WORLD BANK: Nigeria Goes Up in Doing-Business Ranking
Last
week, Africa’s largest economy, Nigeria, made further improvement in the World Bank ease of doing business global ranking which has seen the country move up
five places in the last one year.
The World Bank analysis showed
it is getting better to do business in emerging markets, as Nigeria jumped to
170 out of a total of 189 counties measured in the ease of doing business
survey.
The
report finds that Nigeria now ranks among the top five economies in Sub-Saharan
Africa in two areas: the ease of getting credit and the strength of minority
investor protection. Also some improvement was recorded in the process of starting
up a business.
“The latest World Bank doing
business global ranking which indicated Nigeria’s appreciable progress with
regard to the ease and speed of doing business is encouraging and laudable. The
report showed that Nigeria recorded remarkable improvement in 34 vital thematic
requirements,” said Kayode Omosebi, an analyst with UBA Capital in a response
to questions.
“However,
Nigeria needs to do more to make its economy attractive to foreign investors
and catch up with other developing countries, despite the improvement
recorded.”
In ease of obtaining
credit, Nigeria jumped 73 places up to No.52, while in ease of starting a
business it improved nine places to No. 125. The World Bank report went further to say that Nigeria has
implemented 10 regulatory reforms, starting from 2005, making it easier to do
business.
“We remain hopeful that this
result can be a springboard for improved co-ordination between the national and
sub national governments across party lines,” said Chika Mordi, CEO National
Competitiveness Council of Nigeria.
Nigeria improved its credit
information system through a Central Bank guideline defining the licensing,
operational and regulatory requirements for a privately owned credit bureau. The
country improved access to credit information by distributing credit
information from retail companies.
Also, a majority of reforms
have focused on improving business incorporation, trade, and credit reporting
systems—allowing the country to gradually narrow the gap with the best
regulatory practices in the region.
Between 2013 and 2014, Nigeria
saw an increase of 3.6 points in its distance to frontier score, greater than
the global average increase of 0.8. This is due in large part to an increase in
the coverage rate of Nigeria’s credit reporting system and a reduction in the
company registration fee that made it less costly to start a business.
Nigeria’s upward movement (+5)
compared favourably to the BRICS (Brazil, Russia, India and China) (+0), other
MINT (Mexico, Indonesia, Nigeria, Turkey) (+2) nations and Sub Saharan Africa
(+2).
However, the country recorded a
decline in rankings in the dealing with construction permit, getting
electricity, paying taxes and resolving insolvency.
Abiola Rasaq, analyst at
Associated Discount House Limited said, “It’s appealing to see improvement in
the ease of doing business in Nigeria; moving five notches to rank 170th of 189
ranked countries in the world.
Whilst it is still a long haul
to where a country like Nigeria should be, given the potentials and business
opportunities in the country, I think it is important to look at the components
of the rank to ensure further improvement going forward.”
He said: “In my view, the CBN,
operators, as well as other collaborators in the financial services sector,
have enhanced access to credit, especially at the low-end of the market, with
expectation of further improvement, when the high interest rate tapers out.
Most state governments and the CAC have also relaxed rigid rules on starting or
registering businesses, thus improving our score on this component of the ranking
criteria.”
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