The International Finance Corporation (IFC) has said that though indirect costs incurred by Nigeria’s manufacturing sector in doing business have improved since 2006 in overall terms, challenges of electricity, bribery and transportation still contribute to the relatively high cost.
The IFC warned that the indirect cost indices are high when compared with other emerging markets. For instance, electricity costs alone account for over five percent of cost of sales of the manufacturing sector in 2009 while bribery accounts for over four percent, which is highest when compared with Brazil, South Africa and Indonesia.
Gravette Brown, Senior Investment Officer, Manufacturing Services- African Department in IFC, who addressed members of Nigerian Institute of Management (NIM) at its maiden breakfast meeting yesterday in Lagos said the indirect costs incurred by the manufacturing sector still need to come down for the Nigerian economy to compete favourably in the global market.
This is important as investments flow across Africa.
In terms of ease of starting a business, she said Nigeria ranks 119 out of 185 countries. On dealing with construction permits, Nigeria ranks 88th, while it ranks 178th in getting electricity. On protecting investors, paying taxes and enforcing contracts,
Nigeria ranks 70th, 155th and 98th respectively.
Gravette, who spoke on the “Impact of World Bank/IFC Initiatives on the Nigerian business environment , said both the IFC and the World Bank are working across multiple sectors, primarily infrastructure, agro business and SME development to support Nigeria’s businesses at both the government and business for growth and development.
According to her, the IFC alone has an investment portfolio of $1.1 billion in Nigeria in over 20 years and the World Bank has an investment portfolio of over $4.7 billion. This year alone, the World Bank has invested over $95 million in education, transportation, water and other infrastructure.
These investments she said, are to facilitate wealth creation across all segments of society by consolidating gains and further advance critical infrastructure development in power and transportation networks and remove impediments to growth in the country’s critical agricultural sector (a major source of employment in the country) with potential to improve access to cheaper, more high quality food to Nigeria and the sub-region.
She also said the two world bodies further support development of the private sector through advisory programmes to the business community and clients in (corporate governance, business edge, and climate change and) Government.
Also speaking at the maiden edition of NIM, the institute’s president, Michael Olawale-Cole, said the corporate breakfast forum was recently introduced by the institute as one of the 21st Century compliant value-added services to its corporate members, whom it has always leveraged for support.
“In addition to providing a forum for the institute to interface directly with its corporate members over breakfast, the forum affords the members the rare opportunity to interact with one another, compare notes and network, while rubbing minds on contemporary issues bordering on business, in a convivial and relaxed environment”, Olawale-Cole said.