It is however worthy of note that the FG has joined the OGP, brought on board the administration of criminal justice Act, set up some committees like Presidential Advisory Committee Against Corruption (PACAC), proposed several bills, arrested, tried and convicted corrupt persons, even former governors, yet the problem seem to be on the increase. That is why civil society organisations and some development partners are currently working around the behavioural change approach as an alternative.
[dropcap]I[/dropcap]n July 2016, the Nigerian government inaugurated the Presidential Enabling Business Environment Council (PEBEC), as the administration’s flagship initiative to reform the business environment.The PEBEC, chaired by Vice President Prof. Yemi Osinbajo was also to attract investment and diversify the economy to reduce the nation’s reliance on oil.
The big picture was to make it easier for micro, small and medium enterprises (MSMEs) to do business, grow and contribute to sustainable economic activity, and provide the jobs essential to improve social inclusion.
The PEBEC later approved the 3rd 60-day National Action Plan (NAP 3.0) from February 5 to April 5, 2018 to drive the ease of doing business initiative.
The action plan was expected to further reduce the challenges faced by MSMEs when getting credit, paying taxes or moving goods across the country among others by removing critical bottlenecks and bureaucratic constraints to doing business in Nigeria.
In May 2017, Osinbajo, as an Acting President (in the absence of President Buhari) also signed executive order E01 on improving transparency and business environment in Nigeria.
Luckily, the implementation of some of these reforms and others across various sectors helped Nigeria move up 24 places in the World Bank’s Ease of Doing Business Index 2018. Nigeria actually moved up from 168th position in 2017 ranking to 145th in the 2018 report scoring 52.03 out of 100.
You will agree with me that this “improvement” was a product of serious effort put in by the Nigerian government having also joined the Open Government Partnership, developed a National Action Plan and committed to “Improve the ease of doing business and Nigeria’s ranking on the World Bank doing business index.”
Now, what were the issues considered on the World Bank doing business index? Have the achievements translated to real benefits to the ordinary business owner on the street? Could the government have done better on some of these issues?
The very first of the issues is starting a business, how easy or difficult is it to register and start a business? Then dealing with construction permits and getting electricity.
Without electricity it is extremely difficult to operate a small business like welding, barbing and hair dressing salon, cyber café, business centre and printing work among others.
These small businesses may end up committing their profit to generate alternative power supply like buying generator and fuelling such generators on a daily basis.
Other factors World Bank doing business index include registering property, getting credit, protecting minority investors and paying taxes. The intention of government is to see that the difficulty around these issues are removed such that Nigerians or even foreigners who want to do business in Nigeria can do so with ease.
There is the factor of trading across borders, enforcing contracts and resolving insolvency. The combination of all these factors and others, creates a good or bad business environment.
The truth must be told, even with the commendations so far regarding improved business environment in Nigeria or ease of doing business, Nigerians know that some of the factors still pose serious challenge to the business community.
The recent window of opportunity announced by the Vice President between October and December 2018, open to register new business at N5,000 instead of N10,000 is equally commendable but we all know that the power (electricity) problem in Nigeria remain unsolved.
Even if it costs zero naira to register a new business and the issue of epileptic power supply is not addressed, then be rest assured that one of the most important factors is yet to be addressed.
The 2013 privatisation exercise that led to the handing over of 10 distribution companies and four generation companies to investors, appear to be breeding more problem rather than being a solution.
It may be easy to pay tax, but in terms of getting credit to do business in Nigeria, the interest rate per annum is still on the high side.
For commercial banks, the interest rate is as high as between 21% – 26% per annum, while for micro finance banks, it is about 35% per annum. Under the circumstance, it may be difficult to borrow for productive or business purpose.
In the real sense, for the people to appreciate the “improvement” in the ease of doing business ranking of Nigeria, the FG should work had, in addition to simplifying business registration procedures, offer a steady and predictable electricity supply.
This is one of the most important conditions for businesses to thrive. The interest rate need to be reduced to single digit, to enable interested person(s) borrow and invest in productive ventures, pay back and even make profit to remain in business.
Getting borrowers to re-pay loans is one of the biggest problem commercial banks are currently facing in Nigeria.
Again, you can easily register a business and yet unable to survive if such business involve movement of goods from one location to another amidst poor road network in Nigeria.
I have seen a good number of trucks tipping over and damaging goods worth billions of naira bought by hard earned or borrowed money. I have equally seen trucks spend days (up to 2 weeks) on the road just to deliver good for journey that would ordinarily take about one or two days.
There is no need to talk about the level of corruption in Nigeria despite serious attempt at tackling the problem because it is not a direct factor for consideration on the World Bank doing business index.
It is however worthy of note that the FG has joined the OGP, brought on board the administration of criminal justice Act, set up some committees like Presidential Advisory Committee Against Corruption (PACAC), proposed several bills, arrested, tried and convicted corrupt persons, even former governors, yet the problem seem to be on the increase.
That is why civil society organisations and some development partners are currently working around the behavioural change approach as an alternative.
A bigger challenge to the business environment in Nigeria apart from those already identified is insecurity. This current security situation in Nigeria need to be improved to make it more conducive to do business.
While the effort made so far by the Nigerian government to improve the business environment is commendable, greater effort should be directed at solving other issues that could undermine such gains.
For instance, special attention should be given to electricity generation and distribution problem, reducing interest rate and exchange rate, fixing critical infrastructures, addressing security challenges and improving the economy among others.
This will make more sense to the average business man or woman, such that it will not only be about climbing on the World Bank’s Ease of Doing Business Index, but improving the economy, so the citizens or foreigners are able to register and do sustainable and profitable business in Nigeria.
Edemhanria is a development strategist.
