By Izuchukwu Ozoemena
Following the recent slide in the World Bank’s ease of doing business index for the year by Nigeria, the Lagos Chamber of Commerce and Industry (LCCI) and the Manufacturers Association of Nigeria (MAN) say there must be an improvement if the country should be taken seriously by the global business community.
The World Bank had, last week, released a report that ranked Nigeria 146 out of 190 countries in the Ease of Doing Business index for 2018. According to Jim Yong Kim, the president of the World Bank Group, governments have the enormous task of fostering an environment where entrepreneurs and small and medium enterprises can thrive.
“Sound and efficient business regulations are critical for entrepreneurship and a thriving business sector. Without them, we have no chance to end extreme poverty and boost shared prosperity around the world”, he said.
According to the report, a total of 107 reforms were carried out in sub-Saharan Africa, a record for the region. A statement by the bank read in part, “Nigeria carried out four reforms which included making starting a business easier in Kano and Lagos, the two cities covered by Ease of Doing Business.”
Ease of Doing Business, an index published by the World Bank, is an aggregate figure that includes different parameters which define the ease of doing business in any country. It is computed by aggregating the distance to frontier scores of different economies.
Reacting to the report recently, the Director General, LCCI, Mr. Muda Yusuf, identified lack of infrastructure, Apapa traffic gridlock, trading across borders, challenges of documentation, among others as reasons for the drop. “The drop is a marginal drop. But whether we talk about 145 or 146 it is still low and that underscores the need for us to do more in the business environment.
“Because if there is anything that is slowing down the growth of this economy, it is the challenges that investors are facing in the business environment. So, this report only underscores the need for us to urgently do something to ensure that we improve on the ease of doing business.
“Although we must acknowledge what government has been doing in the business environment, we must also acknowledge that in the last ranking, Nigeria moved up by 24 points which was significant. But there is still a lot of job to be done so as to make the business environment conducive for investors.
“Our infrastructure is still a very difficult one, which is affecting the ease of doing business and competitiveness of firms in the economy. Also trading across borders, challenges of documentations, challenges with the Nigeria Custom Service and other agencies at the border posts and, of course, the Apapa traffic gridlock still stand as the major bottleneck affecting the ease of doing business in the country.
“Also credit is still a very big problem for the economy. Although government is coming up with all sorts of financing like the ‘trader money’, but credit is still a very big problem for the economy. From the angle of interest rate to the tenure of the credit, most of the loans are short term. So, these are the things I think government needs to tackle.
“Also fixing our railway system is very important, so that we don’t put too much pressure on the road because road transportation also makes a lot of products expensive across the country, and this affects profit margin, it affects competitiveness and a whole of things.”
Also reacting to the report, the president, MAN , Engr. Ahmed Mansur, opined that Nigeria’s present position on the global index is as a result of various bottlenecks and insecurity hindering ease of doing business in Nigeria.
“It’s obviously not a healthy development, one would expect particularly after the efforts made by government at various levels to improve the ease of doing business. It is sad that instead of going up the ladder, we are going down from 145 to 146. It’s not a big move, but it’s a move in the wrong direction. One would have thought that with the presidential committee on enabling business environment, we should show some positive development.
“We are still hopeful that the situation will improve and some of the initiatives of the government will yield positive results. The infrastructure has been a major problem, also the general insecurity in the country is also not helping issues and this is discouraging investors. Also over the past three years despite all the efforts made by the government, the investment climate has not really been conducive even for local businesses. But we are hopeful that things will get better in the coming year,” Mansur stated.