The plan to improve the ease of doing business in the country by the Presidential Enabling Business Environment Council (PEBEC) is a welcome development. Its timing is even appropriate now that our country needs purposeful ideas to get out of the current economic recession.
The action plan is targeted at three broad priority areas namely, entry and exit of goods, entry and exit of people and government’s transparency and procurement. Giving details of the action plan, Acting President, Prof. Yemi Osinbajo said the reforms will boost Nigeria’s ranking in the upcoming World Bank business index 2018.
Osinbajo also explained that the expected outcome of the new plan will be noticeable in all key areas of government that will ease trade and commerce within the country and beyond our borders.
According to him, the timelines are to ensure that things are accomplished within a specific time-frame. In addition, the council will work together with the National Assembly to pass vital legislations such as the National Collateral Registration bill and the Credit Bureau Service which will allow Small and Medium Enterprises (SMEs) access credit with ease. Also, government says, it is studying the model of the government of Georgia to tap from its experience with a view to creating a flourishing business environment in Nigeria.
In supporting this effort, we are mindful of the fact that the ease of doing business is a key enabler to drive economic development. And Nigeria will have an investment friendly destination if there is a deliberate resolve to generate confidence. Foreign Direct Investments move in the direction of economies that create a regulatory environment that enables enterprises, especially small firms, to function unimpeded. Such environment will have a large positive impact on job creation, which is good for the economy.
The Georgian model, which government says it is closely analysing and could apply its principles in Nigeria’s business model, is largely successful because of its excellent regulatory environment in terms of quality and efficiency and the political will.
We are surprised that the organised private sector operators are not included in the PEBEC. Government needs the advisory inputs of the organised private sector to drive the global challenge in the ease of doing business.
It is good that the action plan is in keeping with President Muhammadu Buhari’s promise last year to establish the Council that would review and remove all encumbrances to trade in the country. The task before PEBEC may not be easy. It should work towards enforcing the simplification and streamlining the export, import documentation and procedures leveraging on technology with a view to removing all administrative bottlenecks in our business environment.
The president’s promise to achieve a reduction in the cost of doing business in Nigeria must become a reality. This should include improving efficiency in business registration, entry and exit processes, including visa reforms, land registration and contract agreements, among other factors that undermine ease of doing business in Nigeria. There is also the need for a robust roadmap for the implementation of the medium and small enterprises framework. Focus should be more on result and not on policy enunciation. Nigeria needs to get out of the bottom end of ease of doing business economies index.
In the 2016 World Bank Ease of Doing Business ranking, Nigeria ranked 169th out of 189 economies surveyed. According to the report, it takes five days to start a business in Rwanda, compared to 28 days in Nigeria, while cost to export is estimated at US$786, as against US$183 in Rwanda.
Also, the 2015 Chatham House report stated that at the end of 2014, Nigeria’s external trade at ($135.86bn), yet official statistics paint only a part of the picture and cannot capture the massive volume of informal activity.
The latest World Economic Forum (WEF) rankings for global competitiveness in doing business shows Nigeria dropping three places from 124 to 127 in the world. This means it is more difficult to do business in Nigeria than in many countries in Africa. And out of the 138 countries surveyed in the Global Competitiveness Index, Nigeria is only better than eleven countries most of which are in crises situation. Altogether, PEBEC and the National Assembly should work within the 60-day timeline so that the action plan will be implemented.