Strengthening the ease of doing business
The Presidential Enabling Business Environment Council (PEBEC) recently inaugurated its fifth accelerator aimed at rapid implementation of reforms for further improvement of the ease of doing business in Nigeria. The Special Adviser to President Muhammadu Buhari on Ease of Doing Business and Secretary, Presidential Enabling Business Environment Secretariat, Dr Jumoke Oduwole, in Abuja said the National Action Plan (NAP 5.0) is the fifth of its kind since the establishment of the PEBEC in 2016 and will run from February 5 to April 4.
“The fifth National Action Plan provides us with another window to deepen and implement business climate reforms for SMEs. ” As is our custom, the upcoming reforms are being communicated to the public along with the agencies responsible and the expected impact so we can all jointly collaborate and actualise the progress of these reforms.” Oduwole listed the areas of reforms to be delivered by NAP 5.0 as automation of the land registration process in both Lagos and Kano states in order to reduce the time for the application process by half. “Reduce the number of inspections in construction permit through the implementation of joint inspections by related agencies in Lagos. “Improve the overall time by 48 hours in customs clearance at the ports by implementing full pre-arrival cargo clearance process,” she said.
The NAP 5.0 was launched by Alhaji Mohammed Bello, the Minister of the Federal Capital Territory and Oduwole at the FCT Lituation sub-national Ease of Doing Business event on February 4. Bello harped on the importance of coordination between federal and sub-national reforms in the areas of starting a business, enforcing contracts, obtaining construction permits and others. He expressed his administration’s readiness to be a PEBEC case study by making the FCT more coordination.
Over the last three years, Nigeria moved up 39 places from 170 to 131, on the World Bank Doing Business index. During the same period, the World Bank has recognised Nigeria as top 10 most improved economy. Some key reforms implemented since 2016 included the automation of companies’ registration by the Corporate Affairs Commission (CAC) and facilitating the legal frameworks for the operation of credit reporting bureaux. More so, the use of movable assets as collaterals for loans in Nigeria.
The PEBEC was established by President Muhammadu Buhari in 2016 to oversee Nigeria’s business climate reform agenda and is chaired by Vice President Yemi Osinbajo with the Minister of Industry, Trade and Investment as the Vice-Chairman. The PEBEC model aligns with global best practices and includes a strong performance tracking element to guarantee the delivery of reforms for the benefit of SMEs operating in Nigeria. In October, Nigeria moved up by 15 places to 131 in the World Bank’s Ease of Doing Business ranking. The country was 146th position last year. According to the World Bank Group’s Doing Business 2020 study, governments of 115 economies around the world launched 294 reforms over the past year.
Minister of Industry, Trade and Investment and Vice-Chairman of the Presidential Enabling Business Environment Council (PEBEC), Otunba Niyi Adebayo, said: “The steady improvement in Nigeria’s ease of doing business score and rank is a testament to the reforms implemented by this administration over the past four years in line with the reform agenda being implemented at national and sub-national levels across the country since the establishment of the Presidential Enabling Business Environment Council (PEBEC) by President Muhammadu Buhari in July 2016.
“The PEBEC works towards the fulfilment of the projections of the Economic Recovery and Growth Plan (ERGP 2017-2020), which is striving to deliver sustainable economic growth in Nigeria by restoring growth, investing in our people and building a competitive economy as we work towards delivering Mr President’s mandate of bringing 100 million people out of poverty. “The 2020 Doing Business report from the World Bank has reaffirmed the commitment of the newly constituted PEBEC to making Nigeria a progressively easier place to do business and removing the bureaucratic constraints to doing business in the country as we forge ahead in this Next Level,” he said.
Nigeria has always ranked significantly lower in the ease of doing business index. Empirical research funded by the World Bank to justify their work shows that the economic growth impact of improving these regulations is strong. Nigeria has always ranked in the lower end when it comes to the ease of doing business. In 2017, Nigeria was number 169, ranking even below Sudan. According to the World Bank and other economic experts, the ease of doing business had to be improved for Nigeria to prosper economically. Therefore, according to the Nigerian Bulletin, President Muhammadu Buhari in August 2016 approved the Constitution of the Presidential Enabling Business Environment Council (PEBEC).
