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Nigeria

World Bank Doing Business Index (NG0005)

Overview

At-a-Glance

Action Plan: Nigeria National Action Plan 2017-2019

Action Plan Cycle: 2017

Status: Inactive

Institutions

Lead Institution: Federal Ministry of Industry, Trade and Investment

Support Institution(s): Corporate Affairs Commission, Nigeria Investment Promotion Council, Federal Inland Revenue Service, Bank of Industry, Nigerian Export Promotion Council, National Food and Drug Administration and Control, Federal Ministry of Power, Works and Housing, Transmission Company of Nigeria, Nigerian Energy Regulatory Commission, Standard Organization of Nigeria, Nigerian Information Technology Development Agency, Nigerian Communication Commission, Central Bank of Nigeria, Nigerian Customs Service, Federal Ministry of Water Resources, Federal Ministry of Transportation. Open Alliance, Financial Institutions, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, National Association of Small and Medium Enterprises, National Association of Small Scale Industrialists, Electricity Distribution Companies, Nigerian Economic Summit Group, Manufacturers Association of Nigeria, Bankers Committee

Policy Areas

Infrastructure & Transport, Land Rights and Spatial Planning, Legislation & Regulation, Legislative, Private Sector

IRM Review

IRM Report: Nigeria Design Report 2017-2019

Starred: Pending IRM Review

Early Results: Pending IRM Review

Design i

Verifiable: No

Relevant to OGP Values: Access to Information

Potential Impact:

Implementation i

Completion: Pending IRM Review

Description

This commitment seeks to initiate and implement reforms that will make it easier for the private sector to engage with government agencies involved with business process-related services by streamlining the existing processes using innovative technology. The commitment will encourage improvements in infrastructure that is critical to the success of businesses and promote timely and efficient service delivery in all business process-related services including business registration, licensing, taxation, applying for credit, extending credit facilities etc.

IRM Midterm Status Summary

5. To improve the ease of doing business and Nigeria’s ranking on the World Bank Doing Business Index.

Language of the commitment as it appears in the action plan:

“This commitment seeks to initiate and implement reforms which will make it easier for the private sector to engage with government agencies involved with business process-related services by streamlining the existing processes using innovative technology. The commitment will encourage improvements in infrastructure that is critical to the success of businesses and promote timely and efficient service delivery in all business process-related services including business registration, licensing, taxation, applying for credit, extending credit facilities etc.”

Milestones:

5.1 Move Nigeria up by at least 20 points on the World Bank Ease of Doing Business Index

5.2: Make process of Land documentation / obtaining titles easier

5.3: Improved coordination and collaboration between agencies of government involved in business process related services

5.4: Downward review of business registration and fees

5.5: Improve critical infrastructure including power transmission and distribution by establishing more power transmission and distribution and licensing fees stations, rail lines, inland waterways, etc.

5.6: Establish a registry of credit information to be accessible by financial institutions

5.7: Enact laws that allow lenders to access borrowers’ data in the credit bureau or credit registry

5.8: Develop road map for improving sectoral value chains for MSMEs

Start Date: January 2017 End Date: June 2019

Action plan is available here:

Context and Objectives

This commitment aims to improve the ease of establishing and operating a business in Nigeria.

“Ease of doing business” indicates how favorable an economy is for business operations. In the past, investors were easily turned away by the difficult process of registering a business, filing returns, and other business administration matters in Nigeria. This is evidenced by Nigeria’s poor ranking; Nigeria ranked 169 on the World Bank’s Ease of Doing Business Index in 2017 and 170 in 2016. [61] Prior to 2017, promoters of a business name were required to engage a Corporate Affairs Commission (CAC) accredited, chartered accountant, chartered secretary or lawyer to register such company on their behalf. [62] According to the director of compliance at the CAC, [63] the cost of setting up a business in terms of getting electricity, land, or rent is very high. There are also nine steps for getting new electricity connections to the national grid, all within a timeline of 198 days. [64] Obtaining land documentation within the time limit is not an easy task, as property usually takes about 77 days to register, coupled with submitting a sworn affidavit for conducting a title search. [65]

This commitment is relevant to the OGP value of access to information. The commitment supports the Presidential Order of May 18, 2017, requiring all government agencies to publish all necessary requirements to conduct businesses via online and paper format. [66] However, Commitment 5 does not seem to be relevant to the OGP values of public accountability and civic participation, as it is unclear how the milestones will positively affect government openness or improve government accountability, participation or engagement.

The Commitment’s activities will better facilitate establishing a business in Nigeria by enhancing the infrastructure required to enhance business performance and making government involvement in business processes more efficient and transparent. Although Milestone 5.1 is clearly verifiable, most of the other commitment’s milestones lack specificity. For example, Milestone 5.2 does not explain how the land documentation would be made easier to obtain, and it was unclear who would undertake a downward review of business registration and fees (Milestone 5. 4).

