After the country went in a recession as a result of the collapse in oil prices, it became clear to the federal government that Nigeria cannot continue to rely on an unstable commodity like oil to drive its economy. Virtually all governments since the oil boom period had made this pledge but the country continue to hopelessly depend on rent from oil for its sustenance. As at the last count, oil account for over 70 percent of government revenues and 95 percent of foreign exchange into the country. And because of the country’s reliance on oil, other areas were completely neglected, especially the ease of doing business. The country was particularly notorious for its difficult business environment that it was ranked 170th out of 189 countries on the World Bank’s ease of doing business index.
Beyond rhetoric then, new ways had to be sought to reform the business environment, attract investment and diversify the economy away from oil.
That was exactly what the government set about doing. In July 2016, the Presidential Enabling Business Environment Council (PEBEC) was inaugurated under the chairmanship of the Vice President, Yemi Osinbajo with Minister for trade, Okey Enalema serving as vice chair. To show its seriousness towards implementation, a secretariat – the Enabling Business Environment Secretariat (EBES) – domiciled in the office of the Vice President, was set up to drive implementation. A departure from the past was the decision of the PEBEC to adopt a global best practice model with performance tracking elements which is measured by the World Bank Ease of Doing Business Index (DBI).
The reforms were particularly targeted at micro, small and medium scale enterprises (MSMEs) which account for more than 90 percent of all registered businesses in Nigeria, provide about 84 percent of jobs and contribute just under 50 percent of GDP to the economy.
The reforms were basically to remove critical bottlenecks and procedural restrictions to doing business in Nigeria and to improve on Nigeria’s World Bank Ease of Doing Business Index ranking. From starting a business to getting a location to getting finance to dealing with day-to-day operations and ultimately to operating in a secure business environment, the reforms are meant to reduce costs and time and to make the processes of setting up and doing business in Nigeria simpler and effective.
Within a span of three years, PEBEC has succeeded in driving key reforms in key areas such as improving access to credit for individuals and SMEs, improving entry and exit into the country (Visa-on-arrival applications can be done online and is issued within 48 hours), registering properties, particularly in Lagos and Kano, access to electricity (reduced procedures for grid connectivity), reduced time and procedures for registering a business, paying taxes, and dealing with construction permits, enforcing contracts, protecting minority investors, resolving insolvency, facilitating trading across borders and within Nigeria and selling to government.
For example, reforms on enforcing contracts, driven by the Lagos state and Kano states judiciaries in collaboration and with the support of the Enabling Business Environment Secretariat, resolved to set up specialised small claims commercial courts in Lagos and Kano, train magistrates and court officials to handle specialised small claims commercial courts in Lagos and Kano, limit number of adjournments allowed in small claims commercial courts in Lagos and Kano, introduction of pre-trial conference for specialised small claims commercial courts and publication of Court of Appeal judgments.
Of course, a lot of these reforms could not be effected without a revise to the Company and Allied Matters Act of 1990. With a great push from the Presidential Enabling Business Environment Council (PEBEC) and the Enabling Business Environment Secretariat (EBES), the Senate, on May 15, passed the revised CAMA and the House of Representatives concurred in January 2019.
Interestingly, the National Assembly also had a National Assembly Business Environment Roundtable (NASSBER) which was created as a platform for the legislature, the executive and the private sector to engage, deliberate and take action on frameworks that will improve Nigeria’s business environment through a review of relevant legislations and provisions of the Constitution.
Since the launch of the council, PEBEC/EBES has implemented several reforms with direct and positive impact on business owners. Nigeria moved up 24 places over 3 years to 146th place in the 2018/19 Ease of Doing Business report. The PEBEC’s objective is to move Nigeria’s ranking to sub-100 in the 2019/20 World Bank Doing Business Index.
There is no doubt, much needs to be done to improve Nigerian’s business environment generally. But these are beautiful starts and the government must be encouraged to continue to work to improve the ease of doing business in Nigeria