Latest posts
Home / Nigeria News / World Bank‘s Report on Business in Nigeria

World Bank‘s Report on Business in Nigeria

The recent World Bank on the ease or difficulty of doing business in Nigeria has attracted divergent views from stakeholders in the country, Udeme Ekwere, reports.

Stakeholders in the Nigerian manufacturing industry have given varying reactions to the recent World Bank‘s report on the ease or otherwise of doing business in the country.

The stakeholders, in separate interviews with our correspondent, agreed that it has, indeed, been difficult for companies, especially those in the manufacturing sector, to operate successfully in the country.

During the inauguration of its 2010 report on small and medium scale businesses in Nigeria, last Thursday, the World Bank Group, had said that Ogun, Imo and Anambra states were the most difficult terrains for business operations in Nigeria.

The report named, Jigawa, Gombe, Borno, Kebbi and Kogi states as the least difficult states as regards doing business in Nigeria

Presenting the report, the Vice-President and Head of Network, Financial and Private Sector Development, World Bank Group, Mr. Janamitra Devan, noted that the states were ranked, based on four major indicators.

The factors, according to the World Bank, include the ease of starting a business; dealing with construction permits; registering companies and enforcing contracts.

He said the report studied business regulations from the perspective of a small to medium-sized domestic firm, adding that in each of the indicators, the study identified existing good practices across the country.

Davan said while it was easier to do business in most states in the North, such could not be said of states located in the Eastern and Western regions.

Reacting to this, however, the President, Manufacturers Association of Nigeria, Alhaji Bashir Borodo, said regardless of location, it has always been difficult to operate businesses in Nigeria.

According to him, the basic challenges that an average businessman or manufacturer faces in the South is similar to that which operators encounter in the North.

”There is nowhere in Nigeria, where it is easy to do business. This is because there are so many roadblocks that hinder ease of doing business in the country. These roadblocks are not peculiar to a particular location in the country.

“It is, therefore, difficult to say that businesses can thrive in one particular location than in others. I do not know how the World Bank came about its analysis, but I can tell you that the operating environment for businesses in the country is extremely harsh.”

Borodo noted that Nigerian manufacturers grapple with a lot of challenges, which make doing business in the country a difficult task, adding that “no state is more favoured than others.

”Manufacturers, whether in the North, South, East or West, in Nigeria suffer similar problems. There is hardly any place to hide, where the challenges of operating businesses in the country will not catch up with you. So I do not know who is free from the difficult terrain.

The World Bank Country Director for Nigeria, Mr. Ohno Ruhl, had, however, noted during the presentation of the report, that the states that took the issues of reforms seriously were expectedly ranked better in terms of doing business.

Ruhl said that Nigeria needed reforms in four critical areas, including starting a business, dealing with construction permits, registering property and enforcing contracts.

”For instance, on land reforms, if you do not have solid titles to your property, you cannot get credit for your business. Also also, how long, how easy and how expensive it is to register a business in the country are important criteria,‘‘ he said.

The Director-General, Textile Manufacturers Association of Nigeria, Mr. Jaiye Olanrewaju, agreed that there might be some merit in the report.

According to him, the World Bank had, perhaps, taken into consideration the fact that it might be easier to acquire land and some other property in the North, compared to the South, hence the report.

He said, “Well, they may be slightly correct, in terms of land ownership for someone who wants to run a business. It might be much easier to obtain land in the North because there is less paperwork there. Also the issue of double taxation, as it affects operators in the North, may not be as rampant as it is in some parts of the South.”

According to Olanrewaju, labour is also cheaper to maintain in the northern part of the country than in the south, and that could translate into ease of doing business in the North than the South.

To Borodo, however, there is the urgent need for the government to ensure that things are put in place to improve the climate for businesses to operate functionally in the country.

Hesaid it was a shame for Nigeria to have been grappling with the issue of poor infrastructure for so many years, without any visible improvement.

He said, “There is no excuse why we should not have power supply in this country. This issue of power, which is very crucial to businesses operating successfully, has been on the front burner for over 10 years; since the coming of the democratic government in Nigeria. It is incredible that after this long, we still cannot generate 6,000 megawatts of power. It is a shame. We should have gone far beyond that stage by now.

“And then, the issue of multiple taxation, is another issue that has been bringing difficulty to the successful operation of businesses in the country. Despite the fact that the Federal Inland Revenue Service had agreed on the amount of tax that people and companies should pay, states and local governments have been imposing their own taxes on people,

“So, I think that it is important for the Federal Government to be firm in all these areas, to help manufacturers do their legitimate business with ease.”

The Executive Secretary, Nigerian Association of Small and Medium Scale Enterprise, Mr. Eke Ubiji, said that has been important for the Federal Government to intervene in the issue of access to funds, which he said, has been a major problem for small businesses operating in the country.

He noted that the high interest rates charged on loans have been a major deterrent that business operators have had to grapple with, adding that it had led to the collapse of many small businesses in the country.