BY JIDE AYOBOLU
The Bureau of Public Service Reform (BPSR) has said that it will carry
out a nationwide perception survey and impact assessment on the ease of
doing business in the country. The BPSR Director General, Mr. Dasuki
Arabi, disclosed recently in Abuja at a strategic stakeholders meeting.
According to him, the surveys would be on investment constraints in
Nigerian business environment; Presidential Executive Orders;
Implementation Modalities and their effectiveness; service delivery
issues in some selected MDAs; education and transportation sectors in
Nigeria. The survey which is expected to commence today will be carried
out in Lagos, Kano, Enugu and FCT using administration of
questionnaires, one-on-one interviews and focus group discussion
methodology, according to Mr Arabi. He said the objectives of the survey
are to identify the common investment constraints in business
environment in Nigeria; benchmarking their operations in line with
global good practice; strengthening a better investment climate in
Nigeria; and draw lessons from the survey to serve as a basis for
further policy development. On the Presidential Executive Orders in
implementation modalities and their effectiveness, Arabi said the survey
would identify the level of compliance to regulation on Presidential
Orders; obtain baseline data on citizens, businesses and government; and
draw lessons from the survey to serve as a basis for further policy
development.
According to the Report, Nigeria ranks 131 out of 190 countries on the
World Bank Doing Business Index, moving up 15 places from 146th position
in the 2019 Report. The Report names Nigeria, for the second time, as
one of the top 10 countries with the most notable improvements during
the review period, with Togo being the only other African country. Of
the 12 indicators above, Nigeria improved significantly in “starting a
business, dealing with construction permits, getting electricity,
registering property, trading across borders and enforcing contracts”
indices. The Presidential Enabling Business Environment Council led by
the Vice President of the Federal Republic of Nigeria has been
responsible for driving business reforms in Nigeria since 2016. This is
in line with the Federal Government’s Economic Recovery and Growth
Plan (ERGP 2017 – 2020) targeting Nigeria’s rank among the top 70 in
the World Bank Doing Business Index by 2023. Overall, the World Bank
2020 Doing Business Report shows a diminishing gap between developing
and developed economies in ease of doing business. Nigerian governments
across all levels must continue to initiate business-oriented policies
and ensure adequate commitment to their implementation.
Recalled that, the latest World Bank Ease of Doing Business ranking for
2018, released by the global financial institution. According to details
of the report [1], of the 190 countries ranked by the World Bank,
Nigeria ranked 146 in 2018, dropping by a spot from its 145th position
in 2017. The nation had last year moved 24 places from its 2016 spot of
169 to 145. The report, themed ‘Doing Business 2019: A Year of Record
Reforms, Rising’, revealed that the World Bank tracked 314 reforms by
128 governments across the world. The report noted that Nigeria made
starting a business easier by reducing the time needed to register a
company at its corporate affairs commission and introducing an online
platform to pay stamp duty.
This reform, it said, applies to both Kano and Lagos. It also noted that
Nigeria made getting electricity easier by requiring that the
distribution companies obtain the right of way on behalf of the
customers and by turning on the electricity once the meter is installed.
It said, however, that Kano State made property registration less
transparent by no longer publishing online the fee schedule and the list
of documents necessary to register a property. “Governments have the
enormous task of fostering an environment where entrepreneurs and small
and medium enterprises can thrive,” Jim Yong Kim, World Bank Group
president said.
“Sound and efficient business regulations are critical for
entrepreneurship and a thriving private sector. Without them, we have no
chance to end extreme poverty and boost shared prosperity around the
world,” the World Bank chief added. According to the report, 107
reforms were carried out in sub-Saharan Africa, a record for the region.
On the methodology adopted, the report said the indicators presented and
analysed in Doing Business measure business regulation, the quality and
strength of legal frameworks, the protection of property rights—and
their effect on businesses, especially small and medium-sized domestic
firms. Details showed that at the top of the table are countries like
New Zealand, Singapore and Denmark which occupied the first, second and
third positions respectively. At the bottom of the list are South Sudan,
Libya, Venezuela, Eritrea and Somalia, all considered countries where it
is most difficult to do business.
On May 18, 2016, Nigeria’s erstwhile Acting President and current
Vice-President, His Excellency Prof. Yemi Osinbajo SAN, GCON signed an
executive order on transparency and improving the business environment
in the country. It contains far-reaching initiatives to be implemented
by MDAs to ensure easier access to information, processes and
documentation, as well as promote efficiency in public service delivery.
