The World Bank Ease of Doing Business 2020 report that moved Nigeria from 146th to 131st position has been applauded by stakeholders. The report could trigger new inflow of foreign capital into Nigerian banks and cheaper funds access to Small and Medium Enterprises (SMEs). It is also a wake-up call on the Central Bank of Nigeria (CBN) to walk the talk on ensuring that banks lend more to SMEs by providing incentives to lenders that comply with its directive on grassroots lending, writes COLLINS NWEZE.
Nigeria is gradually gaining global relevance as a good destination for business. This followed a positive rating from the World Bank Ease of Doing Business 2020 report which named Nigeria among the top 10 most improved places to do business, jumping 15 ranks to 131 out of the 190 countries surveyed. The feedback has generated positive responses from stakeholders calling on the Federal Government to sustain reforms of the nation’s business environment until economic activity reaches its full potential.
Analysts insist that the new Ease of Doing Business report will enable the Central Bank of Nigeria (CBN) to get banks to lend more to SMEs.
The renewed efforts by the CBN to ensure that banks administer cheaper credit and improved lending to the key sectors of the economy can be leveraged on by banks to ensure that SMEs get more loans.
CBN Governor, Godwin Emefiele said one of the major constraints to the country’s economic development, especially the growth of the real sector, apart from infrastructure, had been the lack of adequate credit flow from banks as well as the high cost of borrowing, and the Ease of Doing Business report is expected to change the dynamics as banks lend more to the economy.
Former Executive Director at Keystone Bank, Richard Obire, said the report opens a new chapter in credit access and remains a pointer that the business environment was picking up and more loans are needed by businesses to thrive. He also said that more foreign capital will flow into banks for lending to the economy as foreign investors get a better and improved perception of the Nigerian business environment. The Doing Business Index is an annual ranking that objectively assesses prevailing business climate conditions across 190 countries based on 10 ease of doing business indicators.
Stakeholders have commended the development, saying it will motivate the government to undertake business reforms with the goal of bolstering sustainable economic growth.
Nigeria has moved 39 places in five years from 170th position in 2015 up to 131st position, with Nigeria ranking fifth in the West African sub region, and the country can do much better as the economic powerhouse of the region.
Specifically, the key areas that influenced the rating included improvements in ease of getting electricity, trading across borders, enforcing contracts and business registration.
The winning reforms
In 2016, the Federal Government formed the Presidential Enabling Business Environment Council (PEBEC), chaired by the Vice President, Prof. Yemi Osinbajo with 13 ministers as members amongst others. The council has through the Enabling Business Environment Secretariat collaborated with Ministries, Departments and Agencies (MDAs), the National Assembly, the Judiciary, state governments and the private sector to carry out over 140 reforms so far in a bid to remove bureaucratic constraints to doing business in Nigeria and make the country a progressively easier place to start and grow business.
The report acknowledges reforms spearheaded by the PEBEC in the areas of operationalising a new electronic platform that integrates the tax authority and the Corporate Affairs Commission (CAC). It also acknowledges reforms carried out in some of the World Bank Doing Business indicator areas such as starting a business, registering property, getting construction permits, getting electricity, enforcing contracts, and trading across borders.
Also, in 2017, in the World Bank Doing Business Ranking, Nigeria moved up 24 places and was also listed among the top ten reforming economies in the world. This year, the World Bank also named Nigeria one of the top-20 improvers in doing business out of 190 countries.
Among the notable results of the reforms, besides the better ranking by the World Bank Doing Business Rankings and commendations include that the Federal Inland Revenue Service (FIRS), launched a centralised e-payment channels contributing to a 20 per cent reduction in time businesses spent on documentation and payment of taxes.
Others are the launching by the Immigration authorities of a fully digitized e-visa process guaranteeing visa approvals in 48 hours, the National Agency for Food and Drug Administration and Control (NAFDAC’) re-engineered registration processes and reduced processing time from 12 to less than three months, and how the Federal Airports Authority of Nigeria (FAAN) improved user experience at airports by eliminating passenger service charge stickers and manual check-in bag searches.
Some of the other results recorded include how the Corporate Affairs Commission (CAC) simplified company registration processes, resulting in 50 per cent reduction in processing time and the passage by the National Assembly of the Credit Reporting Act 2017, among others.
Government’s position
Vice President Yemi Osinbajo said that the Buhari administration will continue its determined pursuit of reforming Nigeria’s business environment until the full attainment of the objectives, which will bring dramatic changes in the country’s economy.
According to the Vice President, the government will keep updating itself on the progress of the ease of doing business reforms while noting some of the progress already recorded in the last three years since the commencement of the ease of doing business reforms.
