In 2014, the World Bank did a focused report on the ease of doing business in states across Nigeria. The report focused on 35 states with the report finding that most Nigerian states were implementing reforms aimed at improving the ease of doing in the country. In 2014, some of states that were found to be implementing some of the fastest reforms included Cross River, Ekiti, Niger, Ogun and Rivers states.
The report measured the states on four key indicators including; starting a business, dealing with construction permits, registering property, and enforcing contracts, finding that 22 states have improved in at least one of the areas measured since the World Bank did a previous exercise in January 2010.
The report named Ogun state as one of the top reforming states in Nigeria in 2014. Since then the massive inflow of investments that has moved to the state, especially in the manufacturing sector may bear testimony on the impact reforms can have on a state.
The report cited the specific reforms that have paid off in states across Nigeria. It noted that One-stop centres have improved the time to issue a building permit in Rivers, Delta, and Oyo, and in some cases dropping by 50 percent or more since 2010. The report also found out that the case management provisions introduced by Ekiti’s new civil procedure rules in 2011 helped reduce average trial time by nine months while many states were digitizing land records and introducing geographical information systems to make property registration more secure and efficient.
But the report also noted that there were wide disparities in the ease of doing business across the country. While Abuja and Lagos emerged among the top performing states on the ease of starting a business, they ranked in the bottom two positions on the ease of dealing with construction permits. Also, while Sokoto and Osun rank two and three in dealing with construction permits, they ranked 30 and 33 in starting a business. In the 2014 ranking, Bauchi, Bayelsa and Benue were surprisingly ranked top as the easiest places to do business in Nigeria while Taraba, Yobe and Zamfara were ranked as the most difficult places to do business in the country.
Since the 2014 focused report on Nigeria, the World Bank is yet to do another report. BusinessDay has already finalized plans to release a similar report, using some of the World Bank Indices and our own indices to rank states on the ease of doing business by second quarter of this year. The aim is to, like the World Bank, rank Nigerian states more regularly on the ease of doing business in their states.
With declining crude oil prices, and most states going bankrupt due to the erosion of oil revenues, it has become a matter of survival that states promote business in a bid to diversify their revenue base from oil. This can only be achieved when states can create a highly conducive environment for businesses to thrive. The more businesses thrive in a state, the more wealth is created in that state, poverty is reduced and government capacity to generate revenues to provide social amenities is enhanced. If all states are able to improve their business environment, Nigeria’s ranking on the global ease of doing business will also improve and become a catalyst for attracting foreign direct investment into the country.
In the 2017 global ease of doing business report, Nigeria ranked 169 of the 190 countries covered in the report. Nigeria ranked low in all the indices used in the measurement. The country ranked 130 on the ease of starting a business; 174 on the ease of dealing with construction permits, 180 on the ease of getting electricity; 182 on the ease of registering a property, and had one of its best ranking on the ease of getting credit where the country ranked 44 among the 190 countries measured. Another very good ranking was on protection for minority investors, where Nigeria ranked 32 of the 190 countries but the country ranked low on the ease of paying taxes (182); trading across borders (181); enforcing contracts (139) and resolving insolvency (140).
The beauty of the ease of doing business ranking is that it helps the government to easily track the areas, where as a country, the obstacles to economic growth dwells so that as a government, you can put in place strategies to deal with the issues.
The government realises this and has set up the Presidential Enabling Business Environment Council (PEBEC), which is headed by acting president Yemi Osinbajo, with 10 ministers, governor of the Central Bank of Nigeria, and head of civil service of the federation as members. It has a secretariat staffed with people from the public and private sectors focusing on the key areas of ease of doing business indices with the aim of improving on them in the country.
Interestingly, the PEBEC has no representatives from the states, where a significant part of the reforms are to be made and who are most of the time at the receiving end of such reforms. However, the stated focus of the PEBEC team is to “remove critical bottlenecks and bureaucratic constraints to doing business in Nigeria.”
Some of the achievements so far the PEBEC claims include; ensuring that the Corporate Affairs Commission set up an online name reservation portal that has drastically shortened the time it takes to reserve a business name. They also claim to be behind the introduction of a 48-processing time for Nigerian visas and visa on arrival scheme for visitors coming to Nigeria, e-filing of taxes and payments on the FIRS platform, making it optional to have lawyers to register a business at CAC, getting the Nigeria Immigration service and the Customs to make available online, their documentation requirements and the aviation authorities to keep the nation’s airports clean and shiny.
Basically PEBEC is getting Nigeria prepared for business and businesses but it is important that the government both at the state and federal level moves fast with its ease of doing business reforms and combine it with structural macroeconomic reforms as they go hand in hand.
The right reforms that create the right environment for business mixed with the right economic incentives will act as a catalyst for the much needed foreign direct and domestic investments needed to drive growth. Targeting some big wins like property registration, paying taxes and obtaining construction permits could send the right signal out there that Nigeria is ready to do business with the world.
