Regulatory compliance for manufacturing businesses in Nigeria

If you are starting a manufacturing business in Nigeria, there are a lot of compliances you need to carry out before commencing the business.

Regulatory compliance is not just a routine activity for manufacturers but a very important aspect of the business which will determine the success of the business, help consumers and investors build trust and give the business access into certain markets.

Because of how diverse manufacturing is, there are a lot of regulatory bodies guiding its activities which must be complied with. In this article we will be focusing on the required regulatory compliance applicable to manufacturing businesses in Nigeria.

The manufacturing sector plays a vital role in Nigeria’s economic development as a large portion of Nigeria’s population engage in at least one form of manufacturing activity such as cosmetics, automobile, cement, textile, pharmaceutical products, beverage, bakery, water production, soap production and electrical products. Every year the country experiences an increase in the amount of manufacturing activities which calls for the need for more awareness about regulatory compliance amongst manufacturers.

Key Licenses and Permits Required by Manufacturers in Nigeria

There are a lot of compliance requirements for manufacturing businesses in Nigeria which we will consider below;

Corporate Affairs Commission (CAC) Registration

This is the first step for every business before obtaining other licenses. This gives the business a legal identity especially when registered as a company and the authority to operate in Nigeria. This is a federal agency and the official website is https://www.cac.gov.ng/

Tax Compliance at the Federal Inland Revenue Service (FIRS) and State equivalent

Every manufacturer must obtain a tax identification number (TIN) from the Federal Inland Revenue Service (FIRS) and file appropriate taxes such as Corporate Income Tax (CIT), Value Added Tax (VAT), and Withholding Tax (WHT) and pay as you earn (PAYE) at the state level. Also, being tax compliant affords you the opportunity to be able to obtain a tax clearance certificate. The FIRS website is https://www.firs.gov.ng/

National Agency for Food and Drug Administration and Control (NAFDAC) Registration

NAFDAC regulates businesses that manufacture food, beverages, drugs, cosmetics, and other consumables in Nigeria. Manufacturers in these sectors must register their products and facilities with NAFDAC before commencing operations. This is a federal agency with offices in various states and its official website is https://nafdac.gov.ng/

Standards Organisation of Nigeria (SON) Certification

SON certification ensures that manufactured products or items used for manufacturing meet a set standard for quality, safety, and performance. It is required for toys, electrical and electronics, automotive, chemical products, mechanical material and gas appliances, paper and stationary and protective safety equipment. This is a federal agency with its official website at https://son.gov.ng/

Environmental Impact Assessment (EIA) Certificate

This assessment is regulated by the Federal Ministry of Environment, or the state equivalent and it helps manufacturers evaluate and mitigate the environmental impacts of their operations. It is applicable to manufacturing activities that affect the environment. The official website is https://environment.gov.ng/

National Environmental Standards and Regulations Enforcement Agency (NESREA) Permits

NESREA which is a federal body enforces compliance with environmental laws, particularly regarding waste management, pollution control, and hazardous materials. This applies o all manufacturers and it is very important because most manufacturing activities usually affects the environment. The official website is https://nesrea.gov.ng/

Sector-Specific Licenses

Manufacturers in certain industries must obtain additional sector-specific permits such as:

1. Pharmaceutical Manufacturing: Approval for pharmaceutical businesses from the Pharmacists Council of Nigeria (PCN). The official website is https://pcn.gov.ng/
2. Oil and Gas Manufacturing: Permits for oil and gas businesses from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC)). This is a federal body and the official website is https://www.nuprc.gov.ng/

Fire Safety Certificate

Manufacturers must obtain a fire safety certificate from the Federal Fire Service to ensure compliance with fire safety regulations. This applies to all manufacturers. It is regulated by the federal fire service with various branches in each state under the ministry of interior and the official website is https://fedfire.gov.ng/

Local Government Permits

All manufacturers must obtain operational permits from the local government authority where the manufacturing facility is located such as Business premises registration, community impact permits, and signage permits. This is a local permit and it can be access at the manufacturers state of operation.

Nigerian Investment Promotion Commission (NIPC) registration

This is required for foreign manufacturers. This is a federal body and the official website is https://www.nipc.gov.ng/

Nigeria Export Promotion Council (NEPC) Registration

This body regulates export license and manufacturers that will be involved in export activities are expected to register with this body. This is a federal organization and the official website is https://nepc.gov.ng/

Compliance with Labour Laws

This applies to all manufacturers, and it is important that as a business you comply with the applicable labour law. This law covers areas such as employment contracts, wage payments, working hours, maternity leave, annual leave, insurance, registration of employees with certain regulatory bodies like Pension Reform Act (PENCOM) occupational health and safety standards. Labour law is regulated by the Federal Ministry of Labour and Employment (a federal ministry) and the official website is https://labour.gov.ng/

Central Bank of Nigeria

This is a federal body with branches in each state. Manufacturers need to comply with Central Bank of Nigeria (CBN) policies regarding transactions involving foreign currency where they require it, such as Form M where the manufacturer imports items used for its business. The official website is https://www.cbn.gov.ng/

Federal Ministry of Industry, Trade and investment

This is a federal body and it helps to protect the brand and some other regulatory bodies require trademark, patent and design registration. This applies to all manufacturing activity. The official website can be accessed at https://www.iponigeria.com/

The Ministry of Interior

This is a federal regulatory body with offices nationwide. Manufacturers who employ or partner with foreigners need to obtain a business permit, expatriate quota and Combined Expatriate Residence Permit and Alien Card (CERPAC). Also, where the manufacturer is bringing in a foreigner for a short visit then a visa on arrival is also required. The official website is https://interior.gov.ng/

The National Insurance Commission (NAICOM)

Due to the delicate nature of manufacturing businesses, insurance is a key aspect of it and it is a very important regulatory requirement for operation. NAICOM, a federal body regulates these insurance activities. Manufacturers that have vehicles must insure such vehicles and the same applies to its assets, employees and products. This helps to mitigate against loss and other unforeseen situations. You can access the official website at https://www.naicom.gov.ng/

What is the timeline for obtaining these licenses

The timeline varies depending on the type of license. While some can be processed within weeks, others, such as environmental permits, may take several months.

Conclusion

Manufacturing business are broad and regardless of the area you are in it is important that you do not operate without the required licenses as it can result in fines, legal actions, business closures, or reputational damage for the business.

If you need help being compliant as a manufacturer in Nigeria, please reach out to us.

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