Bamidele Famoofo examines the impact of the President Muhammadu Buhari administrationâ€™s Economic Recovery and Growth Plan on Nigeriaâ€™s recent impressive leap in the ease of doing business ranking, where it was grouped among 10 most improved economies in the world in 2017
On Tuesday, March 7, the President Muhammadu Buhari administration formally launched an economic roadmap christened the Economic Recovery and Growth Plan. The ERGP, a medium-term plan covering 2017-2020, broadly targets restoration of growth, human development, and globally competitive economy, in efforts to end the economic crisis and achieve sustained diversification and inclusiveness.
Three months after the launch of the economic roadmap, Nigeria, the largest economy in Africa, wriggled out of economic recession with Gross Domestic Product recording a growth of 0.55 per cent. About four months after the most populous black nation in the world recorded the impressive feat of returning to economic growth, the World Bank says it is officially recognised as one of the top 10 best improved economies globally in 2017.
The vice president, Professor Yemi Osinbajo, who is the chairman of the Presidential Enabling Business Environment Council, said on Tuesday, after the cheering news was broken by the World Bank, that it was the first time in 10 years that Nigeria would record such a huge rise in the World Bankâ€™s Ease of Doing Business ranking.
Nigeria, according to the Ease of Doing Business Report, which captured the performances of 190 countries across the globe, ranked 145th, moving up 24 places, and joining the prestigious league of top 10 most improved economies in the world.
An elated Osinbajo disclosed that Nigeria, which recorded a modest improvement from 170 to 169 in the 2016 ranking, had surpassed the target set by the president. â€œThis year, Mr President set us an ambitious target of moving up 20 places in the rankings. I am delighted that we have exceeded his goal,â€ he stated.
The vice president attributed the significant improvement recorded by Nigeria in the World Bankâ€™s Doing Business ranking to the efficient implementation of the ERGP by all relevant government agencies since it was formally launched some seven months ago. He said the implementation of the plan actually began over a year ago.
According to Osinbajo, â€œImproving the business environment is at the heart of the Buhari administrationâ€™s reform agenda. We are reinforcing our economic turnaround by implementing the Economic Recovery and Growth Plan so businesses operating in Nigeria can thrive and be competitive globally.
â€œFor the first time, coordinated efforts across various levels of governments have been undertaken to make it easier to do business in Nigeria. I commend all stakeholders who worked with us to achieve this excellent result, particularly the National Assembly, Lagos and Kano state governments, and the private sector.â€
Reforms in Lagos, KanoÂ
The World Bank highlighted five reforms making it easier to do business in Kano and Lagos, the two cities covered by the report in Nigeria over the course of last year. The improvements were in the areas of starting a business, dealing with construction permits, registering property, getting credit, and paying taxes.
In the area of company registration, the World Banks says the Corporate Affairs Commission has moved to offer online registration and introduced new features such as electronic stamping of registration documents. Thus, entrepreneurs have been able to register their businesses much faster, within 24-48 hours, thereby saving cost and time
Getting construction permits and registering property in Lagos and Kano states have also become more transparent and easier for businesses with the online publication of all relevant regulations, fee schedules, and pre-application requirements online.Â
Getting access to credit is now easier and Nigeria is placed sixth in the world on this indicator. The government recorded a significant success by collaborating with the National Assembly to pass two new Acts, the Secured Transactions in Movable Assets Act 2017 and the Credit Reporting Act 2017, thereby strengthening the legal framework for access to credit for Small and Medium Enterprises across the country â€“ an important requirement for the success of SMEs.Â
In addition, according to the World Bank report, it has become easier to pay taxes in Nigeria because taxpayers can file tax returns at the nearest Federal Inland Revenue Service office, and electronic payment and filing are gradually gaining acceptance. Â
Going by figures released by the World Bank for Doing Business 2018, the coast is clear for Nigeria to achieve a meaningful economic growth in the years ahead.Â
â€œOn the distance to frontier metric, Nigeriaâ€™s score went from 48.18 in Doing Business 2017 to 52.03 in Doing Business 2018, using a comparable methodology. This improvement of 3.85 points means that in the last year Nigeria has improved its business regulations as captured by the Doing Business indicators in absolute termsâ€”the country is narrowing the gap with the global regulatory frontier,â€ the Bank said.
Â â€˜We are not resting on our oarsâ€™Â
Osinbanjo said regarding the countryâ€™s huge leap in ease of doing business, â€œOur focus remains firmly on ensuring that SMEs operating in Nigeria find it easier to do business. Our ultimate success will be the testimonials received from businesses all across the country. However, this validation from the World Bank endorses the direction that we have been taking to improve the ease of doing business in Nigeria over the last 12-18 months. Although we are beginning to get some positive feedback, we still have a lot of work to do before the full impact of our reforms are felt by all Nigerians.
â€œSome of our critical on-going reforms include a new sub-national â€˜ease of doing businessâ€™ project being implemented in conjunction with all the states and the FCT to replicate similar reforms across the country. We are again collaborating with the National Assembly to deliver an Omnibus Bill to jointly furnish a more business friendly legal framework for Nigerian businesses in the future. Furthermore, the Federal Executive Council has approved the concessioning of our major international airports, which will be fast-tracked to enable easier movement of persons.
â€œWe are also nearing the implementation stage of our National Trading Platform to ensure our cross-border trading is more efficient, while collaborating with other countries to safeguard our security. This policy will also be supported by on-going reform efforts to simplify trading within Nigeria, whether that be the ease of trade in goods, regulatory approvals or the protection of intellectual property.â€
Â More Reforms
On September 27, the second 60-day National Action Plan (NAP 2.0) was approved by an expanded meeting of the PEBEC. NAP 2.0 has over 60 priority initiatives targeted to be attained by December 1, 2017.
According to the PEBEC chairman, the plan covers 11 areas this time, including new areas, such as enforcing contracts, simplifying the procurement process, and trading within Nigeria. It is hoped that a successful implementation of the NAP 2.0 would deliver significant benefits, especially for SMEs, including the fact that it would make 1.3 million MSMEs eligible to do business with government, bring about 75% reduction in average clearance time for foreign travellers, 60% reduction in time to get electricity, 75% reduction in time to register business premises, and 50% reduction in time for filing corporate income taxes.
It would be recalled that the PEBEC was established by the president in July 2016, with a mandate to sustainably and progressively make Nigeria an easier place to do business. The PEBEC is chaired by the vice president, with the Minister of Industry, Trade and Investment as vice chair. Other PEBEC members include 10 ministers, the Head of the Civil Service of the Federation, and Governor of the Central Bank of Nigeria. In 2017 the membership was expanded to include the Deputy Senate Majority Leader as representative of the National Assembly, representatives of Lagos and Kano state governments, as well as the private sector. The Enabling Business Environment Secretariat supports PEBEC in implementing its reform mandate.
Since October 2016, the PEBEC has embarked upon a number of reform efforts, including the concluded 60-day National Action Plan (NAP 60), which was a short term intervention targeted at accelerating specific reforms; the operationalisation of the Executive Order on the Promotion of Transparency in the Business Environment (EO1); and the improvements of business processes, regulations for trading within Nigeria, as well as a new sub-national reforms project in collaboration with state governments.
While the initial NAP 60 had a 70% performance rate, the final results of NAP 2.0 will be announced by PEBEC in December, and the current World Bank reform cycle will end in May 2018.