Nigeria is one of world’s worst business destinations — World Bank

Despite improving five steps on its ranking last year, Nigeria emerged one of the worst business destinations, the 2015 World Bank’s Ease of Doing Business ranking has showed.

Nigeria ranked 170 among 189 economies covered in the 2015 edition, released on Thursday.

The improvement, which showed a 3.61 percent improvement from 43.72 percent points in 2014 to 47.33 percent points in 2015, reflected the country’s movement from the 175th position in 2014 to its current this year.

In sub-Saharan Africa, the report showed that Nigeria ranked 36 out of 47, barely above other struggling economies like Zimbabwe, Liberia, Mauritania, Congo Republic, Guinea Bissau, Angola, Congo Democratic Republic, Chad, South Sudan, Central African Republic and Eritrea.

The thrust of the report showed that entrepreneurs in 123 economies saw improvements in their local regulatory framework in 2014.

Between June 2013 and June 2014, the report documented 230 business reforms, with 145 reforms aimed at reducing the complexity and cost of complying with business regulation.

About 85 reforms aimed at strengthening legal institutions – with sub-Saharan Africa accounting for the largest number of such reforms, took place during the year.

The report identified Tajikistan, Benin, Togo, Côte d’Ivoire, Senegal, Trinidad and Tobago, the Democratic Republic of Congo, Azerbaijan, Ireland and the United Arab Emirates as the economies that improved the most during the year in areas tracked by Doing Business.

These 10 top improving economies, the report noted, had implemented 40 regulatory reforms making it easier to do business in their respective environments.

The case studies highlighted good practices in eight of the areas measured by Doing Business indicators.

These included the growing efficiency of company registries in starting a business; zoning and urban planning in dealing with construction permits; measuring quality of land administration in registering property, and importance of registries in getting credit.

It also included going beyond related-party transactions in protecting minority investors; trends before and after the financial crisis in paying taxes; judicial efficiency supporting freedom of contract in enforcing contracts; and measuring strength of insolvency laws in resolving insolvency.

Out of 189 economies, Nigeria improved by nine steps from 138 in 2014 to 129 in 2015 in the starting business, while dropping three places in dealing with construction permits category, declining from the 168 ranking to 171.

The country’ best performance, the report showed, was in getting credit to start business, rising 73 spots from the 125 ranking in 2014 to 52 in the current report.

Although the country did not record any change in her 2014 ranking in terms of registering property and trading across borders, the country slipped marginally by two spots in her ranking on paying taxes and resolving insolvency – 177 to 179, and 129 to 131 positions respectively.

The country also dropped one step each in terms of protecting minority investors (dropping from 61 to 60 position), and enforcing contracts (from 139 to 140).

Details of the report showed that to register a company name in the Corporate Affairs Commission, CAC, and pay the mandatory fees at the CAC bank desk, a fresh businessman required a minimum of 11 days. It would, however, take a week to prepare the requisite incorporation documents and stamp duty for the company’s Memorandum and Article of Association.

Similarly, the report said it would take an average of five days to complete the reservation of a unique company name at the CAC after the payment for the mandatory application fees.

To get the declaration of compliance (Form CAC 4) signed before a Commissioner for Oaths or notary public, a businessman would have to wait for a whole day.

It would take the same duration to attempt to make a company seal and registration of a business premises with the Lagos state government, for instance, as well as pay the business premises levy at designated bank.

To register for income tax and the value added tax at the Federal Inland Revenue Service the report said the businessman would require a minimum of four days, while it would take about two days to register for personal income tax pay as you earn, PAYE, at the state tax office.

Source: Premium Times