NIGERIA Trends and Developments Contributed by: Ozioma Agu, David Olajide and Onyinyechi Isikaku, Stren & Blan Partners
Stamp duties Another important consideration is the requirement for proper stamping of transaction documents under the Stamp Duties Act 2004, as amended by the Finance Act 2023. Stamping is not merely a fiscal obliga- tion: an unstamped document may be inadmissible in Nigerian courts, except for the limited purpose of stamping upon payment of penalties. In line with the Stamp Duties Act 2004, ICAs and other security docu- ments are regarded as dutiable instruments. Dutiable instruments executed in Nigeria must be stamped within 30 days for ad valorem instruments and within 40 days for fixed duty instruments, failing which pen- alties and interest will apply. Instruments executed outside Nigeria are expected to be stamped within 30 days of receipt in Nigeria. However, once the Nige- ria Tax Act 2025 (“the Act”) takes effect on 1 Janu- ary 2026, every instrument executed in Nigeria and chargeable with duty under Chapter Five of the Act must be stamped within 30 days of execution. The implication is that even the most carefully drafted ICA or security agreement could be rendered unenforce- able if it is not duly stamped. Lenders must therefore make adequate provision for the costs and timing of stamping to preserve enforceability and avoid expos- ing their rights to unnecessary risk. Foreign exchange controls and repatriation Where foreign lenders are involved in Nigerian trans- actions, compliance with foreign exchange controls is indispensable. The Central Bank of Nigeria (CBN) requires that foreign loans be registered through the issuance of Certificates of Capital Importation (CCI), which must be obtained within 24 hours of the inflow of loan proceeds through an authorised dealer. A CCI secures the lender’s right to repatriate repay- ments, interest, and capital. Without it, foreign lend- ers may face challenges in transferring funds abroad or may even be unable to repatriate their investments. Accordingly, ICAs should not only address which par- ty bears the responsibility for obtaining the CCI but should also allocate risk relating to currency convert- ibility and transferability, as these matters are central to the lender’s ability to realise the economic value of the financing.
stack enhances confidence and fosters collaborative decision-making. Permitted payments and leakage This clause regulates what payments borrowers may make to junior creditors, particularly in distressed situ- ations. The objective is to prevent “leakage” of funds that could otherwise service senior debt. For example, the ICA may allow junior debt payments only if no default exists under the senior facilities. By ring-fencing cash flows in this way, the ICA safe- guards the priority and repayment expectations of senior creditors. Amendments and waivers Finally, ICAs must establish clear rules on how amend- ments or waivers are approved. While senior credi- tors often hold greater influence, significant changes, such as altering payment priorities, usually require either unanimous consent or approval by a substan- tial majority across all creditor classes. This prevents unilateral changes that could prejudice the rights of certain lenders. Perfection and registration of security interests One of the most critical issues in Nigerian intercredi- tor arrangements is the perfection and registration of security interests. Under CAMA 2020, charges creat- ed by a company must be registered at the Corporate Affairs Commission (CAC) within 90 days of creation. If this requirement is not met, the security is rendered void against a liquidator or other creditors, even if it remains valid between the parties. Beyond CAC reg- istration, different asset classes attract specialised requirements. Mortgages over land require the gov- ernor’s consent under the Land Use Act and must also be registered at the relevant land registry. Secu- rity over ships, aircraft, and intellectual property must similarly be recorded in their respective registries. In practice, these processes can be time-consuming and prone to delays or administrative bottlenecks, with the result that lenders may lose their priority ranking or find their claims subordinated despite the provisions of the intercreditor agreement.
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