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Nigeria has moved up 24 places to 145th in the latest World Bank’s ‘Doing Business’ report, and for the first time the country is recognized as one of the top 10 most improved economies in the world.
On the distance to frontier metric, Nigeria’s score went from 48.18 to 52.03 in this year, using comparable methodology. This improvement of 3.85 points means that in the last year Nigeria has improved its business regulations in absolute terms and narrowing the gap with the global regulatory frontier.
Nigeria implemented 5 reforms making it easier to do business in both Lagos and Kano over the course of last year in the areas of starting a business, dealing with construction permits, registering property, getting credit, and paying taxes.
The country made starting a business faster by allowing electronic sampling of registration documents, increased transparency in obtaining a construction permit by publishing all relevant regulations, fee schedules and pre-application requirements online, made transferring property more transparent by removing sworn affidavit for certified copies of land ownership records, improved access to credit information by guaranteeing borrowers the legal right to inspect credit data from credit bureaus and started to provide credit scores to banks, financial institutions and borrowers.
Most of the changes apply to only Kano and Lagos the two cities where the ranking was measured.
In the area of company registration, the Corporate Affairs Commission has moved to offer online registration and introduced new features such as electronic stamping of registration documents. Thus, entrepreneurs have been able to register their businesses much faster, within 24-48 hours, thereby saving cost and time.
The Government recorded a significant success by collaborating with the National Assembly to pass two new Acts, the Secured Transactions in Movable Assets Act 2017 and the Credit Reporting Act 2017, thereby strengthening the legal framework for access to credit for SMEs across the country – an important requirement for the success of SMEs.
Finally, it has become easier to pay taxes in Nigeria because taxpayers can file tax returns at the nearest Federal Inland Revenue Service (FIRS) office, and electronic payment and filing are gradually gaining acceptance.
Speaking with BusinessDay by phone, Frank Jacobs, president, Manufacturers Association of Nigeria (MAN) said “it is good news. It shows that people are seeing Nigeria as favourable destination for investment. It also shows that ease of doing business has improved. It is a reflection of what the government is doing especially in the aspect of Economic Recovery and Growth Plan (ERGP) and the implementation which is to improve the economy. I am happy about that.”
The Presidential Enabling Business Environment Council (PEBEC), was established by President Muhammadu Buhari in July 2016, with a mandate to sustainably and progressively make Nigeria an easier place to do business.
The PEBEC, is chaired by His Excellency, the Vice President Yemi Osinbajo, with the Hon Minister of Industry, Trade and Investment Okechwukwu Enalama as Vice Chair. Other PEBEC members include 10 Honourable Ministers, the Head of the Civil Service of the Federation and the CBN Governor.
Reacting to the development, Vice President Yemi Osinbajo, said.
“I welcome Nigeria’s improved performance. We are one of the top ten reforming economies in the world in 2017. After a decade-long decline in Nigeria’s rankings, last year the Government recorded a modest increase. This year, the President set an ambitious target of moving up twenty places in the rankings – I am delighted that we have exceeded his goal. Improving the business environment is at the heart of the Buhari Administration’s reform agenda. We are reinforcing our economic turnaround by a vigorous and active implementation of the Economic Recovery and Growth Plan (ERGP) so businesses operating in Nigeria can thrive and be competitive globally.”
In 2017 the membership of the ease of doing business council was expanded to include the Deputy Senate Majority Leader as representative of the National Assembly, representatives of Lagos and Kano State Governments as well as the Private sector. The Enabling Business Environment Secretariat (EBES) supports PEBEC in implementing its reform mandate.
Taiwo Oyedele, head of tax and regulatory services, PWC, said the improved ranking is a positive development and a reflection of the concerted efforts by government to improve ease of doing business in the country.
“This goes to show what can be achieved when there is political will and collaboration with the private sector. These efforts must be sustained and in fact accelerated to achieve even more positive results”, Oyedele said in an emailed response to BusinessDay.
The federal is already to consolidate on the gains of the improved business environment with the 2nd national action plan.
On September 27, the PEBEC, chaired by Vice President Yemi Osinbajo, approved a second 60-day National Action Plan (NAP 2.0) to consolidate reforms aimed at making Nigeria a progressively easier place to do business. NAP 2.0 will run from 3rd October to 1 st December 2017, and is expected to further reduce the challenges faced by SMEs when, getting credit, paying taxes, or moving goods across the country, amongst others, by removing critical bottlenecks and bureaucratic constraints to doing business in Nigeria.
The NAP 2.0 marks the beginning of another reform cycle 2017 to 2018 which aims to deepen the ease of doing business reforms implemented across the various Ministries, Departments, and Agencies (MDAs) in the last 12 months and will in turn increase productivity through industrialization, enhanced exports and foreign exchange earnings, while creating jobs and reducing poverty.
Some of the reforms to be implemented to ease the process of starting a business include eliminating the manual registration process at Corporate Affairs Commission in 10 additional states, increase access to credit for SMEs by registering at least 300 microfinance banks on the collateral registry, and enforce the elimination of illegal roadblocks on major trading routes across the country.
It is hoped that a successful implementation of the NAP 2.0 would deliver significant benefits especially for SMEs including the fact that it would make 1.3 million MSMEs eligible to do business with government, bring about a 75 percent reduction in average clearance time for foreign travellers, 60 percent reduction in time to get electricity, 75 percent reduction in time to register business premises and 50 percent reduction in time for filing corporate income taxes. MDAs have been charged by the Council to treat the Ease of Doing Business initiatives with a sense of urgency and deliver impactful results by implementing the Executive Order 001 on transparency and efficiency.
The Executive Order E01, which was signed by Vice President Osinbajo on 18th May, 2017, ensures that citizens have complete clarity on all government requirements and processes, better cooperation and improved information sharing among MDAs, as well as requiring proper communication of approval or rejection of applications to Nigerians within the stipulated timeframe.
The Presidential Enabling Business Environment Council (PEBEC) was created in July 2016. Its core mandate is to propel Nigeria in the doing business index by removing critical bottlenecks and bureaucratic constraints to doing business.
The council’s priority areas span across starting a business, getting construction permits, registering property, getting electricity, getting credit, paying taxes, trading across borders and entry and exit of people.
With exception to getting credit, Nigeria went from bad to worse in these areas on the 2017 index. PEBEC started out with the creation of a 60-day plan to address the key challenges in these areas.
Jumoke Oduwole, secretary of the PEBEC said “This started in January 2016 when this administration decided this was the path to go and our significant improvement on the index is proof that hard work and dedication pays.”
One of the initiatives, tailored towards “starting a business” was to reduce the number of days taken to incorporate a business. Businessday investigations confirm that this has indeed been implemented.
“My wife tried to register a business recently and to our surprise it look only three days,” Pabina Yinkere, head of institutional business at Lagos-based Vetiva Capital said. Prior to now, incorporating a business took a month at the earliest. In Mauritius, it takes seven days. On “Entry and Exit of people” some of the reforms implemented include the visa on arrival process and infrastructural developments at the Abuja airport.
On “Trading across borders” completed reforms include reduction in documentation requirements.
Chuka Mordi, CEO, National Competitiveness Council of Nigeria (NCCN), sees the jump in ranking as a positive improvement, adding that government agencies are helping to improve the state of doing business. For business persons, he said it translates to cheaper and more efficient way of engaging with the government in areas such as access to finance, travel among others.
For foreign investors, Mordi said it is positive signal that the environment is getting more productive and that this will enable the investors take business decisions. It shows a commitment by the presidential council.
The World Bank Doing Business project provides objective measures of business regulations and their enforcement across 190 economies worldwide.
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