The latest World Bank report on Ease of Doing Business, which indicated Nigeria’s appreciable progress with regard to the ease and speed with which small and medium-scale enterprises
(SMEs) can be established in the country is heartwarming. It is a significant improvement on the previous report, which placed Nigeria at the bottom rung of the ten top countries in Sub-Sahara Africa. It is also incontrovertibly an indication that some of the reform measures instituted by the government are achieving the desired objectives.
A report launched in Abuja sometime ago by the World Bank, in conjunction with its development partners, showed that Nigeria recorded remarkable improvement in thirty-four vital thematic requirements. Some of these requirements, according to the report, include easy access to fund transfer, improved access to credit information, implementation of regulatory reform and tax holidays for outstanding entrepreneurs. Other requirements that have reportedly improved Nigeria’s performance on the ease of doing business scale are the burdens on various categories of businesses.
However, the report says Nigeria still needs to do more to be among the nations on the top rungs of the Ease of Doing Business scale, both in Africa and the World. Nigeria, it said, is still ranked 147 out of 189 countries globally, the same position it occupied some years ago.
Although Nigeria is widely considered the “giant of Africa”, this year’s report shows that much more remains to be done to create an enabling environment in which SMEs can blossom in the country. With the experiences of Nigerians, this assessment in the World Bank report may not be far from the truth.
Undoubtedly, one of the conditions precedent to massive job creation is the ease with small and medium scale enterprises can be established. SMEs are arguably the largest providers of employment in Nigeria. It is important, therefore, that we strive to increase the ease with each they are established. Easing the establishment and operation of businesses will improve the socio-economic development of the country.
It is no surprise that the 2017 survey put Singapore in number one position, followed by Hong Kong, Saudi Arabia and China, in a joint second position. New Zealand, United States, Denmark and Malaysia are ranked third, fourth, fifth and sixth, respectively.
Surprisingly, Rwanda is ranked topmost in Africa on the Ease of Doing Business Index, and thirty second globally, the progress by Rwanda is inspiring. It is a lesson to Nigeria and the other African countries, many of which have consistently been at the bottom of the global list. Rwanda has since 2005 implemented 26 regulatory reforms, as recorded in the World Bank report.
We urge the federal Government to address the conditions that hamper ease of doing business in the country. Although Nigeria is rated somewhat better this year, compared with last year, it is necessary for us to address the factors that have made us remain on the same one hundred and forty seventieth position that we were placed last year.
These include the high cost of operating businesses in the country, which makes it difficult for SMEs and even large companies to compete favourably with their counterparts in other emerging markets. This high cost includes financial, social and regulatory costs.
It must be said that these costs have far-reaching implications because they make the growth of SMEs to large scale enterprises difficult, especially in the absence of government intervention. They also invariably limit the lifespan of these businesses and reduce their ability to keep pace with innovation.
In the same way, government should make its policy direction clear and spur socio-economic development by fixing business infrastructure and improving the power sector that holds the key to industrial development of the country.