The year 2019 will be notable in the history of Nigeria as citizens elect those that would steer the wheel of leadership for the next four years. The first quarter of the year is filled with so many uncertainties of how political decisions and activities will affect the business environment.
Nigeria’s performance in key business environment indices published last year is not really good enough. The World Economic Forum in its 2018 global competitiveness report ranked Nigeria 115 out of 140 countries, scoring 48 percent. In institutions, infrastructure and ICT adoption that constitute enabling environment criterion, the country ranked 127th, 124th and 123rd, respectively.
In the World’s Bank ease of doing business index, the country went down by a spot to 146 in 2018 from 145 in 2017. Last Wednesday, Forbes announced that Nigeria was the best 110th country for business and the 15th in Africa, beneath South Africa, Tunisia, Kenya and Namibia.
“Almost everyone is waiting to see how the 2019 polls go. Whichever party wins would be likely focused on the politics of settling down, appointing ministers, and getting them confirmed. So, active governance may not be achieved until the latter part of the year,” Rafiq Raji, chief economist at Macroafricaintel, told BusinessDay.
“If the polls are largely peaceful and the transition is smooth, there would likely be optimism in the aftermath. If not, the dampened mood would likely linger for the rest of the year,” Raji said.
A research analyst at Lagos-based CSL Stockbrokers, Gbolahan Ologunro, told BusinessDay that business environment might not record any tangible improvement this year.
His words, “We did not see structural reforms that will improve the operating environment for businesses. Heading into 2019, I do not envisage a significant improvement in implementation of structural reforms, and removal of structural barriers that will improve the business and operating environment and enabling businesses outperform their peers in other countries.
“For the first half of the year, fiscal authorities that are saddled with the responsibility of implementing such reforms would be concerned with transition of power. Even after elections, issues such as petitions, protests and demonstrations would elongate the lag involved in implementing those reforms.”
In recognition of the importance of an enabling environment to the country’s economic future, the Buhari-led administration instituted the Presidential Enabling Business Environment Council (PEBIC) in July 2016 to reform the business environment, attract investment and diversify the economy to reduce dependence on oil.
PEBIC is determined to eliminate critical barriers and bureaucratic constraints to doing business and push the country to the top 100 in the World Bank’s doing business ranking in 2020 and to the top 50 in 2025.
As it is now, the economy is still fragile, gradually recovering from recession, having expanded by 1.81% in the third quarter of last year, and further projected to grow by 2.3% and 3.01% in 2019 by the International Monetary Fund and Federal Government, respectively.
