World Bank: It’s harder to do business in Nigeria

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.”