Hussaini Magaji, who is the Registrar-General of the Corporate Affairs Commission (CAC) in Nigeria, recently announced that around 100,000 Point of Sale (PoS) operators have officially registered their businesses with the commission. This registration is part of a project aimed at formalizing the operations of PoS businesses.
To give you an idea of the scale, the Nigeria Inter-Bank Settlement System reports that there are more than 1.9 million PoS terminals being used by businesses and individuals across the country. However, the number of registered operators is still quite low. The CAC had aimed to register 250,000 PoS operators during this initiative, which ran from July 7 to September 5, 2024. Unfortunately, they only reached 100,000 registrations, which is a significant shortfall.
Magaji shared this information during a training session in Abuja that focused on improving compliance and enforcement within the commission. This training involved participants from all 36 states of Nigeria and was designed to help the CAC better manage corporate registrations and ensure that businesses follow the rules.
The main goal of the registration initiative is to reduce fraud and help combat issues like kidnapping and ransom payments. Magaji pointed out that while some financial technology (fintech) companies understand the importance of having formal documentation for businesses, others are still stuck in outdated ways of operating informally. This informal approach often involves keeping cash hidden away, which poses risks.
He explained that the CAC has registered about 100,000 PoS operators, but this is far from the 250,000 they hoped for. Beyond the PoS sector, there are about 40 million small businesses in Nigeria, and the CAC aims to have 50% of these businesses registered formally.
Magaji also mentioned that the commission is working with other regulatory bodies to create penalties for those operators who refuse to register their businesses. He warned that dealing with unregistered businesses is risky because they can disappear without a trace and are often involved in illegal activities like money laundering and financing terrorism. Additionally, unregistered businesses cannot access government support, so formal registration is crucial for legitimate operations.
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He indicated that there is still a chance for businesses to get their registrations in order before stricter enforcement measures are implemented. He also clarified that PoS operators do not need to register multiple times with different fintech companies.
Looking ahead, the CAC is exploring the use of Artificial Intelligence (AI) to streamline routine tasks like business name reservations and registrations. This would allow human staff to focus on more complex issues that require judgment and discretion.
Magaji emphasized that the commission is restructuring its organizational framework to create more opportunities and align its operations with international standards. He highlighted the importance of state offices in this process and noted that the training was intended to prepare the commission for future challenges.
The training also included strategies for dealing with unregistered businesses, including unregistered PoS operators. Furthermore, the commission plans to address issues related to shell companies and improve transparency in business ownership in line with global standards.
The training for CAC enforcement officers will take place in two batches and is expected to conclude on January 25, 2025.
