W’Bank Report Shows Improved Business Climate in States

• Says property registration still difficult, expensive in Nigeria

Obinna Chima

States in Nigeria are making strides to improve the ease of doing business for domestic small and medium enterprises, the latest edition of the World Bank’s ‘Doing Business in Nigeria,’ report released thursday has shown.

The report, the fourth in the sub-national series on Nigeria, covered 36 states and the federal capital city of Abuja.

It analysed business regulations in four areas namely, Starting a Business, Dealing with Construction Permits, Registering Property, and Enforcing Contracts.

It said, “In the past four years since the last report was issued, 29 Nigerian states have implemented 43 reforms. The majority of those reforms are in the area of Starting a Business – 28 states enacted changes to improve business incorporation.

“While no state performs well across all areas benchmarked, Kaduna, Enugu, Abia, Lagos and Anambra made the biggest strides in improving their business regulations.

“Several states lagging in 2010 are now narrowing the gap in regulatory efficiency with the better-performing states.

“Across all indicators, the gap in time difference between lagging states and better-performing ones has been cut by at least one-third.”

It, however, pointed out that location still matters for local entrepreneurs wanting to start and operate a business in Nigeria, as large differences exist in the regulatory environment throughout the country.

For example, incorporating a new business can take more than six weeks in Adamawa and just 10 days in Abuja, it stated.

According to the report, “On average, it now takes 26 days to incorporate a new business, compared to 34 days in 2010. Abuja remains the easiest place to start a business.

“The improvements have been the result of introduction of an electronic platform by the federal Corporate Affairs Commission. The online platform enhances speed and transparency of the business registration process.

“As a result, it takes less time to start a business in states, which have adopted the online platform. Reform efforts to improve construction permitting slowed – only three states implemented reforms in the past four years.
“Nevertheless, Niger, Kano and Jigawa surpass even some of the advanced economies in the world in terms of streamlined and expeditious processes for obtaining a building permit.”

But the report stressed that Nigeria remains one of the most difficult and expensive places to register property in the world.

According to the World Bank, on average, it takes 12 procedures, 74 days and costs 15.3 percent of the value of the property to transfer land.

It said, “Kaduna implemented some landmark reforms catapulting the state to the top spot in Nigeria for ease of registering property.

In the area of Enforcing Contracts, Kaduna, Bauchi and Jigawa are the best performing states.

“However, the quality of judicial processes and the efficiency of resolving a commercial dispute vary widely, with the greatest differences seen in the time to complete the trial and judgment phase.”

Commenting on the report, the Country Director, World Bank, Nigeria, Rachid Benmessaoud said, “It is encouraging to note that the private sector acknowledges the business environment reform agenda initiated at the federal level is trickling down to several states.

“While these findings are encouraging, substantial variation remains across the country. Going forward it will be critical for the states to engage in peer learning and put in place the institutional mechanisms that will ensure continuous improvement and the sustainability of reforms.”

Also, the Senior Manager of the Global Indicators Group at the World Bank, Rita Ramalho said, “The acceleration in the pace of business reforms to reduce the time, cost and complexity of bureaucratic processes is a welcome step in the right direction.

“However, federal-level initiatives will need to be matched by state and local efforts to spread the benefits more uniformly across the country and help bring much-needed prosperity. We hope this report will serve as a roadmap for reform at the sub national level.”