The recent World Bank’s decision to cancel the Ease of Doing Business Report over irregularities has started to generate reactions among Nigerian stakeholders.
To this end, some Nigerian economists are now demanding home-grown doing business reports that will capture the realities of the country while simultaneously commanding international credibility.
Since its debut in 2003, the World Bank’s Ease of Doing Business Report periodically ranks about 190 countries according to how easy it is to do business in each country taking into consideration regulations, property rights, investment laws, credit availability, and contract enforcement, among others.
Questions have been asked on the way forward for the Doing Business report in view of the latest development with some views suggesting that the development pathways that the Doing Business report canvasses are not appropriate in every instance.
The economists whose views were sought by BusinessDay, from industry and academia, hinged their arguments on the negative impact the World Bank’s decision would have on countries and investors that rely on Doing Business report to make investment decisions across a broad spectrum of countries even as the World Bank’s report has always been cited by countries to show how they are growing and modernising.
Femi Saibu, a professor of economics at the University of Lagos says it is unlikely investors across the world rely solely on the Ease of Doing Business Report of the World Bank to make decisions, and that the cancellation should provide an opportunity for the Nigerian government and developing countries to produce credible home-grown reports to supplement the ones produced by the World Bank.
“It is not in the best interest of any country to rely on reports by foreign institutions to gauge domestic economic conditions because those foreign experts may not understand your country as much as the economists that live there. The Nigerian government should seize this opportunity to develop a home-grown report that seeks to achieve similar objectives as the World Bank’s Ease of Doing Business Report”, Saibu says.
“We have the technical skills and manpower to produce the report. We will ensure the report meets international standards. And don’t be surprised, the World Bank may end up recommending the same model to other countries in Africa and beyond”, he adds.
Wilson Rume, a senior economist with the Nigerian Economic Summit Group (NESG), while acknowledging the relevance of the Doing Business report, says with the current development, Nigeria should develop an alternative report that will precisely define what development means.
“When Nigeria moved up on the Ease of Doing Business Rankings, it was widely celebrated”, Rume says.
“But with the current issues of irregularities and frequent changes in the methodology of the report, one thing is clear: Nigeria as a country must develop home-grown solutions to define what development means and also develop suitable indicators to measure progress. The realities are different across countries.
“Now more than ever, we need home-grown solutions, we need to develop how to measure progress at federal, state and local levels. Interestingly, Nigeria has the experts who have the technical resources to execute such tasks”, he suggests.
Olaolu Olayeni, an associate professor of economics at the Obafemi University Ile Ife supports the idea of an alternative report, as according to him if any report was found to be faulty and fraught with irregularities, the cost would be borne by investors and other individuals that allocated resources based on it. And ultimately, such individuals would not be optimising returns.
“The associated losses for relying on such reports are borne by private citizens, multinationals, and governments. And of course, because such data are needed to make informed decisions, it is important to develop another and more robust alternative”, Olayeni says.
Another economist, Tayo Muritala says the cancellation of the Doing Business report will give Nigeria ample time to put its house in order before the next publication.
“This gives an ample opportunity for the country to put its house in order. There are many things we can do before the next Doing Business report. Most importantly, we need to start tracking and monitoring those metrics locally with the intention to provide buffers that will catalyse growth in all areas”, Muritala says.
However, Moses Ojo, a Lagos-based economic analyst disagrees with his colleagues calling for an alternative report, saying that such calls might not have emanated because of altruism.
“The decision to hold on to the report is a welcome development until all issues that led to its cancellation are resolved. However, the call for an alternative report may not be an altruistic call because, considering the reasons for its cancellation, the World Bank still has the capacity to issue a credible report. It only needs to put its house in order”, Ojo says.