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CLB Inaugural Public Lecture


GUEST SPEAKER: Judge Bola Ajibola SAN, QC, Litt.D. CFR, KBE

When I received this invitation to deliver the inaugural lecture on behalf of the Centre for Law and Business from the Hon. Justice Kayode Eso (CON), to me that is a command.A command not in the judicial sense of it but one that is embedded in our noble tradition and culture as Yorubas. When an elder gives you an instruction in this part of the world, good or bad, it must invariably be obeyed.

My admiration and respect for Justice Eso and what he stands for in life is quite immense, it is for this reason that I have always referred to him in a very revered manner as my elder brother (Egbon).

In those days within the movement of the Nigeria Bar Association and in the parlance of our English usage, when a person has done very well inLife, we invariably refer to him as a ‘’correct man’’. In this regard and on this occasion let me refer to Justice Eso as a correct man.

In addition, let me say that I am morally compelled to be here because in essence I am paying for the dinner, which I had few years ago between 1985 and 1991 when I served as the Attorney General and Minister of Justice of this country. I do not know how many times I had to call on Justice Eso to carry out various assignments for the nation during the time that I occupied that office. So to give this Lecture, is a matter of quid pro quo.

Having briefly and introductorily dealt with all these pleasantries, which to me are facts relevant to the fact in issue; I shall now deal with the fact in issue. The topic of the day is; LAW AND ECONOMY – CHALLENGES AND PROSPECTS FOR LAW AND BUSINESS. According to the letter I received, the aim of this Lecture is ‘’to raise the general awareness of the role and function of Law in the society, in all areas of human endeavour’’. It went further to state that ‘’it is hoped that the Lecture would highlight and indicate how Law can be used as an instrument of growth, development, control and positive management of the economy.

It would also indicate the present shortcomings of the legal system including the judiciary in relation to business and the economy and indicate the way forward. The letter stated further: “As we all know, the economy has been one of the most difficult sphere of our national affairs to manage. This is part of our contributions to finding solutions to the problems’’.

Our first approach as regards this topic is to examine the interplay of law with economy and business. While I need not waste much of your time in defining these three major words, as they are words of daily and common usage in our lives, it will still be pertinent to state concise words what they connote

The word ECONOMY according to 20th Century Dictionary is administration of the material resources of an individual, community or country. The word BUSINESS has multiple meanings but with regard to our task on this topic the relevant definition of a business is ‘’a commercial or industrial concern’’. Again for the purpose of this lecture, LAW has to be defined as the rules established by the authority of a state for regulating the behavior of members of such state.

Our economy is structured on the pattern of the Western World. We can therefore describe our economy as a free enterprise governed or controlled by market forces. In a word, we are in a free market economy. The economic principle underlining this philosophy stems from the publication of Adam Smith in the year 1776 in his book, ‘’The Wealth of Nations’’. The book constitutes the foundation of Laissez Faire philosophy that national prosperity is best served when private enterprise is least interfered with by any given government. In other words, Government has no business in business. In 1884 John Stuart Mill updated and fortified the philosophy of Adam Smith’s Wealth of Nations in his own book titled ‘’Principles on Political Economy’’. The book considerably influenced political, legislative and judicial decisions in the 19th century particularly in the field of contract, trade and industrial relations.

In December 1974, the United Nations General Assembly tacitly gave these economic principles it’s blessings with its Charter of Economic Rights and Duties of States adopted that year. This Charter was aimed at promoting ‘’the establishment of the new international economic order based on equity, sovereign equality, interdependence, common interest and cooperation among all states irrespective of their economic and social systems’’. The charter codifies norms for economic relations between western states and socialist states and it is a major extension by the international community of its controls over unregulated economic activities, which had hitherto dominated the world scene.

Here in Nigeria, our economy was relatively sound when we achieved our independence in 1960. At that time our economy was wholly dependent on our Agricultural Products. We were exporting considerable quantities of cash crops like cocoa, cotton, groundnut, ginger and other cash crops. The British Colonial Government did not leave us with any deficit or international debt that we are now facing which is up to the tune of over thirty billion dollars. At least our treasury was not empty then, nor did we need to plead for the rescheduling of our National debt.

