The private sector is warming up for growth and expansion, as the Federal Government’s just released National Action Plan 2.0 (NAP 2.0) unveils clear-cut plans to reform major business hiccups in the economy.
The 11-point reform initiatives treated in NAP 2.0 involve starting a business, dealing with construction permits, registering property, getting electricity, getting credit, paying taxes, trading across borders, enforcing contracts, selling to government, entry and exit of people and trading within Nigeria.
In terms of starting a business, the government is eliminating inspection for business premises and is driving e-registration during company registration. The government is also closing manual registration portals in ten states.
On dealing with construction permits, the government is making land information available online, adopting a fully operational electronic payment system, with options for POS and bank transfers.
On payment of taxes, government expects to have all large and medium sized enterprises register on e-filing systems, while reducing the average time for filing and paying taxes by 50 percent.
“We are hopeful that this will drive expansion and industrialisation in the country. The emphasis on the NAP 2.0 is on taxation, which has posed a roadblock to manufacturers. The document has shown that the government wants to make more credit available for SMEs. Eighty percent of manufacturers in Nigeria are SMEs and you are kick-starting a new economy the moment you empower this category of business,” Frank Udemba Jacobs, president of the Manufacturers Association of Nigeria (MAN), told BusinessDay.
In terms of port reforms, the government wants joint examination of import cargo in Lagos, led by the Nigeria Customs Service, as well as compliance with 48-hour SLA for automated scheduling process by pre-shipment inspection agents.
Agencies of government must also comply with 24-hour SLA for processing of Net Export Proceeds Form and must stick to seven documents for export and eight for imports.
On the issue of enforcing contracts, the government is planning to have specialised magistrates trained for commercial cases.
Regarding entry and exit, government is enforcing a single passenger clearance system at the airports, to reduce average clearance time by 50 percent, and is processing and approving Temporary Work Permit within 48 hours. There will also be Automated Expatriate Quota application process at the Ministry of Interior, targeted at encouraging foreign direct investment.
Government has also approved 90-day processing timeline for registration of food and drugs in Nigeria and clearly defined fees and processes involved in registering a product with NAFDAC, which must be made available online.
All the checkpoints must be available online and there must be elimination of illegal road blocks on major trading routes in the country.
“ The idea is excellent for business, but can we also have the states adopt this?” asked Abdurahaman Modibbo Girei, president of the Adamawa Chamber of Commerce and Industry.
“Nothing frustrates businesses than road blocks. There are too many roadblocks that need to be eliminated. Investors are interested in it and more so, in implementation,” Girei said.
Africa’s biggest economy ranks 169 out of 190 in the 2017 World Bank Doing Business Index. Nigeria ranks 169 on getting electricity, 138 on starting a business, 174 on dealing with construction permits, 182 on registering property and 44 on getting credit.
The Economist magazine released a report in 2015 which showed that an average company in Lagos expends 956 hours per year in paying their taxes.
While the number of tax payments in Africa averages around 36.1, South Africa requires seven payments. In Rwanda, it is 17, while Nigeria has 47 payments, according to PwC.
According to cocoa and cashew exporters, any ease of doing business project that does not factor in the terrible state of Apapa roads is incomplete.
They however stated that this is a step in the right direction.
“The Apapa road linking export terminal at the ports is in terrible shape. An exporter, who ships 1,700 tons of commodities per day, under normal circumstances, when Apapa road was in good condition, now manages to only ship between 100 and 250 tons, and this is bad for business,” said Tola Faseru, president of the National Cashew Association of Nigeria (NCAN).
“These commodities are all perishable and if not shipped on time, will perish, meaning great loss of income, livelihood and export revenue for both exporters and the nation,” Faseru said.
Adeyemi Adeniji, CEO, Startlink Global and Idea Limited, exoporter of cocoa and cashew, said trucks take seven to ten days on Apapa road and 15 days at the APMT, meaning that their non-oil products start depreciating when they get to the ports.
“Most of our buyers have started writing to state that they want to cancel the contract agreements we have entered, because of the delays in meeting up with those contracts.
“The standard of our commodities is also affected. Before now, cashew nuts used to have 1.2 or 1.3 percent of fatty acids but today, due to the Apapa gridlock, we have found out that our recent shipments get to their destination having 15 percent of fatty acid,” he stated.
ODINAKA ANUDU