From July 2017, PEBEC accelerated and expanded the initiative by
focusing on three key areas:
* Deepen existing Reforms: Complete outstanding initiative and
implementation of reforms, so as to ensure Nigerians and the private
sector feel impact of and validate reforms to World Bank ahead of the
May 31st deadline for 2018 DB Report.
* Sub-national Reforms: Collaborate with State Governments to
implement reforms ahead of World Bank’s subnational appraisal in 2018
* Additional Reforms: Commence reforms aimed at improving trade within
Nigeria in preparation for World Bank indicator reforms, including
Omnibus bill. Also, to ensure that MDA budgets for next year include
planned reforms.
It is important to note that,
Starting a business: It now takes just 24 hours (not 10 days) to
register a business with the Corporate Affairs Commission (CAC [2]). The
registration process now allows for online self-application without the
need for a legal adviser. This change reduces the formal cost of
starting a business by at least N64, 000 ($177) [3]; representing the
foregone cost of hiring a lawyer and the consolidation of registration
documents to a single CAC form. It also reduces some informal costs
incurred in the interaction with government officials including
transportation, unofficial tips and unnecessary delays. The automated
process also makes it easier to link business with tax authorities,
dispensing the need for physical registration at the tax office.
Dealing with construction permit: By automating and simplifying
registration and payment processes, the cost and number of required
documentations for obtaining a construction permit reduced. For
instance, the cost of warehouse (small business) construction in Lagos
dropped from 26% to 2% [4]of warehouse value.
Getting electricity: This does not imply improvement in the reliability
of electricity in the country; it only covers the ease of getting new
connection to national electricity grid. The online application platform
has reduced the connection process to 30 days [5] as opposed several
months; particularly in Lagos and Kano.
Registering property: The use of professional consultants in the process
has helped reduce the time and cost for registering properties in Lagos
and Kano.
Trading across border: Regulatory reforms [5] led to the reduction of
documents for export (from 10 to 7) and for import (from 14 to 8)
enabling slightly quicker movement of goods across borders. In addition,
the Apapa port in Lagos began 24/7 operation and the Request for
Information (RFI) export form was digitized; leading to a 48-hour
reduction in time spent for border compliance. The implementation of the
single joint cargo reducing the number of touch points for import
clearing (from 8 to 1) was also a score point for Nigeria on the rank.
Given that the data collection for the Ranking was concluded in May
2019, the impact of the recent closure of Nigerian borders affecting
Benin, Cameroon and Niger were not accounted for.
Enforcing a contract: The score points for Nigeria was mainly due to the
introduction of small claims commercial court in Lagos and Kano
instituted in 2018 and January 2019 respectively. The small claims court
[6] allows for faster liquidated damage claims of below N5 million (in
Lagos) and below N10 million (in Kano) for small- and medium- size
enterprises (SMEs) within 60-days. There is also an opportunity for
self-representation in the court. This decongests the High Court and
improves entrepreneurs’ ease of taking legal action and getting
justice.
However, the country did not experience significant improvement in other
Ranking metrics: Paying Taxes, Getting Credit, Resolving Insolvency, and
Protecting Minority Investors.
However, these reforms have been largely limited to Lagos and Kano –
which are the only two states the Ranking accounts for. To ensure that
these reforms are not aimed at ‘gaming’ the Rankings, these
improvements should be extended to other states in the country including
southeastern states. Enhancing other government procedures and services
for local businesses is required to ease business difficulties in the
country, including taxation and obtaining credit – for which the
country did not show any significant score progress. Although the
Ranking does not cover infrastructure constraints, it remains one of the
biggest challenges at a significant cost to Nigerian businesses,
particularly electricity reliability and transport network.
Therefore, the reforms to be carried out on the ease of doing business
will enable the ratings of the country to be better, as the areas in
which the country is not doing too well would properly looked into and
fix; which a right step in the right direction for the country.
.
Links:
——
[1] http://www.doingbusiness.org/
[2] http://new.cac.gov.ng/home/
[3]
https://easeofdoingbusinessnig
[4]
https://easeofdoingbusinessnig
[5]
https://easeofdoingbusinessnig
[6]
https://easeofdoingbusinessnig