Business Day
Across the world, investors are faced with the task of making business decisions that would lead to business growth as well as contribute to the economy of any nation where their investments are domiciled.
Nigeria has the Vision 20:2020 aimed at becoming one of the top 20 economies by the year 2020 which explains why successive administrations in the country have at various times developed series of economic reforms such as economic liberalisation, deregulation, privatisation of state enterprises, improving the investment climate, pursuing public sector reforms, and public-private sector partnerships with the aim of actualising this tall dream amid impressive growth figures driven by higher crude oil prices.
The United Nations Conference on Trade and Development (UNCTAD) reveals that about $1.4 trillion investment capital circulates globally, a figure which also indicates that capital in the global economy is volatile, with lots of indicators considered by investors before deciding on the country to invest in.
World Bank/International Finance Corporation (IFC) report on ‘Ease of Doing Business’ ranks Nigeria 133rd among 183 nations, leading to concerns by economic and financial experts in the country over the effect such a rating could have on Foreign Direct Investment (FDI) inflows and other investment opportunities expected in the country.
While Chad was ranked the worst country for doing business and Morocco ranked among one of the few African nations with improved business processes, the report stated that, “A high ranking on the ease of doing business index means the regulatory environment is more conducive to the starting and operation of a local firm.
“This index averages the country’s percentage rankings on 10 topics, made up of a variety of indicators, giving equal weight to each topic. The rankings for all economies are benchmarked to June 2011.” The report maintained that Morocco improved its business regulation the most, compared to other global economies, climbing 21 places to 94, by simplifying the construction permitting process, easing the administrative burden of tax compliance, and providing greater protections to minority shareholders.
In view of this latest ranking, economic and financial experts have tasked the Federal Government to address the state of infrastructure and focus on moves to improve the investment climate in the country.
In an interview with BusinessDay, Thomas Awagu, President, Nigerian-British Chamber of Commerce (NBCC) revealed that while the nation was confronted with enormous challenges, it was necessary that these challenges be harnessed to grow investments and help create jobs.
Lamenting the high cost of doing business in Nigeria, Awagu, who is also the President/Chairman of Council, Institute of Directors (IoD) pointed out that the situation had brought to the fore the need to reposition the nation, making it competitive in the global economic landscape.
Awagu said, “There are enormous challenges confronting us today as a nation. These challenges include insecurity, corruption, poor infrastructure and unemployment, amongst others. Nonetheless, I believe that a lot of hope exists for the nation to realise its potentials and be transformed to its desired status, given the nation’s inherent potentials and resources.
“It is my conviction that the aforementioned challenges present a need for us as citizens of Nigeria to explore ways of making our country more competitive on the global scene and attract necessary investments and create jobs.”
Awagu however emphasised the need for the creation of an enabling environment and significant investment in economic infrastructure, saying these would help in addressing the current challenges confronting the country, help promote competitiveness and fast-track sustainable economic growth and development.
He further predicted a growth in the nation’s economy and ranking on the ease of doing business if on-going transformation programme and infrastructure building projects are pursued vigorously and maintained. Key among the projects that would drive the growth of the Nigerian economy, Awagu said includes the Independent Power Projects (IPP) and on-going roads construction, etc.
Lending his view, Muda Yusuf, Director-General, Lagos Chamber of Commerce and Industry (LCCI) noted that there has been not much progress on the part of government towards creating enabling environment for businesses to thrive as the most critical element is power.
While diesel is sold for between N160 and N180 a litre, Yusuf stated that for industries in the country, it’s been difficult to survive and sustain their industrial operation.
The Director General hinted that small businesses are faced with the challenge of accessing credit facilities from financial institution despite a number of small and micro businesses which have very good ideas as to how they can expand their operations and create more jobs.
According to Yusuf “Some of them cannot access credit from the commercial banks. Many have to resort to finance companies or microfinance banks where they are charged as high as 10 percent per month.
In a year, you realise that you are talking of about rates as high as over 100 percent. That is incredible and outrageous. With all these constraints in place, it becomes difficult to create jobs and we cannot say that we are making progress.”
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