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Ease of Doing Business Reforms Offers Ray of Hope for Nigeria’s Struggling Economy

According to the most recent World Bank annual rankings, Nigeria is ranked 131st out of 190 economies in terms of ease of doing business.

This is partly due to the fact that the Nigerian business environment has become coloured and polarized, with numerous challenges causing fear as a result of insecurity, uncertainty, political, environmental, and cultural disparities, resulting in the collapse of various business outfits, particularly micro, small, and medium-scale enterprises (MSME) and the relocation of large ones to other countries.

A study from the United Kingdom, UK, department of foreign trade has shown that the Nigerian economy is characterized by great inequality and large economic gaps between the North and the South, inadequate infrastructure, a complicated and opaque regulatory framework, corruption, and a rapidly rising population. Oil accounts for the majority of Nigeria’s government revenue and nearly all of its foreign exchange profits.

“Slow economic growth is of concern. The latest IMF forecasts project that the economy is to grow by 2.7% in 2022 and is expected to grow between 2.6% and 2.7% over the 2022 to 2026 period, just barely above population growth estimates, and insufficient to create the scale of jobs required and to reduce poverty being experienced. Too few jobs are being created for the 3.5 million young Nigerians coming of working age annually, adding to the pool of under or unemployed.”

In spite of these challenges and given that a lot still remains undone, Nigeria is slowly but surely checking the boxes when it comes to the ease of doing business, resulting in the country being one of the topmost hubs for business, trade and investment.

In pursuance of this administration’s goal to improve Nigeria’s ease of doing business ratings, President Mohammadu Buhari inaugurated the Presidential Enabling Business Environment Council (PEBEC), chaired by the Vice President, in July 2016.
The PEBEC comprises the Minister of Industry, Trade and Investment (MITI) as Vice-Chair, 9 other ministers, the Head of Service of the Federation, Governor of the Central Bank, representatives of the National Assembly, and the private sector. PEBEC’s mandate is to make recommendations on institutional reforms to promote Nigeria’s investment attractiveness.

The Federal Executive Council, FEC, presided over by the Vice President, Yemi Osibanjo endorsed the Presidential Enabling Business Environment Council, PEBEC, a bill in July 2016 which sought to set the ball rolling in the country’s business environment; and to also maintain a proper business climate.

The Omnibus Bill is seeking to amend twenty-three (23) business-related laws in Nigeria and the overall benefits of the Bill include ensuring efficiency in public service delivery in terms of time, cost, and procedure for doing business, improving transparency, removing outdated provisions from relevant laws, and providing incentives to encourage Micro, Small, and Medium Enterprises (MSMEs) participation in business, among other things.

The government was convinced that taking affirmative steps of due process, diligence and the ease of doing business will trickle down to the ease of delivering national economic prosperity and achieving distinctive national aspirations.

The PEBEC started making noticeable strides by removing bureaucratic constraints to doing business and making the country a progressively easier place to start and grow a business.

Speaking during the 5th year Anniversary of the PEBEC, the Special Adviser to the President on the Ease of Doing Business (EoDB), Dr Jumoke Oduwole, said: “In the entry and exit of people – immigration issues, visa on arrival, etc., other smaller countries than Nigeria are able to get that right. So, we decided to work on that. The PEBEC was inaugurated in July 2016, and the secretariat started work in October 2016.

“We decided to work on transparency. One better way was to demystify information and give the information to Nigerians – business people who want to do work in Nigeria, to make sure that people have the information they need to make quality decisions. We decided to have a strong technology drive; pushing agencies to have functional websites, and the websites should have critical and quality information.

“When attempting to drive economic reforms, government tends to see their efforts first in the broad strokes of infrastructure, human capital development and land reforms, and often overlook the importance of the delivery of institutional reforms in the public sector, which is in itself a major factor in jump-starting and sustaining economic growth and development.

“PEBEC, with over 160 reforms implemented since its inception, has recorded appreciable progress and the journey to making Nigeria a progressively easier place to start and grow a business. The Council and its Secretariat have enjoyed cordial and productive relations with the Senate, House of Representatives, Judiciary at both federal and sub-national levels, all kinds and levels of businesses across the private sector, Nigerians in the diaspora, media, organised private sector, non-governmental organisations, development partners, development financial institutions, as well as friends of Nigeria and the diplomatic corps.”

To further boost the drive for systemic business climate reforms in line with the Federal Government’s commitment to improving the business environment in Nigeria, the National Action Plan was introduced for the first time in February 2017 and has since become an annual 60-day accelerator and reform tool designed to coordinate the effective delivery of priority reforms of select ministries, departments and agencies.

The 7th National Action Plan (NAP 7.0) was specially designed to break away from the lacklustre performance of the last two outings, NAP 5.0 and NAP 6.0, held in Q1 of 2020 and 2021, which saw the relevant ministries, departments and agencies perform below par at 44% and 43% respectively for a variety of reasons.

