Wednesday, April 23, 2014

Jonathan’s reforms ineffective, another World Bank Report shows

Published:

President Goodluck Jonathan

The report showed that Nigeria has actually gotten worse for investors in the last one year.

 

Despite the reforms of the Jonathan administration, the Nigerian Economy has not fared better for potential investors in the past one year, the latest global Doing Business Report 2013 shows.

Nigeria kept her 131st overall ranking in ease of doing business in 2013, same as in 2012, out of 185 economies that featured in the survey.

At least 13 African countries had better business climates for investors. They include South Africa, ranked 39th, Mauritius-19th, Rwanda-52nd, Botswana-59th, Ghana- 64th, Seychelles-74th, Namibia 87th, Zambia 94th Uganda 120th, Kenya 121st, Cape Verde 122nd Swaziland 123rd and Ethiopia 127th.

 

It’s South Africa all the way

The report also shows the reason why potential investors in Africa prefer to invest in South Africa than Nigeria.

Nigeria was also ranked 18th  for starting a business as against South Africa’s 6th; 42nd for getting electricity against South Africa’s 31st position; 4th in getting credit as against South Africa 1st position; 9th for protecting investors against South Africa’s 1stposition, and 16th for enforcing contracts against South Africa’s 13th position.

“Of the 50 economies making the most improvement in business regulation for domestic firms since 2005, 17 are in Sub-Saharan Africa,” the report said. “From June 2011 to June 2012, 28 of 46 governments in Sub-Saharan Africa implemented at least one regulatory reform making it easier to do business.”

A high ranking on the ease of doing business index means the regulatory environment is more conducive to the starting and operation of a local firm.

Nigeria was not mentioned among any of the countries identified as making significant progress in the growth of their economies contrary to claims in government circles that the country’s economy was one of the fastest growing economies of the world.

“Nigeria introduced a new compulsory labor contribution paid by the employer,” the report said. “Areas of business regulation reform: Paying taxes (making it more difficult).”

Some of the key findings showed Poland as the global top improver in 2012, with enhanced ease of doing business through four institutional or regulatory reforms, particularly in areas of registration of property, paying taxes, enforcement of contracts, and resolving insolvency.

Nine other economies were recognized as having the most improved ease of doing business across several areas of regulation as measured by the report, including Sri Lanka, Ukraine, Uzbekistan, Burundi, Costa Rica, Mongolia, Greece, Serbia, and Kazakhstan.

On the global scale, 108 economies implemented 201 regulatory reforms during the period to make it easier to do business, with reform efforts focused on making it easier to start a new business, increasing efficiency of tax administration and facilitating trade across international borders.

Singapore topped the global ranking on the ease of doing business for the 7th consecutive year, followed by Hong Kong SAR, China, New Zealand, United States and Denmark.

Doing Business 2013, which focused on the theme, “Smarter Regulations for Small and Medium-Size Enterprises,” assessed regulations affecting domestic firms in 185 economies and ranked the economies in ten key areas of business regulation, such as starting a business, resolving insolvency and trading across borders.

The World Bank report of the ranking released on Tuesday, which covered regulations measured from June 2011 through May 2012, revealed that Nigeria’s economy stagnated on two criteria during the period, with no changes recorded in its 2012 ranking of 119thposition for starting business and 182nd position for registering property.


Very poor compared to previous

Except an appreciable improvement in the criterion for getting credit, where it improved by 15 steps in the ranking from 38th position last year to 23rd in the latest report, the country performed dismally in all other criteria, with the worst performance of 16 steps decline manifesting in paying taxes, which went down from 139th position last year to 155th.

Nigeria fell four places in ranking from 66th position last year to 70th in terms of protecting investors; and two steps down the slope, from 86th position last year to 88th position, for dealing with construction permits; while going down one step from 177th last year to 178th for getting electricity.

The country did not fare any better for ease of trading across borders, declining from 153rd position last year to 154th; enforcing contracts, with a dip in ranking from 97th last year to 98th; and resolving insolvency, with a fall in ranking from 104th position last year to 105th.

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