One of the appointments made by the Federal Government that attracted the attention of those keen on seeing the nation’s business environment improved was that of the governing board of the Corporate Affairs Commission (CAC), chaired by Otunba Funsho Lawal, a seasoned enterpreneur and technocrat. With business interests across various sectors, including oil and gas, financial services, real estate, and information technology, Lawal brings to the CAC board, a wealth of experience spanning over three decades.
A member of the Nigerian Economic Summit Group (NESG), Lawal, who holds a B.Sc and M.Sc from the University of Wisconsin-Madison, USA, joined CitiBank Nigeria in 1985, and rose to the position of Assistant Vice President before joining Oceanic International Bank as a pioneer staff. He is the executive chairman of Sogenal Oil and Gas Company, an indigenous oil exploration and production company and a director at the Transnational Corporation of Nigeria Plc (Transcorp) - a diversified conglomerate with strategic investments and core interests in the hospitality, agribusiness and energy sectors.
His appointment as chairman of CAC board is coming at a time when the nation is pushing for increased foreign investment and development of small and medium scale industries as part of the development agenda of government and to urgently tackle the alarming level of unemployment and poverty which an expanding business sector would address.
Unlike several boards of federal agencies and parastatals, because of the pivotal role of the commission in the nation’s overall economic development, the CAC board is made up important professional bodies and strategic government ministries and agencies. These include representatives of the legal profession; accounting profession; Nigeria Chamber of Commerce, Industries Mines and Agriculture; Securities and Exchange Commission; Manufacturers Association of Nigeria; Federal Ministry of Commerce; Federal Ministry of Industries; Federal Ministry of Justice; and Registrar-General of the Commission.
The commission is charged with the regulation and supervision of the formation, incorporation, management and winding up of companies; establishing and maintaining companies registry and offices in all the states of the federation; arranging and conducting investigation into the affairs of any company where the interests of the shareholders and the public so demand; and registering business names, and incorporated trustees.
Though, Lawal’s rich background as a key player in the Nigerian business sector is seen as an added advantage for the commission, the new board has a huge responsibility to improve certain indices of Nigerian business environment. Nothing speaks to the fact that there is an urgent need to improve the nation’s business environment, particulary the process of starting a business, than the latest report on the Ease of Doing Business which ranked Nigeria 131 on the list of 185 countries assessed.
The report, titled “Doing Business 2013: Smarter Regulations for Small and Medium-Size Enterprises”, based the overall ranking on key indicators like: starting a business, dealing with construction permits, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency, and getting electricity.
In that report, Nigeria ranked 119 in starting a business; dealing with construction permits, 88; getting electricity, 178; registering property, 182; getting credit, 23; protecting investor, 70; paying taxes, 155; trading across borders, 154; enforcing contracts, 98; and resolving insolvency, 105.
Mauritius and South Africa are the only African economies among the top 40 in the global ranking, while Nigeria was ranked 14 among Sub-Saharan African countries, and third in West Africa, coming behind Ghana and Cape Verde. Analysis of one of the indicators, for instance, would explain the differences in the ranking of Nigeria and some of the countries that top the chart. For instance, a comparison between Nigeria and Mauritius, which is ranked 19 globally and overall best in Africa, would show that while it takes eight procedures and 34 days to start a business in Nigeria, it takes five procedures and six days to do the same in Mauritius.
In US, which is ranked 4 on the Ease of Doing business and 13 in starting a business, has six procedures and a time duration of six days, while Singapore, which is ranked number one on the Ease of Doing business and 4 in starting a business has three procedures and a time duration of three days. Egypt, ranked 109 in ease of doing business, 26 in starting business, has 6 procedures, and a time duration of 7 days. France, which is ranked 34 in ease of doing business, 27 in starting business, has 5 procedures, and a time duration of 7 days, while Canada ranked 17 in ease of doing business, and 3 in starting business, has 1 procedure and a time frame of 5 days. However, starting a business is easiest in New Zealand, where it takes 1 procedure, one day, less than one per cent of income per capita and no paid-in minimum capital.
Also in the past eight years, Madagascar, one of the economies advancing furthest toward the frontier in regulatory practice in starting a business set up a one-stop shop and improved its services over time, simplified registration formalities and the publication requirement, and reduced and then progressively eliminated the paid-in minimum capital requirement. The Ease of Doing Business Report 2013 also noted that evidence from several studies had shown that reforms making it easier to start a formal business were associated with increases in the number of newly registered firms and sustained gains in economic performance, including improvements in employment and productivity. Citing Canada and the United States as example, the report said empirical research found that economic growth is driven by the entry of new formal businesses rather than by the growth of existing firms.
It also noted that simplifying company registration was the most common feature of business start up reforms in the past eight years by most countries who recorded improved ranking in the ease of doing business, specifically as it relates to starting a business. Some of the countries created or improved one-stop shop, cut or simplified post-registration procedures (tax registration, social security registration, licensing), and introduced or improved online procedures, and simplified registration formalities (seal, publication, notarization, inspection, other requirements).
The report also revealed that the introduction of information and communication technology had been a common feature of start-up reforms, and currently, 106 economies use it for services ranging from name search to full online business registration, of which more than 40 offer electronic registration services. It was also revealed that online services were increasingly being offered in developing economies, while several economies with the fastest business start up - New Zealand, Australia, Singapore, Canada, Portugal, Denmark and Estonia - offer electronic registration. According to the report, currently, 88 economies have some sort of one-stop shop for business registration, including the 58 countries that established or improved theirs in the past 8 years, and ninety-one economies require no paid-in minimum capital, and many others have lowered the requirement.
With the Ease of Doing Business Report 2013, Lawal’s board, already, has a template on which it could take off. It should therefore take concrete steps and canvass for policies that would engender conducive business environment and remove red tapes that hinder the creation and growth of businesses in the country. With the caliber of individuals and professional bodies on the board, this shouldn’t be an insurmountable challenge.