Economy, Featured
While the latest ranking of Doing Business Index of the World Bank is indeed welcome to boost the confidence of the government, it is, however, important that the federal government should work towards providing the critical infrastructure needed for businesses to thrive, while ensuring that there is security of lives and property of Nigerians and foreigners in the country
By Goddy Ikeh
FOR once, Nigerians have cause to celebrate the latest good news from the World Bank, which ranked Nigeria 131 out of 190 countries in its 2020 Doing Business Index, DBI. The ranking saw Nigeria move up 15 places from 146th position in 2018.
The report, which was released on Thursday, October 24, also named Nigeria one of the top 10 most improved economies in the world for the second time in three years. According to the report, Nigeria is one of only two African countries to make this list. With this year’s leap, Nigeria has improved an aggregate of 39 places in the World Bank Doing Business index since 2016.
The Doing Business Index is an annual ranking that objectively assesses prevailing business climate conditions across 190 countries based on 10 ease of doing business indicators.
Reacting to the news of this feat, President Muhammadu Buhari noted that “the movement of 15 places to 131 as well as the recognition being given to Nigeria as one of the top 10 most improved countries, that have implemented the most reforms this year, is significant because we were not even able to achieve some of the key reforms we had pursued, but what we have done so far is being recognized. This validation confirms that our strategy is working and we will continue to push even harder to deliver more impactful reforms.”
Buhari believes that with the ratification of the Companies and Allied Matters Bill and the introduction of the Business Facilitation (Omnibus) Bill, 2019 in view, along with other pending and ongoing regulatory, judicial and sub-national reforms, Nigeria may be heading to the top 70 countries in doing business destinations by 2023.
For Niyi Adebayo, Minister of Industry, Trade and Investment and Vice Chairman of the Presidential Enabling Business Environment Council, PEBEC, “The steady improvement in Nigeria’s ease of doing business score and rank is a testament to the reforms implemented by this Administration over the past four years in line with the reform agenda being implemented at national and sub-national levels across the country since the establishment of the Presidential Enabling Business Environment Council, PEBEC, by President Muhammadu Buhari in July 2016.
“The PEBEC works towards the fulfillment of the projections of the Economic Recovery and Growth Plan, ERGP 2017-2020, which is striving to deliver sustainable economic growth in Nigeria by restoring growth, investing in our people, and building a competitive economy as we work towards delivering Mr President’s mandate of bringing 100 million people out of poverty. The 2020 Doing Business report from the World Bank has reaffirmed the commitment of the newly constituted PEBEC to making Nigeria a progressively easier place to do business and removing the bureaucratic constraints to doing business in the country as we forge ahead in this Next Level.”
As the Nigerian leader and officials celebrate the country’s new improved ranking of the World Bank Doing Business Index, local manufacturers and other stakeholders are still groaning and operating their plants with diesel powered generators, multiple taxation, high interest rates among other disincentives to businesses.
And for the average Nigerian, the news of the Word Bank ranking will be meaningful to them when there is improvement in his or her wellbeing, which has been eroded by deteriorating infrastructure like power, roads, high food prices, high unemployment among others.
It is obvious that the federal government is aggressively seeking to improve the contributions of foreign direct investments to its economy by attracting more investments into the country. For instance, the recent trip to Russia for the Russia – Africa Investment Forum in that country by Buhari and Nigerian officials could be described as the best and most profitable of such foreign campaigns over the last four years.
According to Garba Shehu, Senior Special Adviser to the president on media and publicity, “The definite high point was the decision by the Russians to agree to a government-to-government understanding that would see them return to complete the Ajaokuta Steel Rolling Mill and commission it. Nigeria had expended well over USD 5 billion without it coming to fruition.”
Shehu added that Presidents Buhari and Vladimir Putin opened a “new chapter” in the historically important relationship between the two countries as they both agreed to expand cooperation in energy sector, petroleum and gas, trade and investment, defence and security, mining and steel development, aluminium and phosphate, education and agriculture and a plethora of other issues.“
And for President Putin, the traditional friendly relationship between Nigeria and his country has gained a new momentum, symbolized by a 93 percent growth in trade between the two nations in 2018, promising that “Russian companies are ready to offer their scientific and technological developments to their African partners, and share their experience of upgrading energy, transport and communications infrastructure.”
Shehu also noted that Russia is clearly seeking to reconstruct the important role the country played in its Soviet era, when they had traditionally supported African countries in their fights for independence and sought to build industrial infrastructure and develop national economies.
Some of the highlights of the Russian trip included Russia’s leading rail line service providers, MEDPROM’s interest in undertaking the 1,400km Lagos-Calabar rail track that will pass through all the states in the South-South sub-region, the agreement and MoU signed between the NNPC and the Russia’s Lukoil to upgrade their commercial relationship to a government-to-government backed partnership, to work together in upstream operations and in revamping Nigeria’s ill-functioning refineries.
Others were the pledges by Russia to support Nigeria in the fight against Boko Haram terrorists, cooperation in strategic fields of defence, civil nuclear energy and dealing with piracy and oil pipeline vandalism in the Gulf of Guinea. Nigeria also got a deal for the technological upgrade and timely delivery of the balance of seven, out of an existing order for 12 Attack Helicopters from Russia.
Encouraged by the successes recorded in the Russian trip, Buhari has on Monday, October 28, headed to Riyadh, Saudi Arabia to attend the 3rd edition of the Future Investment Initiative, FII.
According to Shehu, the event with the theme “What’s Next for Global Business’’ would hold from October 29 to 31 and has sustainable future, technology for good and advanced Society as its central focus.
While the Nigerian leader continues his economic diplomacy, it is important that the government addresses the dearth of critical infrastructure that will scare away any willing foreign investor. In addition, the issue of insecurity, multiple taxation, high national debt burden, human rights records and the rule of law should be quickly addressed in order to ensure that the anticipated gains from these economic diplomacy are realised.
Already, Zainab Ahmed, Minister of Finance and National Planning, has embarked on such campaign to clear the doubts of Nigerians and foreigners on tackling the ailing power sector in the country. She explained recently that the federal government secured a $3 billion loan from the World Bank for reforming the nation’s power sector.
According to her, the loan would be disbursed in four tranches of $750m, each beginning from April 2020 and that it would cover the funding gap as well as the current tariff, which investors in the sector had described as very low compared to what is obtainable in other countries.
And on the controversial heavy debt burden of the country, the minister said that Nigeria was not in any debt crisis as being speculated in many quarters.
Ahmed assured during a public hearing on the budget organised by the National Assembly that the country’s debt profile was still within a reasonable limit.
“Nigeria does not have a debt crisis. Our total borrowing today is just under 20 percent of our GDP, while the multilateral institutions project for an economy our size to borrow up to 50-55 percent of our GDP. What we have is a revenue problem,” the minister said.
While the president is engaging in his economic diplomacy abroad, it is important that Nigerian officials should embark on similar campaigns at home to enable Nigerians appreciate the efforts of government and buy into their economic development agenda.
– Oct. 28, 2019 @ 13:55 GMT |
Tags: Beyond World Bank Ease of Doing Business Ranking
