Insight type: Legal Alert

The enactment of the Companies and Allied Matters Act (CAMA) 2020, introduced a significant change in Nigerian corporate law by allowing the registration of private companies with single shareholders. Under the previous law, the incorporation of any company required a minimum of two shareholders.

The National Bank of Ethiopia (NBE) recently unveiled a groundbreaking Foreign Exchange Directive, merging previous directives into a unified and comprehensive document known as Foreign Exchange Directive No. FXD 01/2024 (Foreign Exchange Directive). Dubbed the ‘Green Directive’ by the NBE Governor, this framework brings in several new regulations and flexibilities in the foreign exchange regime, which are anticipated to impact business operations, investment, and financing activities nationwide. 

The Central Bank of Nigeria (CBN) recently issued new Regulatory and Supervisory Guidelines for Bureau de Change (BDC) Operations (the Guidelines). This follows an exposure draft issued for stakeholder input in February 2024. The Guidelines issued on 22 May 2024 supersede the Revised Operational Guidelines for Bureau de Change in Nigeria issued in November 2015.

 

In an important Supreme Court of Kenya decision in the case of Stanbic Bank Kenya Limited v Santowels Limited, Petition No. E0005 of 2023, the court has held that interest rates on loans advanced by banks and financial institutions are subject to the provisions of Section 44 of the Banking Act, Cap 488 (the Banking Act) and as such, banks and financial institutions are required to seek the approval of the Cabinet Secretary responsible for matters relating to Finance (CS) , before increasing interest rates on loans advanced to their customers.

The Securities and Exchange Commission (SEC or the Commission) has released a pre-licensing framework for fintechs that operate in the digital assets and investment space. The Commission on 21 June 2024 issued A Framework on Accelerated Regulatory Incubation Program (ARIP) for the Onboarding of Virtual Assets Service Providers (VASPs) and other Digital Investments Service Providers (DISPs) (the ARIP Framework). This follows the proposed major amendment to the Commission’s Rules on the Issuance, Offering Platforms, and Custody of Digital Assets issued on 15 March 2024, which is yet to be finalised.

On 26 June 2024, in response to two weeks of widespread anti-tax protests across major towns and cities in Kenya, President William Ruto recently announced, during a press briefing, the withdrawal of the controversial Finance Bill, 2024 (the Bill). Originally published in the Kenya Gazette on 9 May 2024 and subsequently passed by Parliament on 25 June 2024 amidst nationwide demonstrations, the Bill proposed several amendments, including the introduction of VAT on bread and taxes on products such as diapers and sanitary towels, among other significant measures likely to increase the cost of living. For a detailed review of the Bill and the proposed tax measures, please refer to our analysis of the Finance Bill 2024.

The National Environment Management Authority (NEMA) through a notice dated 8 April 2024 (the Notice) recently announced that all organic waste generated by households, private sectors and public sector institutions, religious institutions, private and public functions, and events shall be strictly segregated and placed in 100% biodegradable garbage bags or bin liners. The Notice requires that all the waste collected as organic waste shall be collected separately (not mixed with other waste types) and should be transported to a designated material recovery facility for further processing. NEMA has directed that the use of conventional plastic garbage bags and bin liners shall cease. The Notice also provides that the County Government and private waste service providers licensed by NEMA must provide their clients with 100% biodegradable garbage bags. The directives set out in the Notice are to be implemented within 90 days of the notice, that is, from 7 July 2024.

After a long period of public consultation and following the enactment of the Climate Change (Amendment) Act in September 2023 (the Amendment Act), the Climate Change (Carbon Markets) Regulations 2024 (the Regulations) were gazetted on 17 May 2024. The Regulations are a welcome step towards providing certainty and predictability in operating carbon projects in Kenya. Additionally, the Regulations aim to establish an operative and institutional framework for carbon markets’ effective and efficient functioning. They also include several key provisions on the categorisation of projects, carbon project prerequisites and timelines for implementation and operationalisation of projects.

In February 2024, ALN Kenya submitted comments to the Ministry of Environment, Climate Change and Forestry, with respect to the draft Climate Change (Carbon Markets) Regulations 2023. We are pleased to note that our recommendations regarding the definitions of land-based and non-land-based projects, inclusion of fiscal and non-fiscal incentives for the development of carbon projects in Kenya, as well as the importance of accounting for business costs when determining the annual social contributions, have been incorporated in the Regulations. ALN Kenya adopts a proactive stance on regulatory review and compliance. Our team keeps abreast of the latest regulatory developments and trends, collaborating closely with clients to identify potential risks and opportunities.

At a glance the Regulations:

• Provide the institutional framework for the review, approval and operationalisation of carbon projects.
• Enhance clarity on land-based and non-land-based carbon projects, differentiating the specific fiscal and non-fiscal incentives suitable for each project type.
• Clarify that the annual social contribution is set at 40% and 25 % for land based and non-land-based projects respectively. Notably, these contributions are to be calculated after deducting the business expenses.
• Require the free and informed consent of landowners where the project proponent does not own the land. This requirement applies where the property is owned by a private person or by a community.
• Indicate that the anticipated timeline for the conceptualisation, approval and commencement of a carbon project may extend up to fourteen months, with project proponents having up to twelve months from the date of receiving a letter of no objection to submit a project design document for approval.

Without any forewarning, the current administration operationalised the 11 years old, Public Benefits Organisations Act (the PBO Act) which replaces the 30-year-old Non-Governmental Organisations Coordination Act (the NGO Act), significantly altering the regulation of not-for-profit entities.

The Finance Bill, 2024 (the Bill) was published and gazetted on 9 May 2024. The Bill proposes to make a raft of amendments to tax-related laws in Kenya, including the Income Tax Act (Chapter 470, Laws of Kenya), the Value Added Tax Act, 2013, the Tax Procedures Act, 2015, the Miscellaneous Fees and Levies Act, 2016 and the Excise Duty Act, 2015.