It, however, focuses on five major areas: ports/trade facilitation reforms, automation reforms, regulatory reforms and Executive Order 01/ReportGov.NG compliance reforms.

Categorically, the reforms in these areas will target the frontline experience of business as regards agro-exports. Additionally, it seeks to improve the travel experience at Nigeria’s airports, and strengthen the automation of the business incorporation process of the Corporate Affairs Commission.

This year, NAP will drive the adoption of electronic filing of taxes by taxpayers. Additionally, MSMEs will have an improved complaint resolution on the ReportGov.ng platform and an expansion of the MDAs listed.

The Midway report of March 8th, 2022, on the reforms in the Non-Agro Export showed that there has been a 39 per cent completion in business registration, 49 per cent for trademarks registry, TMR; 61 per cent for resolving insolvency; and 33 per cent getting electricity.

Others are 29 per cent in taxes, 0 per cent in business permit and expatriate quota, 31 per cent in airport reforms, and 25 per cent in Executive Order 001 and ReportGov.ng.

Overall, the number of reforms was 28; and the number of outstanding reforms is 28; and 30 per cent of completed.

Similarly, with regards to the progress report on the reforms in the Agro-Export showed that there has been a 32 per cent completion in the payment and verification process, 19 per cent for the inspection process, and that of the terminal operators and shipping lines is 19 per cent; and 17 per cent for access and documentation process.

In total, there were 30 per cent reforms made, 30 per cent of outstanding reforms and 22 per cent of completed reforms.

In his remarks during the 5th year Anniversary of the PEBEC, Prof. Yemi Osinbajo explained that the long and short of the mandate of PEBEC was simply to find ways of changing the growing reputation of Nigeria as a challenging business environment.

According to him, it seemed quite simple to remove the bottlenecks and obstacles and to seek to change the orientation of regulatory authorities and public servants who interface with businesses seeking government licenses, approvals and other regulatory requirements.

“It was always going to be a difficult task. The public service and government agencies of course are notoriously settled in their ways and generally, there has never been any sense of urgency in processing licenses and approvals. The attitude of course ties well with the systemic corruption and abuses that follow when public officials have discretion in terms of the time it takes to issue approvals and who gets approvals and also where the accountability framework is weak.

“So, interfacing with the public is almost always an opportunity for rent-seeking, such that it had become the case that business owners had to engage consultants who helped in navigating the deliberate roadblocks for a fee. So, the main implication of that situation was the effects on the economy. A difficult business environment simply means fewer investors (whether they be local or foreign investors), and fewer jobs and opportunities.

“This was the task that the President gave us at the inception of PEBEC. Fortunately for us, we had a smart, energetic and visionary team of young people led by Dr Jumoke Oduwole, who with this film along with public and private-sector members designed the series of reforms initiatives and now internationally recognized national action plans the 60-day accelerators designed to coordinate the effective delivery of priority reforms in select MDAs every year.

“At the federal level, the PEBEC Secretariat also actively supports 15 public-facing agencies. They also track 55 MDAs on the implementation of Executive Order 001 and transparency and efficiency of public service delivery, and the council’s feedback mechanisms which are the reportGov.ng.

“In 2020, the work of PEBEC was further cascaded to the Enabling Business Environment Secretariat (EBES) – to include local governments, with the Abuja Municipal Area Council (AMAC) serving as a pilot. I think the results have been remarkable. PEBEC, since its inception, has achieved the delivery of 150 reforms and completed reforms and 6 National Action plans – the 60-day accelerator plan. The World Economic Forum in its 2018 global competitive report recognized Nigeria’s business environment as one of the most entrepreneurial in the world, and highlighted Nigeria’s improved competitiveness in the enabling business environment space.”

According to the report gov.ng report, as of March 2022, three Ministries, Departments and Agencies (MDAs) were outstanding in their response rate to complaints. These MDAs, according to the scorecard of the report, are National Agency for Food and Drug Administration and Control (NAFDAC), 100 per cent; Nigeria Immigration Service (NIS), 100 per cent; and Corporate Affairs Commission (CAC), 98 per cent. However, the three least performing MDAs according to the report are the Federal Inland Revenue Service (FIRS), -50 per cent; the National Collateral Registry, -50 per cent; and the Central Bank of Nigeria (CBN), – 50 per cent.

Exporters in the agro sector, to date, still have some complaints about delays in the import and export of their products. Cutting these long waiting periods will ensure that these entrepreneurs are able to meet the demands for their products, ensure the smooth running of their business and conveniently contribute to the GDP of the country.

Given the absence of an enabling environment for large scale industrialization, the only way out is by creating employment through Small and Medium Scale enterprises, as in the case of other developing nations. Overall, the Small and Medium Enterprises have been found to be a veritable source of employment generation.

PEBEC, notwithstanding the many strides it has made over the years, still has much to do. More feasible policies are to be made and geared towards bulldozing elements that have in recent years militated the prevalence of a business-friendly atmosphere in Nigeria.

Source: vanguardngr.com

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