name reservation and even registration. This frees time and human resources that could be deployed to perform other tasks that require some measure of discretion usually inappropriate for computers or machines.
He also highlighted plans to restructure the Commission’s organisational framework, replacing the current organogram with a new one aimed at creating more opportunities and aligning CAC’s operations with global standards.
He underscored the importance of state offices in the exercise and added that the training was designed to usher the Commission into hyper post-incorporation mode.
A new organogram has already been developed and will be implemented once it receives approval from the relevant authorities.
As part of this transformation, Magaji emphasised ongoing capacity-building efforts to equip staff for future challenges and ensure the Commission is ready for the evolving demands of the registry.
He added that this training is expected to deal with the methodology of handling unregistered businesses which include unregistered POS operators.
Others are strategic implementation of Legal and Regulatory Framework for dealing with briefcase or shell companies, opaque ownership structures through nominee or trustee companies and proper disclosure of persons with significant control in line with the requirements of Persons with Significant Control Regulations as well as global standards.
The CAC Enforcement Officers Training which will be conducted in two batches is expected to wind up on Saturday, 25th January 2025.