The Minister of Industry, Trade and Investment, Mr. Niyi Adebayo, said: “The steady improvement in Nigeria’s ease of doing business score and rank is a testament to the reforms implemented by this administration over the past four years in line with the reform agenda being implemented at national and sub-national levels across the country since the establishment of the PEBEC by President Muhammadu Buhari in July, 2016.
“The PEBEC works towards the fulfillment of the projections of the Economic Recovery and Growth Plan (ERGP 2017-2020), which is striving to deliver sustainable economic growth in Nigeria by restoring growth, investing in our people, and building a competitive economy as we work towards delivering Buhari’s mandate of bringing 100 million people out of poverty.”
He emphasised that the 2020 Doing Business report from the World Bank has reaffirmed the commitment of the newly constituted PEBEC to making Nigeria a progressively easier place to do business and removing the bureaucratic constraints to doing business in the country as it forges ahead in this Next Level.
Also, Special Adviser to the President, Ease of Doing Business, Dr. Jumoke Oduwole noted that “the movement of 15 places to 131 as well as the recognition being given to Nigeria as one of the top 10 most improved countries, who have implemented the most reforms this year is significant because we were not even able to achieve some of the key reforms we had pursued. But what we have done so far is being recognised. This validation confirms that our strategy is working and we will continue to push even harder to deliver more impactful reforms.
“The private sector remains the fulcrum of the ease of doing business interventions. We are committed to more engagement between reform-implementing organs of government and the private sector players, and we are happy to see that this has resulted in a more favourable validation of the reforms by the private sector. This result will serve as encouragement to sustain the deepening of these reforms and make it even more tangible for businesses and the citizenry. The PEBEC is focused on delivering even more substantive reforms for the improvement of the general business climate,” she further stated.
Other stakeholders speak
The Director-General of Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf commended the government on the attainment of this feat which also reflects the efforts of the PEBEC.
Yusuf pointed out that “as noted by the World Bank’s report on Ease of Doing Business for 2019, efficient design and poor implementation are just two factors that explain why some reforms succeed while others fail. It stated further that there is a significant positive association between the availability of training programmes for public officials and streamlined business regulation.
“Therefore, there is need for government to ensure constant training of public officers as improved understanding, clarity and trust in regulatory requirements are associated with more efficiency in the regulatory framework.”
The Director-General, Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, explained that the country’s latest global position on ease of doing business came at the period the African Continental Free Trade Area (AfCFTA) agreement was in place, saying that the country would benefit a lot in attracting investments into the economy which incidentally will have positive impact on the country’s Gross Domestic Product (GDP).
Particularly, Ajayi-Kadir stated that the latest World Bank report on ease of doing business also indicates that the present administration under President Muhammadu Buhari is working assiduously to give a new face lift to the country’s business environment, which has impeded lots of business growth and caused setbacks for manufacturers of products.
The MAN DG noted that the Organised Private Sector (OPS) has been engaging government during the PEBEC constraint posed by over-regulation of businesses in the country and why there is need for them to improve the country’s business environment to enable businesses to thrive since government has nothing to do with business in the country than creating good conducive business atmosphere.
According to him, manufacturing constraints caused by over regulation have forced some of its members to adopt cost effective measures in line with their sustainable business strategies with the aim of achieving improving efficiencies and boosting production capacities.
Registration of Businesses
Before now, the Corporate Affairs Commission (CAC) did not have a functional online/electronic platform for prospective business owners to register their businesses.
Today, the registration process has greatly improved such that it is now possible to register a business in four to five days.
Registrar-General at CAC, Azuka Azinge, said: “The forum is held periodically in furtherance of efforts towards deepening communication with our customers and other stakeholders. It provides an opportunity for stakeholders and members of the public to have a one -on- one interaction with management of the Commission on service delivery.
She added that the Commission in line with its statutory mandate has deliberately embarked upon several reform initiatives aimed at easing business registration in Nigeria.
“This explains the Commission’s strategic policies like decentralisation of its operations; deployment of the Company Registration Portal (CRP) and the integration of the Company Registration Portal (CRP) to the Stamp Duty Portal of the Federal Inland Revenue Service (FIRS) to further ease the process of company registration.
The chairman, CAC, Dapo Abiodun, reaffirmed the board’s determination to pursue its mandate vigorously for the benefit of the Nigerian economy, saying that “the Commission is passionate about customers and keen on getting feedbacks from you to enable us improve our services to your delight hence, the importance the Commission attaches to this forum cannot be over-emphasised.”
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