Consolidating the Nigerian Economy through Business Regulatory Reform 
by Stephen Isayinka (MICMC, AUSIP)
According to the most recent World Bank annual ratings, Nigeria ranks 131 out of 190 economies in terms of the ease of doing business. This is due in part to the fact that the Nigerian business environment has been colored and polarized by numerous challenges causing fear due to insecurity, uncertainty, political, environmental, and cultural disparities, resulting in the failure of numerous businesses, especially micro, small, and medium-sized enterprises (MSME), and their relocation to other countries.
A report by the United Kingdom (UK, Department of International Trade) : Overseas business: Nigeria outlines the obstacles facing the Nigerian business environment: “The Nigerian economy is characterized by extreme inequality and significant economic disparities between the North and the South, poor infrastructure, a complex and opaque regulatory environment, corruption, and a rapidly growing population.” Oil provides nearly all of Nigeria’s foreign exchange earnings and the majority of its government revenue.
Nigeria’s slow economic growth is a major cause for concern. The most recent IMF projections indicate that the economy will expand by 2.7% in 2022 and between 2.6% and 2.7% from 2022 to 2026, which is barely above population growth estimates and insufficient to create the number of jobs needed and reduce poverty. Too few jobs are created for the 3.5 million young Nigerians who reach working age each year, thereby increasing the number of underemployed and unemployed.” Despite these obstacles and the fact that there is still much to be done, Nigeria is steadily improving the ease of doing business, thereby becoming one of the world’s leading hubs for business, trade, and investment. In July 2016, President Mohammad Buhari inaugurated the Presidential Enabling Business Environment Council (PEBEC), chaired by the Vice President, in an effort to improve Nigeria’s ease of doing business rankings.
The PEBEC consists of the Minister of Industry, Trade, and Investment (MITI) as Vice-Chair, nine other ministers, the Head of Service of the Federation, the Governor of the Central Bank, National Assembly representatives, and members of the private sector. The mission of PEBEC is to recommend institutional reforms to increase Nigeria’s investment attractiveness.
In July 2016, the Federal Executive Council, FEC, presided over by Vice President Yemi Osibanjo, approved the Presidential Enabling Business Environment Council, PEBEC, a bill that aimed to establish and maintain a conducive business climate in the country. The Omnibus Bill seeks to amend twenty-three (23) business-related laws in Nigeria, and its benefits include, among others, ensuring efficiency in public service delivery in terms of time, cost, and procedure for conducting business, improving transparency, removing obsolete provisions from relevant laws, and providing incentives to encourage Micro, Small, and Medium Enterprises (MSMEs) participation in business.
The government was convinced that implementing due process, diligence, and ease of doing business would facilitate the delivery of national economic prosperity and the attainment of distinct national goals. The PEBEC began to make notable progress by removing bureaucratic obstacles to doing business and making the country a more conducive environment for starting and expanding businesses.
During the 5th Anniversary of the PEBEC, the Special Adviser to the President on the Ease of Doing Business (EoDB), Dr. Jumoke Oduwole, stated: “Other smaller countries than Nigeria are able to get the entry and exit of people – immigration issues, visa on arrival, etc. Therefore, we decided to work on it. The PEBEC was inaugurated in July 2016, and its secretariat began operations in October of the same year.” We chose to prioritize transparency. A better approach would have been to demystify information and provide it to Nigerians – businesspeople who wish to conduct business in Nigeria – in order to ensure that people have the information they need to make sound decisions. We decided to have a strong focus on technology, requiring agencies to have functional websites with essential, high-quality content. When attempting to drive economic reforms, the government tends to focus on infrastructure, human capital development, and land reforms, and overlooks the significance of delivering institutional reforms in the public sector, which is a significant factor in launching and sustaining economic growth and development.
