The latest World Bank report that ranked Nigeria 169 out of 189 countries on the ease of doing business globally is a wake-up call for the Buhari administration to re-draw not just Nigeria’s economic blueprint, but also how to implement it successfully. Although the report showed Nigeria improved one point in ranking from 170 in 2014, it was still disappointing for Africa’s biggest economy, when it comes to the ease of obtaining construction permits, getting electricity, enforcing contracts, registering property and trading across borders among other parameters used in the report. An essential part of the ecology of democratic governance is a conducive environment for economic development. This embarrassing assessment of Nigeria’s business climate is just a euphemism for corrupt government and rotten politics.
The World Bank’s Doing Business report tracks the regulatory and bureaucratic systems of nations by conducting detailed annual surveys. Tagged ‘’Doing Business 2016’’, under the Measuring Regulatory Quality and Efficiency, they measure indicators like the time it takes to register a business, obtain official title to lands, protecting investors, paying taxes, getting credit, enforcing contracts, trading across borders, among others. The performance of assessed countries is compared to their peers. The report showed Sub-Saharan African economies were among the world’s top improvers of business climate, though the region ranks poorly in the areas of trading across borders and registering properties.
Mauritius ranks best in the region, with a global ranking of 32, performing particularly well in the areas of paying taxes and enforcing contracts. In Mauritius, it takes only 152 hours for entrepreneurs to pay taxes, compared to 261 hours globally. Rwanda has the next best ranking in the region, with a global ranking of 62. Ten years ago, an entrepreneur in Rwanda took 370 days to transfer property. Now, it takes 32 days which is less than in Germany, the report stated. Also, Botswana ranked 72; South Africa 73; Seychelles 95; Kenya 108, and Uganda 122 this year. A total of 45 economies, 33 of which were developing economies, undertook reforms to make it easier to start a business.
According to the report, Nigeria’s physical infrastructure does not provide enough support for new and growing businesses. The findings highlight the impact of Nigeria’s well-documented infrastructural challenges on new business owners; noting that epileptic power supply across the country has resulted in backup generators forming a key part of any business’s assets, at a significant additional operating expenses. The report also revealed that the cost of capital charged by Nigerian banks and investors is so high as to impede profitability. In some cases, Nigerian banks require 150% of the borrowed amount in collateral, thereby automatically disqualifying many small businesses from funding eligibility.
For Buhari administration officials faced with the challenge of creating jobs, promoting development, and fighting unemployment, it is worth studying how other nations fare in terms of the various Doing Business indicators. India, for example, made significant improvements by eliminating the minimum capital requirement and a business operations certificate, saving entrepreneurs an unnecessary procedure and five days’ wait time. Kenya made business incorporation easier by simplifying pre-registration procedures, reducing the time to incorporate by four days. The challenge of development is to tread this narrow path by identifying regulations that are good and necessary, and shunning ones that thwart creativity and hamper the functioning of small and medium enterprises, the report said.
A modern economy cannot function without regulation but, at the same time, it can be grounded by cumbersome regulation. Importantly, the assessment is more concerned with the quality of the environment governments build for local businesses to thrive and how this environment impact foreign investors. The clear assumption here is that the longer it takes to secure key regulatory inputs or the costlier key services are, the more time it takes to make goods, the less profit will be made and the less income created. Why should an investor locate a company in Nigeria if his competitor would have completed the same business in Ghana by the time he finally secures company registration, land title and required regulatory permits for production? If the APC government is serious about changing Nigeria, this report ought to be an agenda for action and a basis for benchmarking improvements in the business climate. Sadly, there is no evidence that government officials even read, let alone elaborate programs of action based on these annual reports.
Vice-president Yemi Osibanjo, who is the de facto coordinating minister of the economy, ought to set targets on the report’s indicators of investment friendliness. The Buhari administration must break with the past. It can no longer be business as usual when political leaders were only interested in helping themselves and their friends. Governance has to go beyond promising to build schools, hospitals or roads, more so when the contracts for these projects often serve more to enrich public officials and their contractor cohorts than benefit the public.
The President must sit up and address the multitude of deficiencies highlighted in this latest report. This calls for, among other things, reforming the bureaucracy and making sure public servants understand that their role is to facilitate job creation; not demand bribes from those who flout regulations. Public officials should work on improving the investment climate rather than waste millions of taxpayer’s money on needless seminars and empty grand-standing and public relations exercises. Secondly, the new Minister of Trade and Investment should be assessed for measurable outputs such as the number of businesses that have been attracted to the country and the number of jobs thus created, under his watch; rather than how many foundation stones are laid for phantom projects.
Finally, as an integral part of the war on corruption, the President himself must put forth new ideas on innovative ways of promoting public sector transparency and accountability. This renewed focus should be led by think-tanks and civil society organizations, which will monitor and shed light on government performance in different sectors of the economy. It is indeed unfortunate that the Nigerian business community has allowed the government to develop pseudo accountability initiatives while businesses have been largely content to pay bribes to rent-seeking and obstructive public officials.
The consequence of this pervasive corruption is a certain mindset of the country as a no-man’s land, vast, rich and just there to be plundered, or the view of Nigeria as an already baked cake which no one seeks to preserve for the future but to be shared today without scruples. What is required is patriotism and nationalism to nurture Nigeria. Patriotism entails love for one’s country, which propels one to do something to protect and grow the country. Nationalism, more or less the same thing as patriotism, mainstreams the former by the inclusion of a political superstructure for the realization of the love of one’s country. These values are required at no other time than now. These times do not allow for a revolting denial of responsibility to Nigeria.