Fortuitously we could feed ourselves then because we were self sufficient in domestic food production. Incidentally, we have not at that time cultivated the terrible culture of passionate taste for foreign food and imported foodstuff like wheat for bread and rice, which dominate our dining tables at the present time in our homes. This economic honeymoon continued for at least a decade before our fortune turned to misfortune paradoxically as a result of the oil boom. Even then, things were not terribly bad for the next decade between 1970 – 1980. We were then reeling in the decadence of our new fortune brought about by the petrol-dollar. We could afford then to hold All African Games and Africa’s Festival of Arts. During this period we built so many of the infrastructure that we can now boast of today. As a matter of fact, we should not forget that the cliché in those days was that our problem was not earning money but spending it. In the year 1979 the military under the present President Olusegun Obasanjo handed over the reins of government back to a democratically elected government of Alhaji Shehu Shagari. Even at that time we were still in the black and our treasury could still boast of over five million dollars in our reserve.


However, by 1983 when the Military took over we were already in the red to the tune of three billion dollars owed internationally. Those three billion dollars has now translated into over 30 billion dollars. Even though, between those periods till now we have paid both in terms of interests and capital over 20 billion dollars. Thus, as of today and paradoxically with our abundant riches from oil and in fact as the sixth largest oil producer in the world, we are still a debtor nation.

How did we come about owing such a huge sum of money in the midst of plenty? There are so many factors contributing to the misfortune. To start with, do we owe as much? Have we critically looked into the books to see that the books are fair to the debtors as well as the creditors? Unfortunately I am not in a position to proffer a definite answer. May be our foremost Economists and seasoned Accountants will assist us on this. But this much I know, that theses debts were owed because of our reckless, negligent and irresponsible acts, mostly due to the fact that we approved and executed bad contracts which are heavily padded to our detriment and in some cases as a result of breach of those contracts by us in irresponsible and dubious manner and without a thought or care for the consequences or negative impact on the life of the common man.

Here comes the need for our law and legal experts to come to our aid. Most of these contractual relations were entered into and executed with the collusion of some of our legal experts who for the sake of immoral considerations called corruption have compromised the government’s position adversely.

In the middle of 1980’s when I served as Minister of Justice, I noticed a lot of these malpractices which enabled me to group some of the officers involved in this exercise into four categories; those who are guilty of non-feasance because they know little or nothing about their assignments and could therefore be considered as mentally porous officers; those that should be accused of misfeasance because although they are very active but are bunglers committing mistakes and errors, I call them stereotype officers knowing fully well that at the end of the month they will be paid their salary whether they perform their duty well or not; the third group are guilty of malfeasance, they are the bright and brilliant officers. They know what to do and what not to do but they chose to carry out their assignment wrongly because they are corrupt. The fourth group is the good ones; they are dedicated, committed, honest and diligent in their business.

As a result of my observation above, I set up a Contract Vetting Commission under the able chairmanship of Professor Ayo Ajomo who was then the Director General of the Institute of Advanced Legal studies. The programme was to assist the non-feasance as well as the misfeasance officers, since there is nothing you can do about the malfeasance officers than to sack them. This commission worked in collaboration with the U.N.C.T.C. of the United Nations. The commission produced a positive guideline on how to deal with any draft contract before the same is signed. Please do not ask me what has happened to that guideline at the moment in the Ministry of Justice because I just do not know. This is where law can come in to fill the gap of preventing bad contracts from being executed, particularly those that are unfavourable to our governments.

We are today living in a very small global village. Business men all over the world are very careful and selective as to where they could possibly establish their business. The first thing on their agenda is to ensure that the country they are going to trade in or with is a peaceful country, devoid of unrest, violence or terrorism and where law and order and peace reign supreme. The second thing they would like to know is whether such country has the necessary wherewithal in terms of infrastructure with which to carry on their business; that such country has good roads, abundant electricity, pipe borne water, adequate schools and hospitals as well as good means of communication and transportation. Thirdly, the business man wants to know that such a country is one with good governance; with a settled political structure under a democracy. Fourthly, investors are equally keen to know about the judiciary, the rule of law, and the independence of such judiciary. In addition they will like to be informed whether such judiciary is free from either undue interference or corruption. In some cases they want to know the attitude of such countries in resolving disputes by independent Arbiters such as providing for arbitration, mediation, conciliation and any other form of alternative dispute resolution. Finally, businessmen will invariably ask for the country’s tax regime and whether they have adequate law to protect their business interests.