The commitment should have a minor potential impact. According to Ayokunu Ojeniyi (Enabling Business Environment Secretariat), the commitment has the potential to bring about change. Improvement in the World Bank’s Ease of Doing Business ranking, coupled with adequate, transparent, credit information available to financial institutions are expected to encourage the overall climate business, which in turn may incentivize the government to be more transparent. [67] The milestones addressed factors previously identified as hampering conducting business in Nigeria (critical infrastructure, business registration, access to credit), but the lack of specificity (specifying responsible agencies) mitigates the commitment’s potential impact.

Next Steps

This is an important policy goal which could be part of the country’s agenda.

If this is considered in future action plans it should have broader implementation. The government could form work plans that clearly indicate responsible agencies and the strategies for removing red tape during implementation. The government could also consider providing citizens with a platform to give opinions and make queries, and to hold the government accountable on the various elements that affect the country’s ease of doing business ranking.

[61] The World Bank Ease of Doing Business Index measures the regulations that enhance business activity and those that constrain it. World Bank, Doing Business 2017: Equal Opportunity for All (2017), https://openknowledge.worldbank.org/bitstream/handle/10986/25592/WP-DB17-PUBLIC-Nigeria.pdf?sequence=1&isAllowed=y.
[62] Damilare Odusanya, “The Ease of Doing Business in Nigeria,” http://saharahub.com/the-ease-of-doing-business-in-nigeria/.
[63] A.G. Abubakar (Director, Compliance (CAC)), interview by IRM researcher, 8 Mar. 2019.
[64] “NERC reduces number of days for access to electricity in new buildings”, Nigerian Electricity Regulatory Commission (NERC), https://www.energymixreport.com/nerc-reduces-number-days-access-electricity-new-buildings/, 17 May 2017.
[66] Federal Republic of Nigeria, Open Government Partnership (OGP) Nigeria Mid-Term Self-Assessment 2016-2018 (3 Oct. 2017), 36, opengovpartnership.org/wp-content/uploads/2017/10/Nigeria_Mid-Term_Self-Assessment_2016-2018.pdf.
[67] Ayokunnu Ojeniyi (Enabling Business Environment Secretariat (EBES)), interview by IRM researcher, 20 Nov. 2018.

Commitments

  1. Participatory Budgeting

    NG0015, 2019, Anti-Corruption

  2. Implement Open Contracting and the Open Contracting Data Standard

    NG0016, 2019, Access to Information

  3. Transparent Tax Revenue Reporting

    NG0017, 2019, Legislation & Regulation

  4. Open Contracting and Licensing in Extractives

    NG0018, 2019, Access to Information

  5. Implement EITI Standard

    NG0019, 2019, Anti-Corruption

  6. Establish Beneficial Ownership Registry

    NG0020, 2019, Access to Information

  7. Strengthen Asset Recovery Legislation

    NG0021, 2019, Anti-Corruption

  8. Implement National Anti-Corruption Strategy

    NG0022, 2019, Anti-Corruption

  9. Improve Compliance with Freedom of Information Act with Focus on Records Management

    NG0023, 2019, Access to Information

  10. Improved Compliance with Mandatory Publication Provisions Requirement (FOIA)

    NG0024, 2019, Access to Information

  11. Implement Permanent Dialogue Mechanism

    NG0025, 2019, Dispute Resolution & Legal Assistance

  12. Aggregate Citizens' Feedback on Programs

    NG0026, 2019, E-Government

  13. Freedom of Association, Assembly, and Expression

    NG0027, 2019, Civic Space

  14. Enhance Participation of the Vulnerable

    NG0028, 2019, Capacity Building

  15. Implement New Computer Program in 6 Government Ministries to Improve Service Delivery

    NG0029, 2019, Capacity Building

  16. Legal Instrument to Strengthen SERVICOM

    NG0030, 2019, Legislation & Regulation

  17. Citizen Participation in Budget Cycle

    NG0001, 2017, Access to Information

  18. Open Contracting

    NG0002, 2017, Access to Information

  19. Extractive Sector Transparency

    NG0003, 2017, Access to Information

  20. Tax Reporting Standards

    NG0004, 2017, Fiscal Openness

  21. World Bank Doing Business Index

    NG0005, 2017, Infrastructure & Transport

  22. Beneficial Ownership Register

    NG0006, 2017, Anti-Corruption

  23. Anti-Corruption Informationi Sharing

    NG0007, 2017, Anti-Corruption

  24. Asset Recovery Legislation

    NG0008, 2017, Capacity Building

  25. Anti-Corruption Activity Coordination

    NG0009, 2017, Anti-Corruption

  26. FOIA Compliance for Annual Reporting

    NG0010, 2017, Access to Information

  27. FOIA Compliance for Disclosure

    NG0011, 2017, Access to Information

  28. Permanent Dialogue Mechanism

    NG0012, 2017, Fiscal Openness

  29. Joint Governmnet-Civil Society Legislation Review

    NG0013, 2017, Fiscal Openness

  30. Technology-Based Citizens' Feedback

    NG0014, 2017, E-Government

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