The country now ranks 131 on the World Bank’s Doing Business 2020 index, released Wednesday. The west African nation moved up 15 places from its 2019 spot and has been tagged as one of the most improved economies in the world for running a business.
The index is a yearly ranking that assesses the business environment in 190 countries using various indicators including paying taxes, trading across borders, starting a business and protecting minority investors.
Tunde Leye, a Nigeria-based business analyst with SBM Intelligence, said the new rank is a major improvement from last year but there are existing counterproductive policies that make running businesses hard.
“The ease of doing business may be better, but the actual process of running a business has been stifled,” he told CNN.
In 2016, Nigerian President Muhammadu Buhari, set up a government organization — the Presidential Enabling Business Environment Council (PEBEC) — with the aim of minimizing the constraints that come with running businesses in the country.
The organization put together reforms geared toward making it more convenient for business owners to thrive.
Some of them include cutting down the time it takes to register a business, new grid connections for electricity and upgrading election systems for imports and exports.
But according to Leye, these policies may have the opposite of the desired effect as a lot of traders and business owners are losing revenue and goods, referencing the recent closure of the Nigerian land borders.
In August, Buhari closed Nigeria’s land frontiers to goods traded with Chad, Niger, Cameroon and Benin, citing the need to protect the country’s economy from frequent smuggling.
“This closure has erased millions’ worth of trade. It is counterproductive in making business easy. We should not tamper with trade and monetary policy in that manner,” Leye said.
Business transformation
Ola Brown, founder of Flying Doctors Nigeria, a medical emergency services company, said some of the reforms have helped transform her business.
“I run an air ambulance business and visa on arrival, a simple policy change, has changed my business. We can now bring patients to Nigeria without having to get a visa in advance,” she told CNN.
In 2017, as part of a plan to improve the country’s business climate, the Nigerian Immigration Service (NIS) reviewed the requirements for Nigerian visas to make them more customer-friendly.
Brown admits that despite the change she has experienced, every business will be hit differently by the reforms. “Depending on what your business is or what you do, everyone will have a different opinion about how the current reforms are working for them,” she said.
“For me, visa on arrival has helped increase my revenue and improve my business,” she added.
In a statement Thursday, the Presidential Enabling Business Environment Council said it has more plans to deliver sustainable economic growth and improvement of businesses across the country.
“We are committed to more engagement between reform-implementing organs of government and the private sector players and we are happy to see that this has resulted in a more favorable validation of the reforms by the private sector,” council secretary Jumoke Oduwole said in the statement.
“The council is focused on delivering even more substantive reforms for the improvement of the general business climate,” Oduwole said.
There is progress with government efforts to create a stable business environment, but there should also be consideration for better education and training for entrepreneurs on how to run businesses, Brown said.
According to her, investing in teaching business owners ways to improve and grow their business will have a positive effect on the country’s business climate.
“It’s not just in the big skills. Small systematic things, like how to negotiate better with foreign partners, will help the ease of doing business,” she said.