Unless we in Nigeria are able to meet all these requests of the world businessmen as enumerated above, our desire and efforts to encourage them to do business in Nigeria will remain purely illusory. These requests and demands are matters to be tackled by both the private and public sectors of our economy. But they are sine qua non to a successful and buoyant economy.

All that we need to do for the rest of this paper is to examine in seriatim those prerequisites as already mentioned.

Investors and businessmen alike all over the world try to avoid countries where law and order is a problem. Business can only grow in an environment of peace and security within any country. Investors are worried that a country constantly engrossed in restlessness and violence can never be a good breeding ground for investment or for any possible growth. It is for this reason that we as a nation must endeavour to find solutions to the perennial problems of restiveness all over our country especially in the Niger Delta area, Plateau, Benue, Kano and Kaduna states. I read recently that many of the enterprises well established in Ivory Coast before now are now being moved to Republic of Benin where there is relative peace. Since the civil strife started in Ivory Coast the African Development Bank had also moved from Abidjan to Tunis.

Peace and security in any given nation is a prerequisite towards development and growth of its economy. It is difficult if not impossible for any economy in any given nation to grow without ensuring that law and order is firmly on ground. Examples abound all over the world. A situation of crisis, chaos and violence had never been a fertile ground for the development of any economy.

If all our laws are enforced and obeyed, this country will be free from all the violence, hostilities, resulting in huge destruction of lives and property in so many parts of it. These disruptions have had its toll invariably on our economy. People say that it is not unconnected with the fact that a hungry man is an angry man and when youths don’t have regular means of livelihood because they are jobless, they find themselves easily lured into violent activities. There is no doubt that an empty hand is the workshop of the devil. Can it be said that law has not tried its best to curb such excesses and violence? In my view we can’t lay the blame at the door of the law. The law went far enough by prohibiting and preventing and even imposing sanctions for such violent acts.

The major problem is the implementation of those laws. The nation is adequately fortified with our law enforcement agents; the Police, Military, Customs, Immigrations, are all there to maintain law and order. Whether this is being efficiently carried out is another question, which must engage the minds of our discussants. But no matter how we look at it, the issue of corruption will loom large in this discussion. This will be addressed later.

For example we have adequate provisions for dealing with all crimes and offences pertaining to disturbances of public law and order. Chapter 6 of our Criminal Code Act deals specifically with offences against public order, such as treason, treasonable crimes, and treasonable felonies promoting inter-communal war e.t.c.

Similarly in the penal code of the northern states there are ample provisions therein to discourage and deal with cases of public disorder and violent crimes. Chapter XXVI deals with offences against the state such as treason, treasonable crimes, inciting to mutiny e.t.c


Chapter XXVII of the same penal code deals with sedition, inciting disaffection to the government, inciting hatred between classes e.t.c. In short our laws contain enough provisions to deal with most of these criminal disturbances and violence before and after such acts. However, in my view, it is nothing but the implementation of these laws that is at times grossly inadequate to deal effectively with many of our problems.

Here you must permit me to blow my trumpet because I once heard it said, ‘’let your light so shine before men that they may see your good works and glorify your father who is in heaven’’. During my period in office as Attorney – General and Minister of Justice we embarked on a huge project of law revision, law reform and even law reporting.

After the amalgamation of Northern and Southern Nigeria in 1914, the codification of the laws in both regions became necessary but this did not materialize until 1923 when Nigeria was then known and called the Colony and Protectorate of Nigeria. The revised edition of the ‘’Law Ordinance’’ did not take place until 25 years thereafter. This was carried out by Honorable Neville John Brooke, a former judge of the Supreme Court of Nigeria who was appointed a Sole Commissioner for the purpose of preparing and publishing the revised edition of the Laws of Nigeria in 1947, titled ‘’Laws of Nigeria 1948’’.

