The executive orders recently signed by acting President Yemi Osinbajo emphasise a resolve to surmount obstructive official and unofficial procedures in the pursuit of economic recovery. But the government must ensure their honest implementation, writes Vincent Obia
In the wake of new policies, such as the executive orders issued by the acting president, Professor Yemi Osinbajo, on May 18, the public tends to react with enthusiasm. This was obvious when Osinbajo announced the three executive orders with specific instructions targeting the removal of obstacles to private business, government budgeting, and movement of people and goods between Nigeria and other countries. The orders aim to promote transparency and efficiency in the countryâ€™s business environment, support local contents in public procurement by the federal government, and ensure timely submission of annual budgetary estimates by ministries, departments, and agencies of the federal government.
The government ultimately aims to create an enabling environment for business. Nigerians are enthusiastic and they have bought into the vision of the government regarding the executive orders. But the people would be hoping for diligent and sincere implementation of the policies.
â€œThis announcement alone would have excited an army of 21st Century young Nigerian entrepreneurs who have been facing depression based on rejection of their certified products by government agencies and parastatals,â€ chairman of Zinox Group, Dr. Leo Stan Ekeh, is quoted as saying. â€œIt is a great development in our new Nigeria and I pray the federal government demonstrates the will to implement this to the letter in order to activate real and progressive development in the country.â€
The first of the three executive orders emphasises the promotion of transparency and efficiency. It requires every federal government MDA to publish the comprehensive list of all requirements or conditions for obtaining products and services within their respective areas of responsibility. The information, which must be publicised and â€œconspicuously pasted on the premisesâ€ of the MDAs, include the requirements for permits, licenses, waivers, tax related processes, filings, and approvals.
To try to forestall sabotage and ensure accountability, the order states, â€œIt shall be the responsibility of the head of the relevant MDA to ensure that the list is verified and kept up-to-date at all times. If there is any conflict between a published and an unpublished list of requirements, the published list shall prevail.â€
To facilitate easy movement between Nigeria and other countries for business and tourism, the order directs that the Consular Office of Nigerian Embassies and High Commissions must process tourist and business visas to Nigeria within 48 hours of such applications.
It states, â€œA comprehensive and up to date list of requirements, conditions and procedures for obtaining visa on arrival, including estimated timeframe, shall be published on all immigration-related websites in Nigeria and abroad, including embassies and High Commissions, and all ports of entry into Nigeria.
â€œThe processing of issuance of visas on arrival shall be carried out in a transparent manner. Visas on arrival shall be granted at all Nigerian ports of entry once applicants have met all the published requirements.â€
The order seeks to stop the lawless acts of touting, bribery and corruption at the ports.
To restore sanity to the airports and seaports, the order tries to eliminate the unwieldy multiplicity of supervising agencies at the ports by merging their operations into a single interface centre for each entry or exit point.
The executive order directs the Corporate Affairs Commission to ensure complete automation of all business registration processes.
On support for local contents in public procurement, which is the focus of the second executive order, the acting president directs that henceforth, all federal government MDAs â€œshall grant preference to local manufacturers of goods and service providers in their procurement of goods and services.â€
The order says at least 40 per cent of the procurement expenditure must be on local goods and services for the following: uniforms and footwear, food and beverages, furniture and fittings, stationery, motor vehicles, pharmaceuticals, construction materials, and information and communication technology.
In an attempt to overcome the protracted menace of delayed budgets, the third executive order directs all MDAs to submit their schedule of revenue and expenditure estimates for the next three financial years to the Minister of Finance and the Minister of Budget and National Planning before the end of May every year. It directs all MDAs to submit their budget estimates for the next financial year to the finance and national planning ministries before the end of July every year.
â€œHeads of agencies and chief executive officers of government owned companies shall take personal responsibility and be subject to appropriate sanctions for any failure to comply with this order,â€ Osinbajo states.
The executive orders, undoubtedly, go to the heart of the issues that have for a long time hindered investment in the country. They include the questions of transparency, inconsistency in tax policies, and irregular service charges. Consul-General, United States Consulate, Lagos, Mr. John Bray, said on March 28 in Lagos, during the March 2017 edition of the Nigerian-American Business Dialogue, that American investors were being scared away by these concerns.
â€œIf these concerns are not addressed, they will not put their money in Nigeria to create the jobs Nigeria badly needs,â€ Bray stated, referring to American companies, at the dialogue with the theme, â€œImproving the Ease of Doing Business in Nigeria.â€ He added, â€œNigeria has the capacity and resources to fix the challenges I have listed; surely it will not be easy, but we will do it.â€
The session was organised by the Nigerian-American Chamber of Commerce.
