Nigeria’s business environment deteriorating — World Bank

The environment for doing business in Nigeria worsened in 2014 from 2013.

This was disclosed by the World Bank on Monday.

The Annual Doing Business Report in Nigeria 2014, which benchmarks 35 Nigerian states in addition to Abuja, covered four indicators including starting a business, dealing with construction permits, registering property, and enforcing contracts.

The report, launched in Abuja on Monday, showed the country slumped nine spots from its 138th ranking out of 189 countries covered by the report in 2013 to 147th position in 2014.

Other details of the report revealed the the country also performed poorly in its starting a business ranking, down from the 114th position in 2013 to 122nd; dealing with construction permits, from 146th to 151st, and better electricity from 184th to 185th.

In registration of property, the report said the country’s operational conditions did not witness any improvement or change from its 185th position in 2013. The same situation applies in its ability to resolve insolvency in business, with the country stuck in 107th position attained in 2013.

The country however recorded marginal improvements in the areas of trading across borders (improving one step from 159th ranking to 158th position) and enforcement of contracts (from 138th position to 136th), ability to guarantee credits to prospective investors declined from the 11th ranking in 2013 to the 13th position; from 67th to 68the ranking for ability to protect investors and 167th ranking to 170th position for paying of taxes.

The World Bank Group said the new report showed that most states across Nigeria continued to implement regulatory business reforms, with Cross River, Ekiti, Niger, Ogun, and Rivers making the biggest strides.

The report said there was still room for states to learn from each other, and implement good practices in some parts of the country.

The report also revealed that 22 states improved in at least one of the areas measured since the last benchmarking exercise in January 2010.

The findings showed big strides was achieved in the past few years by some states. Ogun, one of the lowest ranked overall performers in both 2008 and 2010, is one of the top reforming states in 2014.

The report also found that most of the reforms documented focused on streamlining the complexity and cost of regulatory processes.

One-stop centre helped improve the time to issue a building permit in Rivers, Delta, and Oyo, in some cases dropping by 50 percent or more since 2010.

Further findings showed that the case management provisions introduced by Ekiti’s new civil procedure rules in 2011 helped reduce average trial time by nine months.

Data also showed that states continued to digitise land records and introduce geographical information systems making property registration more secure and efficient.

The report identified that challenges persisted in most of the categories, with no single state ranking at the top on all indicators.

For instance Abuja, FCT and Lagos are among the top performing states on the ease of starting a business, but rank in the bottom two positions on the ease of dealing with construction permits.

Similarly, Sokoto and Osun rank two and three in dealing with construction permits, but 30 and 33 in starting a business, respectively.

Additionally, Nigerian entrepreneurs face different regulatory hurdles, depending on where they establish their businesses. Varied state regulations and practices along with uneven implementation of federal legislation drive these differences and impact local entrepreneurs differently.

Lead Private Sector Development Specialist with the World Bank Group, Mierta Capaul, said the report showed the importance of close coordination between federal and state governments in implementing more streamlined and efficient regulatory frameworks for all Nigerians.

“States in Nigeria stand to gain a lot from adopting good practices that are already implemented and are working elsewhere in the country,” Mr. Capaul said.

Doing Business in Nigeria 2014 is the third in a series of World Bank Group sub-national reports studying the ease of doing business in the country.

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