Another revision of that law was produced in the year 1958 titled ‘’Laws of the Federation of Nigeria and Lagos’’. This exercise was carried out single handedly by Sir Donald Kingdom Q.C. Unfortunately nothing was done by way of revision or codification of our laws when we got independence in 1960 or even in 1968 which was a decade after the revised edition. It was not until 1990 that another ‘’Laws of Federation of Nigeria’’ was put in place, a period of 32 years since the last exercise was carried out.

I am happy to say that these were done during my time as Attorney General and Minister of Justice of Nigeria. But I must not claim the glory and success of that effort alone; we must remember the efforts of our great judges and lawyers who contributed to the success. Mention must be made of Justice G.B.A Coker who was chairman of the Law Revision Committee. Other members of the Law Revision Committee are Late Justice B. O. Kazeem, Justice C. A. Oputa, Justice Olakunle Orojo CON, and Justice Umaru Atu Kalgo. I must not forget here also to mention the effort of the task force set up in my ministry for the implementation for this exercise which was chaired by myself and Doctor J. B. Ajala as the Vice Chairman, together with my able Assistants who are at the moment making their marks quite impressively in the legal field in Nigeria, in person of Messrs Awa Kalu SAN, Attorney General and Commissioner for Justice of Abia State, and Professor Yemi Osibanjo SAN, Attorney General and Commissioner for Justice Lagos State. I must not also forget many of our officers in the Ministry of Justice who cooperated and assisted us in making that assignment a success.

But that was not all; from the onset of my appointment we organized the National Conference of Law Development and Administration popularly called ‘’LAWDEV’’. Our plan was to make the main issues arising from the seminar the object of our subsequent law reform projects. In 1988 I commissioned the Nigeria Law Reforms Commission to review all the statutes of general application in England and Wales before January 1 1990, because they were out of date not only in England and Wales (their place of origin) but also out of touch with our legal system. Consequently we were able to get rid of all these obsolete laws during my time.

During this period in question we organized conferences, workshops and seminars to highlight many areas of our laws in need of reforms, some of them are:

  1. Reform and Unification of Nigeria Criminal Law and Procedure headed by Justice Kabiru Whyte.
  2. Reform of the Nigeria Company Law organized by the Nigeria Law Reform Commission, which eventually organized a workshop on company law reform that eventually brought about the Companies and Allied Matters Act of 1990.
  3. Law reforms relating to bank frauds and other financial malpractices headed by Justice C. A. Oputa.
  4. National seminar on corruption and other economic crimes headed by Honourable Justice Kayode Eso CON, the by – product of which is now the law that established Independent and Corrupt Practices Commission (I.C.P.C).
  5. Seminar organized to review laws on compensation, restitution and other remedies for victims of crimes headed by Late Justice E. B. Craig.
  6. Another national seminar organized on the law in relation to women and children in 1989 and
  7. National seminar on Drug Law Enforcement.

As regards the issue of infrastructure as an incentive to attract businessmen into our country, this should not be a serious drawback for the country, although we are not yet self sufficient in the provision of many of these amenities.

Businessmen know fully well that they are coming into a third world, however a minimum expectation need to be met to facilitate the participation of such investors in our country. The most serious problem still faced by the country is in the area of energy as an impediment affecting supply of electricity and fuel to all users, paradoxically; this ought not to be the case in an oil producing country. According to section 15 (3) (a) of the 1999 constitution

‘’It shall be the duty of the state to provide adequate facilities for and encourage free mobility of people, goods and services throughout the federation’’.

There is the all time argument that this provision is non justiciable. However there are areas where the government has made considerable progress in the recent times. Our national carrier, Nigeria Airways is now moribund. The privatization of the Aviation industry is a commendable move and effort in the right direction and with the introduction of the global satellite mobile telecommunication system, millions of Nigerians are now able to use the mobile telephones all over the country even while riding ‘’Okada’’ motorcycles.

