Proshare Logo
   Market Date: 22-08-2014   
Archives Bond Market Frauds & Scandals Market Updates MoneyIssues Mutual Funds NSE & Capital Market Opinion & Analysis Pensions Proshare Analyst Views Proshare Law Q & A with CEO Regulators Reviews and Outlook Taxation The Economy

Laws and Regulation Affecting Agricultural Commodities Trade In Nigeria. -

  Read (3854)

April 2, 2012

1.0          INTRODUCTION. 

Nigeria, having adopted the federal system of government has expressly agreed to be governed on a multi level system of government and by implication a multitier legal system.

Like every of the country’s life agriculture commodity is not exempted from the multi  tier legal system for which reasons the trade is governed by a plethora of laws and regulations at both the federal and states levels, as a matter of fact some local government bye laws do also impact on the business.

This paper is specifically for an examination of identified laws, regulation and rules relating to the trade and marketing of agricultural commodities in Nigeria.

This paper deals with the situation of things at the other tiers of the polity i.e. State and Local government level (Where applicable).

The paper would also look at non-Statutory regulation and rules at the affected levels of government i.e. States and local government.

In view of the fact that Nigeria operates a Federal system of Government  with the Constitution  allowing the different tiers of government differing level of interest in the regulation of the trade,tit is necessary that the position of things should be jointly and concurrent addressed  to allow for comprehensive understanding of the issues.

The regime of laws, rules and regulation governing the trade and marketing at the other tiers of government is a complexity comprising of the constitution; statutes; common law; Rules and Trade practices arising from trade usage. 


The current operative Constitution of the Federal Republic of Nigeria promulgated  as Decree

No .24 of 1999 is the most supreme legislature authority in Nigeria and therefore it is the most

Supreme law.
The aspects of the constitution affecting commodities trade at the state level are identified as follows with my accompanying commentaries.

(a)   S.I (1)  which is generally referred to as the supremacy clause state

“This Constitution is supreme and its provisions shall have building force on all authority and persons throughout the Federal Republic of Nigeria”.

The provision of this sub-section of section 1, confirms the authority of the constitution as the most supreme law from which others laws in Nigeria derives its validity.

(b)  S.I. (3). States:

“ If any other law is inconsistent with the provisions of this constitution, this constitution shall prevail and that other law shall to the extent of the inconsistency be void”

The effect of this Sub-section 3 of to further solidify the position of the constitution as the fans from which the authority and validity of all the other laws (including statutes; rules and regulations) flow, and it is against the provision of the constitution that the validity or otherwise of any other law is measured.

(c) S.2(2)

This sub-section of section 2 of constitution introduces confirms the political structure of Nigeria as  a Federal consisting of the Federal and State tier of Government.

(d) S.4(6)

This Sub-section of section four confers on the States Houses of Assembly, the power to make laws subject to the limitations as contained in the constitution.

(e) S.4(7)

This sub-section of section 7 makes  direct provision for the extent of the powers of the State Government in respect of the enactment of  enforcement  of certain laws and regulations, particularly a-c of subsection 7 i.e. S.4 (7a).

“any matter not included in the legislative list set out in PART 1 of the 2nd  schedule of this constitution”.

The legal effect of this provision is that any item that is not on the exclusive legislative list as contained in part 1 of the 2nd  schedule is with the authority of the State either concurrently with the Federal or exclusively to itself.

S.4 (7b)
“any matter included in the concurrent legislative list set out in the first column of part II of 2nd schedule of this constitution to the extent prescribed in the 2nd column opposite thereto”.

The legal implication of this provision is that it set out list of subject upon which both the Federal and States Houses of Assembly have authority.

However it should be noted that were the  (2) tiers of government have concurrent authority the provision of S.4 (5)  becomes operative where there is a conflict or overlap in the concurrent authority. 

Sub-section 5 of section 4 States

“if any law enacted by the House of Assembly of a State is inconsistent with any law validity made by the National Assembly, the law made by the National Assembly ,the law made by the National Assembly  Shall prevail and that other law shall to the  extent of the inconsistency be void”.


In respect of the provision of S.4 (5) of the Constitution, the key words are:

(1)  Inconsistent i.e. the law made by the state must be in conflict with that of the Federal.

(2)  Validity here is to form and procedure.

(3)  Prevail : this word shows the stronger strength of Federal  law lasted against that of the component units.

Of the items listed in the concurrent legislative list as contained in part II  of the second schedule the one specially relevant is item 18, which allows the States authority to make laws within the jurisdiction of the states) with respect to industrial, commercial or agriculture development of the state.

Opinion : I am of the opinion that the provisions of the constitution relating to the devolution of power between the different tiers of government are expected in a Federal system of government,



There are similar provision in the criminal laws of the respective states regulating and criminalizing some of the actions that may be arise from the trade and marketing chain, example of such is a situation where payments are obtained and goods are not supplied.