According to the council, the body will improve ease of doing business in Nigeria, with the following steps:
1. Improving the entry and exit of goods
This would mean improving the Nigerian customs service and removing some sanctions of imports needed by the Nigerian people. It will also mean improving exportation and transport services throughout the country.
2. Improving the entry and exit of people
Legal immigration and emigration will be allowed by the Nigerian government and the PEBEC will see to it that the Nigerian Immigration Service (NIS) run efficiently and without any corrupt practices that would jeopardize international relations.
3. Government transparency
The war on corruption by the Buhari-led federal government will also spread to businesses, both in the private and public sector, to ensure transparency and a dearth of harmful or fraudulent business practices.
4. Improving government procurement process for small businesses
Many believe that Small and Medium-scale Enterprises (SMEs) will be the driving force to bring the Nigerian economy out of recession, and so the government aims to make it easier for these businesses to access loans and make the procurement processes easier for them. The President also approved the establishment of the Enabling Business Environment Secretariat (EBES) as the operational arm of PEBEC. EBES will be domiciled in the Nigerian Investment Promotion Council-NIPC.
According to President Buhari, these are challenging times for the Nigerian economy. The problems had accumulated. Over a long period, from the 1970s, the economy had become dependent on oil receipts and the rent from oil. In 2014, the commodity market collapsed; Oil receipts declined by over 60%. The economy experienced a systemic shock. We are undergoing a necessary and overdue process of painful adjustment. Vital lessons have been drawn. We have a plan that is work in progress, across all sectors of the economy, based on coherence between monetary, fiscal and structural policies to improve productivity and competitiveness and sustained long-term growth. In response to the current challenges, domestic structural reforms are underway for a modernized, integrated and diversified 21st Century Nigerian market economy that is pro-competition, wealth-creating, regulated for the benefits of private and public interests and, re-balanced to insulate it from external and domestic shocks. As President, I believe that leaders must neither surrender nor backload the challenge of institutional domestic policy reforms to diversify and lay the foundations for such an economy. The Government of Nigeria accepts this responsibility.
Such an economy would promote inclusiveness. In the on-going implementation of the Plan for Diversification and Reform by the Ministry of Industry, Trade and Investment, several areas are priority in the objective to achieve diversification, inclusiveness and foster growth. These are:
Creating an enabling environment for business;
The attraction of investment;
Building a platform for the digital economy;
Support for Micro, Small and Medium Enterprises (MSMEs); and,
Expanded market access for Nigerian manufacturers and service providers into regional and global value chains, through ambitiously negotiated Free Trade Agreements (FTAs).
An enabling environment for business will level the playing field through reduction of costs, elimination of bottlenecks and inefficiencies. Transparency will be improved and inclusiveness for all promoted. This is critical. The Presidential Enabling Business Environment Council (PEBEC) has been established. Institutionally, the Enabling Business Environment Secretariat (EBES) is being set-up. Immediate work in this area include entry process for issuance of visas upon arrival in Nigeria; expedited business registration to spur growth and reduce the propensity for informal businesses; elimination of domestic restrictions; trading across borders –to help improve the ability of Nigeria businesses to export more easily; land registration reforms –to increase access to capital and promote growth and development; and, transparency and digitization to simplify processes and create efficiency for both foreign and domestic investors. In the overall Plan, Investments are being made in the sectors of agriculture and infrastructure. An industrial plan is being implemented. Agriculture remains the largest employer of labour. It holds the key to employment, poverty reduction, food security, reducing inequality and inclusion in the first stage of the market economy. Efficient infrastructure for power, roads, railways, ports, transportation and telecommunications are the foundations for a modernized and inclusive economy.
Without any doubt, the thinking of government is this area, is a right step, in the right direction, as this will swiftly galvanize the country’s to greater heights with the shortest time possible and assist in the diversification process of the country’s economy.