Nigeria’s Corporate Affairs Commission (CAC) has been under scrutiny for the challenges entrepreneurs face when attempting to register their businesses. Despite the introduction of an online registration system in 2015, many business owners still struggle with bureaucratic delays, hidden costs, and system inefficiencies.
Chinedu Nwachukwu, a graphic designer who recently decided to formalize his business, shared his frustrations with the registration process. “Though the official registration fee is as low as N10,000, by the time you add the cost of processing, hiring a lawyer, and other expenses, it goes up to N20,000 or N30,000,” he said. “At some point, frustration sets in. You eventually have to seek legal help, even though the process is supposed to be simple and self-service.”
Christopher Thomas, the founder of Skylight Property and Durable Homes in Abuja, echoed similar sentiments. Despite paying all the necessary fees online, he experienced months of delays and queries from the CAC. “Even after submitting all required documents and paying the necessary fees, I kept receiving queries,” he said. “It’s disheartening. I can’t even begin operations because the business isn’t officially recognized.”
The challenges extend beyond delays. Hidden costs and system inefficiencies have driven many entrepreneurs to abandon the formal registration process altogether. Odoh Alexander, a media services provider, noted that while official fees are reasonable, network glitches and other issues often force people to rely on agents who charge significantly higher rates.
In an effort to regulate the informal economy, the CAC mandated the formal registration of all businesses, including over 1.9 million Point of Sale (PoS) terminals. However, operators struggled to meet the deadline, citing the slow and cumbersome registration process.
Experts have called for reforms to streamline the registration process and make it more accessible. Paul Alaje, a chief economist at SPM Professionals, highlighted the need for better integration between the CAC and other governmental agencies. “While Nigeria has made significant strides, there’s still a long way to go,” Alaje said. “When you compare our system to those of other countries, it’s evident that we are still behind.”
Policy analyst Chike Eze recommended automating the registration workflow to improve efficiency and transparency. Fintech platforms like Mintyn have also called for a more user-friendly process, particularly for individuals in rural areas who may lack digital literacy.
Despite the challenges, there is hope for improvement. Nigeria has climbed from 169th to 131st on the World Bank’s Ease of Doing Business index in recent years, largely due to the introduction of the online registration platform. However, critics argue that the pace of improvement has been slow compared to the efforts made to enhance business operations in the country.
The CAC, for its part, maintains that its services are transparent and user-friendly. Spokesperson Dominic Inyang attributed complaints to applicants failing to follow registration instructions provided on the commission’s website. He also clarified that the CAC is not involved in tax collection, which is handled by the Federal Inland Revenue Service (FIRS).