COMMENT: As mentioned  earlier there is a major manifested deficiency with our criminal justice system i.e. under our criminal justice system, when an accused is found guilty of having committed an offence, there are two .(2) option of penalties available i.e. a fine in monetary term or a term of imprisonment in lieu of the fine or both.

The major problem with the above is that in the case of the monetary penalties, the money is paid to the State , while in the other case, the person merely goes to jail, in both case, the victim(s) of the criminal acts is not compensated in any manner, particularly financially which is of more relevance to the businessmen victims then any other  thing.

OPINION: special provision should be made and or included in criminal statutes making financial compensation possible to the victim from accused.

In   Ondo State, because of the perceived weakness of the general criminal law, the government in 1989 promulgated a commodity specify law therein i.e.


This Edict which was promulgated on the 20th day of January, 1989 to redress the noticed and highly disturbing fall out of the liberalization of the cocoa trade and marketing chain, whereby sellers obtain money and advance towards produce, refuse to deliver the produce either in full or part and refuse to return the money collected or the utilized part thereof.

The Edict has 6 sections, but the most important and relevant of which are:
(1) Section 2 creating and defining the offences created by the Edict.
(2) Section 3 prescribing the punishment (s) for offences created.
(3) Section 4 improving the court to order a forfeiture of property.

 OPINION: Pursuant to the penalties prescribed for the offences created by the Edict by virtue                  Of S.3, it seem that the Edict also falls into the same that it seeks to redress i.e. it is more pro-government  then pro-victim i.e. the fine ( not less than twice the sum in contention) is forfeited for delinquent act this penalty is anti- business.

The power of the court to trace and order forfeitures seems by the provisions of the wording s of S.4 (1) i.e.” ………. Property proved to have been acquired with the money so advance ……… “   to be Limited to powers over only the property that could be proved to have come from the money advance for the produce or proceed thereon. This  provision seems limited in effect compared with the remedy available in the alternative to the victim of he has sued in contract for breach of contract and all personal properties of the defaulter would be available for attachment towards execution of redress.

COMMENT: Though  the major criticism against the Edict when it was promulgated was that the issue being address by it was already covered by the criminal law and the common law of contract.

I think looking at the situation on ground then, and the fact that produce business was the main stay of the ondo State economy there was the need to bring some sanity into the trade, but some of the major defect of the Edict which need to be reconsidered include

(1) The Edict did not make specific provision relating to a time specify trial period is recommended that in laws like this it should be period of time e.g. 30 days from the date of arrangement or such other reasonable time.

(2) The Edict did make provision for compensation to the victim(s).it is recommended that the law should be amended to accommodate pecuniary compensation to the victims from the fine paid to the government or by the attaching  additional properties of the defaulter as consequential order.

This law is certainly an innovation capable of been copied by other states.

6.0  CONCLUSION: From an examination of the laws and regulations pertaining to the marketing and trade of commodities in Nigeria at the states level, it could be seen that there is need to review  aspects of the law particularly to bring them  up to  date in view of the fact that most of them are out dated. 

Commendations should be made particularly with regard to the efforts of the Ondo State government in the promulgation of Edict No. 1 of 1989 notwithstanding the noticed short comings referred to above.


DISCLAIMER NOTICE: This Legal Alert is a free educational material, for your general information and enlightenment ONLY. This Alert, by itself, does not create a Client/Attorney relationship. Recipients are therefore advised to seek professional legal counseling to their specific situations when they do arise. Questions, comments, criticisms, suggestions, new ideas, contributions, etc are always welcomed. This Legal Alert is protected by Intellectual Property Law and Regulations and is reproduced by Proshare Nigeria Limited under permission for the Proshare online investment community. Broadstreet Partnership []

Tags: , 

Comment With Your Facebook or Yahoo! ID

Latest Articles

Latest news

About Us

Who We Are
Our Team & Partners
Corporate Governance
Advertise with Us
Subscribe / Unsubscribe
Site Map
News Feed - RSS
Contact Us
Message from CEO

News & Features
The Analyst / Market Data
Investor Relations Portal
The Regulator
Economy & Politics
Training Portal
Events Calendar
NewsStands - Online Reputation

Products and Services

Research & Market Intelligence
Analyst Services
Offers & Rights Support Service
Investor Relations Services
Alert & Subscription Services
Share Support Services
Proshare Consult
Event & Seminar Coverage
Market Directory
File a Complaint
News & Analysis

News from TheANALYST
Video News from WebTV
Money Market Updates
Opinions & Analysis
Nigerian Economy
Market Data
The Regulator
Discussion Forum

Subscriber Agreement
Privacy Policy
Data Policy
Copyright Policy
Comments in Site
Advertising Code
Conflict of Interest
Content Partnership
3rd Parties

Online Trading and Execution
Legal Support Services
Web/Technology Services
File a Complaint