The federal government has of late engaged in conscious efforts to ease up the business environment as part of its plans to expand the level of economic output. To coordinate this effort, the government has set up the Presidential Enabling Business Environment Council. In February, the PEBEC approved a 60-day national action plan to be implemented across its three priority areas, namely, entry and exit of goods, entry and exit of people, and government transparency and procurement. The action plan was intended to deliver tangible changes for small and medium scale enterprises in Nigeria, and help improve the countryâ€™s rankings on the World Bank Doing Business Index for 2018. Nigeria currently ranks 169 out of 190 on the index.
The federal government says it has recorded achievements in the areas of starting a business, registering property, facilitating trade across borders, entry and exit of people, getting credit, and construction permits, based on the targets set in the action plan.
Worst Investment Inflow
Despite the professed gains, the consequences of the obstructive features of the Nigerian business environment became apparent recently as the economy recorded its second worst investment inflow in 10 years. The capital importation report released on Wednesday by the National Bureau of Statistics shows that the country attracted a total investment of $908.27 million in the first quarter of the 2017 fiscal year. This is down from $1.55 billion, which the economy attracted in the fourth quarter of 2016, representing a whopping $641.73 million (41 per cent) decline in foreign capital inflow.
The capital importation is divided into three main investment categories by NBS: foreign direct investment, portfolio investment, and other investment. Other investment presents the largest component of the imported capital, accounting for $383.28 million or 42.2 per cent of the total in the first quarter of 2017. Loans continue to dominate the other investment category, accounting for 96.35 per cent of the investment type in the first quarter 2017.
The second largest component of capital importation in the first quarter of 2017, according to the report, is portfolio investment, which accounts for $313.61 million, or 34.53 per cent of the total. This represents a growth of 10.34 per cent relative to the previous quarter, and 15.71 per cent relative to the same quarter of 2016.
FDI is the smallest component of capital importation in the first quarter of 2017, as has generally been the case since 2013, according to NBS. FDI accounts for $211.38 million, or 23.27% of the total. This represents a quarterly decline of 38.66%, but a year on year increase of 21.17%.
NBS notes that there was a high-profile sale of bonds denoted in foreign currency during the quarter, explaining, however, that there is a â€œlag between subscription and actual payment.â€
It says capital importation was particularly low in January, at $187.90 million, stressing that this is only the fourth month since 2007 in which capital importation was less than $200 million.
â€œThe fall in FDI comes after four consecutive quarters of increase,â€ NBS states.
Given the unsavoury foreign capital attraction statistics and the economic turndown that accompany it, greater ease in the process of doing business is certainly what Nigerians would like to see. The economic environment needs to be freed from the spectre of wanton bottlenecks.
Expectedly, the private sector has largely bought into the governmentâ€™s plans to reflate the economy.
Director-general of Abuja Chamber of Commerce and Industry, Chijioke Ekechukwu, says regarding the recent executive orders, â€œFrom the perspective of the ACCI, the orders will allow entrepreneurship to thrive and encourage the growth of the economy. It will reduce the pressure on foreign currency, especially in the importation of goods and services.
â€œOnce we are able to handle the issue of petroleum products importation, the pressure on exchange rates will be reduced. These are things that will drive our economy and also make a growth pattern plan work.â€
Ekechukwu believes the orders on ease of doing business would help to eliminate the problem of multiple taxation, which has been the bane of many businesses in the country, especially the micro, small and mediums sized enterprises.
Pharmaceutical Manufacturing Group of the Manufacturers Association of Nigeria has also lauded the executive orders, particularly as they relate to support for local content in public procurement. PMG-MAN chairman, Mr Okey Akpa, says the orders have the potential to make Nigeria achieve medicines security and boost national self-sufficiency in pharmaceuticals and related health commodities. Akpa calls for faithful implementation of the orders, which he believes can stimulate employment in the pharmaceuticals sector, improve the economy, and facilitate export of Nigerian medicines.
Ekeh says, â€œGranting preference to local manufacturers is a sure way of igniting the spirit of indigenous entrepreneurship. This is the standard the world over. Nigeria boasts a number of world-class companies whose products can compete favourably with those of their foreign counterparts. The problem has always been the right form of support from the government.â€
The support that the private sector craves is likely to come with the execution of the recent policies. The changes in the specific sectors mentioned in the orders are expected to ripple out and bring improvement in other areas.
The executive orders announced by the presidency on May 18, to all intents and purposes, represent the most thorough and determined attempt yet by the federal government to remove obstacles to business, which are largely attitudinal and behavioural. The new policies are certainly an effective help in the efforts to actualise the economic vision of the President Muhammadu Buhari administration.
The next few months will be interesting as the world watches to see the implementation of the executive orders.