Does Nigeria allow states to declare bankruptcy?

 

Does Nigeria allow states to declare bankruptcy?
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Tim Cella
used to work at several law firms

I am no expert on this topic. I’ve been involved and seen many bankruptcy cases in the State of Utah in the United States. Nigeria is associated with a lot of scams in the US. With that being said, many of us don't bother to read the financial reports published by our states. Yet, a state that is heavily indebted can easily go bankrupt — at least in the US — under Chapter 9 of the United States Bankruptcy Code. While the federal government provides some funds for state budgets, most states are not responsible for using the federal funds prudently. They are also not accountable to the people and their state legislature. Therefore, a state that borrows federal funds to pay its bills can end up with huge debts that will hurt it in the long run.

While the United Kingdom has a bankruptcy court, it is my understanding after doing research, that in Nigeria there is no bankruptcy court. Instead, insolvency cases are dealt with by the Federal High Court. However, the new insolvency law in Nigeria has specific classifications of company insolvency. As a result, Nigeria has a more limited definition of insolvency.

There are other laws that govern the financial affairs of a state. One of them is the Banks and Other Financial Institutions Act (LFN). This law regulates the consolidation, mergers, and transfers of financial institutions in Nigeria. The Act bans consolidation without consent, while the Nigeria Deposit Insurance Company Act protects the savings liabilities of approved banks.

The Ministry of Petroleum and Energy Resources (MPER) has been mandated to develop rules for the oil sector. The department of petroleum resources, which oversees the oil industry, has endorsed a number of these rules. However, Nigeria needs more guidance in insolvency laws in order to prevent oil firms from failing.

I hope you have found this information helpful.

If you or someone you know needs bankruptcy help in Utah - have them contact this law firm for a free consultation:

Ascent Law LLC

8833 S Redwood Rd Suite C

West Jordan UT 84088

(801) 676-5506

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Ascent Law is a law firm in West Jordan, Utah.This firm focuses on the following legal areas: Bankruptcy, Business, Estate Planning, Family, Probate,�...
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