Because of the open and free market nature of the present world, which now includes big countries like China and India, businessmen want to see good governance firmly established in places where they intend to trade. In some cases their bankers are always insisting on such environment. Many banks and financial organizations of the world are most reluctant to grant any loan to any country that is unstable and without good governance. Along with this request is the need that such country must be in the practice of democracy as opposed to totalitarian regime or dictatorship.

I was at the annual seminar of the London Court of International Arbitration in May this year. Many of our colleagues who are arbitrators from different parts of the world assembled in Tinley Hall. An informal discussion centered on those countries that are suitable and acceptable for arbitration or litigation and those that are not. The idea was to advise their colleagues and users accordingly. Businessmen and investors alike dislike countries where their courts reflect their internal nationalism in their judgment against the interest of foreigners who are investors, and once that is noted in the practice and behavior of the court in any given country the news travels fast like wild fire thereby discouraging investors from going to such countries. There is at least one good news that during my tenure of Officer as Minister of Justice, I put in place Arbitration and Conciliation Act of international standard, adapting it to UNCITRAL rules and UNCITRAL model laws. We hope that the law will continue to be attractive and serve as incentive to investors for carrying out arbitral proceeding in Nigeria. In addition to all these, businessmen are keen to know whether within the concept of our judicial system, the rule of law reigns supreme.

It is difficult to write this paper without making mention of the problem of bribery and corruption in our society because it is a grave social menace that the present government is seriously battling with. Why and how the problem of corruption deeply engulfed our societal interaction and behaviourism may be questions to be unraveled by psychologists and sociologists alike, but as far as we are concerned in the legal community, tremendous efforts have been made in the past to fight and stem these economic drawbacks. Although it is not difficult to claim that corruption is not indigenous to us, nevertheless in the past, Nigerians have been used to expressing appreciation for any good act done to them by way of presenting gifts. But even in such cases, it was always a presentation of gifts in appreciation of a PAST deed. That in itself gradually moved into the realm of gratification.

The modern day corruption, I make bold to say, was largely imported into our country after our independence when we started to award contracts. Most of the contractors were foreigners and they started to ‘’teach’’ our executives in public and private sectors how to ‘’LOAD’’ or ‘’PAD’’ any contract sum to include enough money to be salted away for them in other parts of the world. But our people soon graduated by becoming experts in the field because they now tell the foreigners the sum of money they want as their ‘’padding or loading fee’’. Consequently corruption took a very deep root in our societal life.

Whatever may be the controversy behind the validity of our current Constitution as to whom constituted, ‘’We the People of the Federal Republic of Nigeria’’ there is no doubt that the 1999 Constitution of the Federal Republic of Nigeria still governs us as of today and is still our Fons et Origo. Anything to the contrary will create constitutional crises, which we can afford at this moment. Section 15(5) of the Constitution makes it abundantly clear that:

‘’the state shall abolish all corrupt practices and abuse of power’’

There are other similar provisions guiding directly and indirectly against corruption in that Constitution. But in addition to what is contained in our fundamental law, our substantive and adjectival laws provide explicitly for the prohibition of giving and receiving bribery or gratification or being indulged in any corrupts act. Chapter 12 of our Criminal Code Act particularly from sections 98 – section 111 deals with all forms of corrupt practices and abuse of office. Contained in these sections are offences against the administration of law and justice and against public authorities. In addition to all these and in order to deal decisively with the increasing menace of corruption, the present government passed into law an Act establishing the Independent Corrupt Practices Commission (ICPC). And these commissions are seriously battling, with stress and strain, against this heinous problem of corruption in our society.

Corruption is a huge devouring monster that has destabilized, distorted and destroyed our economy to a very large extent. It is a cankerworm that has eaten very deep into our economic fabric in Nigeria, which is one of the big reasons why our economy cannot move ahead. For years we maintained our position as the world most corrupt country. It is only recently that we conceded the unenviable position of Bangladesh. We have been told that corruption in the world amounts to 2.7 Billion Dollars annually.

