Nigeria Content Online

A recent World Bank
report on the ease of doing business in Nigeria paints a picture of an
economy that is in dire need of reforms. According to the report, there
are several constraints to local business activities in Nigeria, chief
of which are the limitations for small to medium-size domestic firm to
thrive. The report focused on the aspects of starting a business,
dealing with construction permits, registering property, and enforcing
contracts.

In these areas,
Nigeria is still a long way behind. In enforcement of contract, it
requires 40 procedures and 457 days to achieve, while it takes up about
32 per cent of the income per capita of the population. To set up a
business for instance, would require about N118, 557. The report
however singled out Jigawa, Borno, and Gombe as states where there have
been improvements in the ease of doing business index. Doing business
was most difficult in Imo and Ogun states.

Improving
regulations Empirical research by the World Bank shows that improving
these regulations has positive effect on economic growth. “If Nigeria
adopted nationwide all of its states’ best practices identified in this
report, it would rank 72nd out of 183 economies globally, 53 places
ahead of Nigeria’s position in the global Doing Business 2010 report,”
the reported stated.

According to the
report, “Doing Buisness 2010 Nigeria” our country slipped in the global
ranking from 134th position last year to 137, behind South Africa,
Botswana, Tunisia, Rwanda, Ghana in Africa, on the grounds that it is
increasingly more difficult doing business in the country. The report
is supposed to engender reforms economic competitiveness among
countries. “But for reform-minded governments, how much their
indicators improve matters more than their absolute ranking,” the
report stated.

It challenges
countries to strengthen and add to regulations to protect investor and
property rights and find more efficient ways to implement existing
regulations and cut outdated ones. “One finding of Doing Business:
dynamic and growing economies around the world continually reform and
update their regulations and their way of implementing them, while many
poor economies still work with regulatory systems dating to the late
1800s.” Olusegun Aganga, minister of finance said recently that
government was concerned about the condition of doing business and that
is why it met with key operators to find out what their problems are.
“What we are trying to do is to find out what the issues are and what
government can do. We met with the banks and asked what we need to do
in order for them to start to lend to the real economy. There are a
number of things we need to do. One is legislative that we need to
change the Land Use Act, Evidence Act and Bankruptcy Act. Second thing
is establishment of commercial courts.” Mr. Aganga said two of these
documents are already with the National Assembly for deliberations in
order to help improve the ease of doing business in the country.

Manufacturing
challenges are many David Kliegl, general manager of the Federal Palace
Hotel and Casino, said in a recent interview that Nigeria is a
difficult environment to do business. Mr. Kliegl said, “It’s difficult
to do business in Nigeria. We run our generator 24 hours of the day and
that is very expensive. We have to estimate that in the cost of doing
business since we can’t cry about it.” “If you want to do business
here, you just have to live with these challenges,” he added. He would,
however, love to see a better Nigeria. “We’ll love to see stable power.
We believe that by being good corporate citizens, paying the taxes that
are due to the authorities, those funds will be used for the quick
provision of power and other basis infrastructure which would enhance
business and investments opportunities in the Nigeria.” “We are
investors in Nigeria and we understood what it took to do business
here. We are happy doing business in the country and we also want to be
a part to ensuring that infrastructure continues to get rectified
hereby attracting more investors,” Mr. Kliegl added.

Doyin Salami, a
member of the Monetary Policy Committee (MPC) of the Central Bank of
Nigeria (CBN) said there is need for synergy between the various
sectors of the economy. One way of doing this, according to him, is to
remove the Land Use Act out of the constitution so that it becomes a
policy issue rather than a constitutional matter which is cumbersome to
review. “The Land Use Act must be reorganized such that it makes
verification and transfer of title easy. Currently, farmers cannot
pledge land which is why banks are not willing to finance agriculture.”
Mr. Salami said it is ironic that agriculture, which contributes about
42 per cent of the GDP, does not attract credit from banks due to the
distortion in the Land Use Act which requires the consent of the
governor before deed of title is issued.