It is harder to do business in Nigeria now than it was in 2015, the World Bank Group’s
‘Doing Business Report’ has revealed.
According to the report, Nigeria went up the ease of doing business ranking, yet doing
business actually just got harder in the largest economy in Africa.
In 2015, Nigeria ranked 170 of 189 countries, with a distance to frontier (DTF) or ease
of doing business score of 47.33, against Singapore’s 88.27 and Eritrea’s 33.16.
In the 2016 version of the report, Nigeria climbed one rung of the ladder to the 169
position, but its ease of doing business score fell to 44.69.
Singapore remained the easiest country to do business in, with a DTF of 87.34, while
Eritrea remained at the bottom of the ladder, plunging further to 27.61 from 33.16 in
2015.
At 32 and 62 respectively, Mauritius and Rwanda remained the best destinations for
business in Africa, while Ghana led the West African park at 114 of 189 countries.
Commenting on issues regarding businesses in Nigeria, the World Bank said informal
construction and bad building affect the public and businesses in Nigeria.
“Where informal construction is rampant, the public can suffer. Take the case of Nigeria,
which lacks an approved building code setting the standards for construction,” the
report read.
“Without clear rules, enforcing even basic standards is a daunting task, and many
buildings fail to comply with proper safety standards. Structural incidents have
multiplied.
“According to the Nigerian Institute of Building, 84 buildings collapsed in the past 20
years, killing more than 400 people.”
Power generation was also identified by the global financial institution as one of the
reasons why unemployment is high in Nigeria and why multinationals leave Nigeria.
“Industry is a core sector for the generation of national wealth and employment in
Nigeria, but faced with an electricity sector hampered by poorly utilized generation
capacity, high transmission losses and frequent outages, companies turn to self-
provision of electricity.
“This raises their production costs, reducing their competitiveness and thus their
demand for labor. The erratic and inadequate power supply in Nigeria has often been
cited as the main reason forcing multinationals to relocate production lines to other
countries. Power outages also affect output levels.”
On reforms carried out so far, World Bank said: “Nigeria made transferring property in
Lagos less costly by reducing fees for property transactions.
“Nigeria strengthened minority investor protections by requiring that related-party
transactions be subject to external review and to approval by disinterested
shareholders. This reform applies to both Kano and Lagos.”
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