I have been itching to know what constitutes Nigeria’s percentage in this area. While serving as the Attorney General, the Government was always eager to promulgate Laws for the Economic, Social, and Political development and benefit of the country. But when the laws are presented in drafts the cabinet members are usually skeptical about the possible efficacy of such laws. They told me in those days that the crooks and the corrupt ones are invariably one step ahead of me as the law drafter. At times they insinuated that such laws were being promulgated to make more money for the crooks and corrupt elements in our society and concluding that I was just preparing another money making documents for the crooks. Such comments are enough to dampen the spirit of Law Officers trying to carry out the onerous task of nation building. The big question is whether the law has failed us to progress effectively in the development of our economy? I don’t think so, my belief is that we failed the law and incarcerated it into the present impotent situation. The few crooks amongst us made the law to fail in its attempt and determination to improve the economy of this nation.

All the well-meaning programmers of the government now and in the past have been one way or the other stultified and emasculated because of the activities of the few crooks amongst us. At the beginning of time, there were only a few rats in the house and with time the rats have not only multiplied in number but in size so much that they have now pushed the owner out of his house. In this proverb the government is the owner of house and the rats are the crooks and the corrupt ones.

You will remember that during the colonial era, we used to have sanitary inspectors, many of you might not have heard about them. Why did this good sanitary service stopped? Imagine such an attempt now. To begin with, half of the sanitary inspectors will be fake officers and both the fake and the genuine ones will go about taking bribes left, right and centre. Our entire citizenry must be blamed for the sin of corruption. We all talk glibly about corruption in the Police and Customs. Let me ask a simple question, who are the people bribing them? We need a strong political and social will by our people to stem the practice of corruption in our society. In our law both the giver and the taker are guilty of the offence of corruption.

When you travel on our roads nowadays, the fumes of vehicles that are not road – worthy envelop you. In this country, we used to have vehicle inspection officers to ensure the road worthiness of vehicles on our roads; from experience this exercise helped the situation on our roads. But later it was soon discovered that theinspections only enriched the vehicle inspection officers in collecting their bribes. What about the issue of driving license? I know of a chap who came to my home late one evening and had to go back to his own home later that night. Because I’ve seen him with a driving license, I offered him my car to drive home. It was then that he confessed to me that he could not drive, that he merely ‘’bought’’ the driving license without taking any driving test. But he improved on his sad confession that he had since obtained a leaner’s permit. I was furious with him. He pleaded with me to calm down that even the blind and the crippled people posses driving licenses.

An alien businessman man intending to set up a business in Nigeria was, before now, beset with lot of difficulties and bureaucratic bottlenecks before he could establish his business. Apart from the incorporation and registration of the company under the Companies and Allied Matters Act, he is also further confronted with the issue of bringing into Nigeria, his workers or personnel under our Expatriate Quota System. He has to pass through many other hurdles that consume time and money. Even attempts at purchasing a property for his business is not an easy task; the problem of obtaining Governor’s Consent or Certificate of Occupancy is also there. If he had to seek for tax exemption that could be another serious hurdle to surmount. Some of the laws and regulation that he has to comply with are:

  1. Companies and Allied Matters Acts 1990
  2. Foreign Exchange Monitoring and Miscellaneous Provisions Decree No. 17 1995
  3. Investment and Securities Decree No. 4 1994
  4. Immigration Act, Cap 17 LFN 1990
  5. National Office of Technological Acquisition and Promotion Act, Cap 17 LFN 1990
  6. Industrial Inspectorate Act, Cap 180 LFN 1990, and many others.

However government has established a procedure where all these problems could be streamlined at the moment so that the businessman could obtain all he requires at a one-stop shop, which is the Nigeria Investment Promotion Commission. This is made possible by the promulgation of Nigeria Investment Promotion Decree No. 10 of 1995.

Having said all these let me conclude this short paper by sharing with you my experience with regarding the stock exchange market. Despite all the vicissitudes of our economy and with all its ups and downs, and regardless of all our social turmoil and political upheavals, virtually since independence our stock market has remained very profitable and constantly rewarding. That to me is curious. It shows that in Nigeria two plus two may not be four, it may well be twenty-two.

Thank you for listening.

Judge Bola Ajibola SAN, QC, Litt.D. CFR, KBE at Centre for Law and Business June 2004