With over 160 reforms implemented since its inception, PEBEC has made significant strides in its mission to make Nigeria an easier place to start and grow a business. The Council and its Secretariat have enjoyed cordial and productive relationships with the Senate, House of Representatives, Judiciary at both the federal and sub-national levels, all types and levels of businesses in the private sector, Nigerians in the diaspora, media, organised private sector, non-governmental organisations, development partners, development financial institutions, friends of Nigeria, and the diplomatic corps.
In line with the Federal Government’s commitment to improving the business environment in Nigeria, the National Action Plan was introduced for the first time in February 2017 and has since evolved into an annual 60-day reform accelerator and tool intended to coordinate the effective delivery of priority reforms by select ministries, departments, and agencies. The 7th National Action Plan (NAP 7.0) was designed to break away from the lackluster performance of the previous two iterations, NAP 5.0 and NAP 6.0, held in the first quarters of 2020 and 2021, in which the relevant ministries, departments, and agencies performed below par at 44% and 43% respectively. It focuses on five major areas: port/trade facilitation reforms, automation reforms, regulatory reforms, and compliance reforms for Executive Order 01/ReportGov.NG.
Regarding agro-exports, these reforms will categorically target the frontline experience of businesses. In addition, it aims to enhance the travel experience at Nigeria’s airports and automate the incorporation of businesses by the Corporate Affairs Commission. This year, NAP will encourage taxpayers to adopt electronic tax filing. In addition, MSMEs will benefit from enhanced complaint resolution on the ReportGov.ng platform and an increase in the number of listed MDAs. The 8th of March, 2022 Midway Report on Non-Agro Export Reforms indicated that 39% of business registration, 49% of trademarks registry, 61% of insolvency resolution, and 33% of access to electricity have been completed. The remaining percentages are 29% for taxes, 0% for business permits and expatriate quota, 31% for airport reforms, and 25% for Executive Order 001 and ReportGov.ng. The total number of reforms was 28, and the number of outstanding reforms was also 28. Thirty percent of reforms were completed.
Similarly, the Agro-Export reforms progress report revealed that 32% of the payment and verification process, 19% of the inspection process, and 19% of the terminal operators and shipping lines have been completed, while only 17% of the access and documentation process has been completed. There were 30% of completed reforms, 30% of outstanding reforms, and 22% of completed reforms in total.
Prof. Yemi Osinbajo explained in his remarks at the 5th Anniversary of PEBEC that the mandate of PEBEC was to find ways to alter Nigeria’s growing reputation as a difficult business environment. According to him, removing bottlenecks and obstacles, as well as attempting to change the orientation of regulatory authorities and public servants who interact with businesses seeking government licenses, approvals, and other regulatory requirements, appeared relatively straightforward. Difficult business conditions result in fewer investors (both domestic and foreign), fewer jobs, and fewer opportunities.
According to the report on gov.ng, as of March 2022, three Ministries, Departments, and Agencies (MDAs) had an exceptional complaint response rate. According to the report’s scorecard, these MDAs are the National Agency for Food and Drug Administration and Control (NAFDAC) with a score of 100 percent, the Nigeria Immigration Service (NIS) with a score of 100 percent, and the Corporate Affairs Commission (CAC) with a score of 98 percent. According to the report, the three MDAs with the poorest performance are the Federal Inland Revenue Service (FIRS), with a performance rating of -50 percent, the National Collateral Registry (NCR), with a rating of -50 percent, and the Central Bank of Nigeria (CBN), with a rating of -50 percent.
Little wonder There are still some complaints from agro exporters about delays in the import and export of their products. These entrepreneurs will be able to meet demand for their products, run their businesses efficiently, and contribute to the country’s gross domestic product (GDP) if these lengthy waiting periods are shortened.
In conclusion, when large-scale industrialization is highly challenged, the solution is to foster the growth of small and medium-sized enterprises (SMEs), as it can be seen in many developing countries of the world. It has been determined that small and medium-sized businesses (SMBs) are a significant driver of new job opportunities. Although PEBEC has made great strides over the years, a lot of work remains to be done. There have been recent obstacles to Nigeria’s business-friendly environment that must be eliminated through the introduction of more feasible business policies.
