ESC Report: Despite Macroeconomic Stability, Structural, Legislative Constraints Hamper Competitiveness, Inclusive Transformation

• Says business environment, regulatory, institutional inefficiencies remain major challenges

James Emejo in Abuja

A new report has revealed that despite recent gains in macroeconomic stability, occasioned by reforms, their benefits remained uneven while long-standing structural and legislative constraints to the business climate continued to limit productivity, competitiveness, and inclusive economic transformation.

The “Baseline Report on Priority Legislative Actions to Foster a Business-Enabling Environment in Nigeria”, authored by the Ernest Shonekan Centre (ESC) in partnership with the Policy and Legal Advocacy Centre (PLAC)) with funding from the Foreign, Commonwealth and Development Office (FCDO), was launched yesterday in Abuja. 

It stated that though recent reforms, particularly the liberalisation and unification of the foreign exchange market, removal of fuel subsidies, fiscal consolidation measures, and renewed regulatory interventions – marked a decisive shift toward market-oriented governance – these actions are yet to improve the business environment significantly. 

The report stated that despite Nigeria’s large market size, youthful population, and abundant natural resources, businesses operate under high-cost and high-risk conditions amid unreliable electricity supply, inadequate transport and logistics infrastructure, limited access to affordable finance, foreign exchange scarcity, regulatory unpredictability, insecurity, skills shortages, and sustained inflationary pressure.

The study further stated that a comparative assessment over recent years indicated that many of these constraints have remained largely unchanged, suggesting that previous reforms have only delivered marginal gains rather than a structural transformation capable of significantly improving competitiveness.

Among other constraints of the business environment, regulatory and institutional inefficiencies are major challenges, citing the prevalence of complex and overlapping regulations, frequent policy shifts, weak coordination across agencies, and uneven sub-national implementation which impact compliance costs and create uncertainties for investors.

It stated that though reforms driven by the Presidential Enabling Business Environment Council (PEBEC)and the Business Facilitation Act have improved aspects of business registration and administrative efficiency, gaps remained in regulatory consistency, dispute resolution, contract enforcement, and policy predictability.

The report said, “These weaknesses dilute the effectiveness of broader economic reforms and discourage long-term domestic and foreign investment.”

It stressed that legislative action remained central to consolidating reforms and unlocking a more competitive business environment, adding that priority interventions should focus on enacting business-friendly laws and addressing gaps and inconsistencies in existing laws.

The publication was co-authored by Dr. Oluwasola Omoju, Dr. Olarenle, and Dr. Emily Ikhide. Other include

Khadijat Akewushola, William Umoh, Onome Ebietomira and Osowo-Okime Obia.

It recommended the need to strengthen transparency, accountability, and inclusiveness throughout the legislative process, particularly for high-impact economic and business-related bills currently before the National Assembly.

The report recommded that bills originating from the executive arm should be introduced in the form of executive bills, rather than relying predominantly on private-member bills, especially where proposed legislation affects multiple ministries, departments, and agencies (MDAs).

Among other recommendations, the report said, “To enable transparency and inclusive stakeholder engagement, all bills, particularly those prioritised for economic reform, should be made publicly accessible at appropriate stages of the legislative process. This includes publication on official websites from the first reading to the final passage of the bills.

Also, bills should be made accessible through official National Assembly platforms and circulated to relevant stake-holders. This should go beyond formal compliance to genuine stakeholder participation.”