Africa’s largest economy, Nigeria, made further improvement in the World Bank ease of doing business global ranking which has seen the country move up five places in the last one year.
The World Bank analysis showed it is getting better to do business in emerging markets, as Nigeria jumped to 170 out of a total of 189 counties measured in the ease of doing business survey.
The report finds that Nigeria now ranks among the top five economies in Sub-Saharan Africa in two areas: the ease of getting credit and the strength of minority investor protection. Also some improvement was recorded in the process of starting up a business.
“The latest World Bank doing business global ranking which indicated Nigeria’s appreciable progress with regard to the ease and speed of doing business is encouraging and laudable. The report showed that Nigeria recorded remarkable improvement in 34 vital thematic requirements,” said Kayode Omosebi, an analyst with UBA Capital in a response to questions.
“However, Nigeria needs to do more to make its economy attractive to foreign investors and catch up with other developing countries, despite the improvement recorded.”
In ease of obtaining credit, Nigeria jumped 73 places up to No.52, while in ease of starting a business it improved nine places to No. 125.
The World Bank report went further to say that Nigeria has implemented 10 regulatory reforms, starting from 2005, making it easier to do business.
“We remain hopeful that this result can be a springboard for improved co-ordination between the national and sub national governments across party lines,” said Chika Mordi Chief executive Officer at the National Competitiveness Council of Nigeria (NCCN).
“Particularly in an election year, where electorate contestation exerts increased scrutiny on policy sets,” Mordi said.
Nigeria improved its credit information system through a Central Bank guideline defining the licensing, operational and regulatory requirements for a privately owned credit bureau.
The country improved access to credit information by distributing credit information from retail companies.
Also, a majority of reforms have focused on improving business incorporation, trade, and credit reporting systems—allowing the country to gradually narrow the gap with the best regulatory practices in the region.
Between 2013 and 2014, Nigeria saw an increase of 3.6 points in its distance to frontier score, greater than the global average increase of 0.8.
This is due in large part to an increase in the coverage rate of Nigeria’s credit reporting system and a reduction in the company registration fee that made it less costly to start a business.
Nigeria’s upward movement (+5) compared favourably to the BRICS (Brazil, Russia, India and China) (+0), other MINT (Mexico, Indonesia, Nigeria, Turkey) (+2) nations and Sub Saharan Africa (+2).
However, the country recorded a decline in rankings in the dealing with construction permit, getting electricity, paying taxes and resolving insolvency.
Abiola Rasaq, analyst at Associated Discount House Limited said, “It’s appealing to see improvement in the ease of doing business in Nigeria; moving five notches to rank 170th of 189 ranked countries in the world. Whilst it is still a long haul to where a country like Nigeria should be, given the potentials and business opportunities in the country, I think it is important to look at the components of the rank to ensure further improvement going forward.”
He said: “In my view, the CBN, operators, as well as other collaborators in the financial services sector, have enhanced access to credit, especially at the low-end of the market, with expectation of further improvement, when the high interest rate tapers out. Most state governments and the CAC have also relaxed rigid rules on starting or registering businesses, thus improving our score on this component of the ranking criteria.”