Small businesses are the lifeblood of Africa’s economy and their contributions to employment and GDP cannot be overstated. A report by Mckinsey last year noted that:
“Small companies dominate in other African economies. In Ethiopia, large companies account for less than 10 percent of B2B (Business to Business) spending; in Nigeria and Kenya, it’s less than 20 percent………..Given the predominance of smaller businesses in Africa, companies will need a clear plan for how to serve them, including tailored offerings, targeted sales forces, and distribution and supply chains appropriate to their needs. These smaller companies are well worth developing as customers. Many of these companies are growing rapidly and will make significant contributions to Africa’s growth.”
It is within this context that I want to commend the Presidential Enabling Business Environment Council (PEBEC) for the progress they have made so far in trying to improve the business environment.
On February 21, 2017, the Presidential Enabling Business Environment Council (PEBEC), chaired by His Excellency, Vice President Yemi Osinbajo (SAN) approved a 60-Day National Action Plan on Ease of Doing Business in Nigeria. The aim was to move Nigeria 20 points up on the World Bank’s Ease of Doing Business rankings. Without much ado, here are some of the outcomes of PEBEC’s efforts so far:
- Registering a company: You can now conduct online search for company names as opposed to a ‘manual search’ (I think). You no longer need lawyers to register, the incorporation forms have been consolidated into one and the company registration timeline has been shortened to 24 hours.
- Registering property: You no longer require a sworn affidavit to register property and the processes involved are currently being streamlined.
- Entry and Exit of people: The visa on-arrival and submission process has been simplified; the arrival and departure forms have been consolidation and the runway at the Nnamdi Azikiwe Airport Abuja has been fixed
- Electricity: The number of procedures for new connections to the grid has been reduced from 9 to 5; also, the timeline for new connections to the grid has been reduced from 198 to 61 days.
These are just some of the highlights of the reforms, you can view the entire list here but I must admit that I am impressed by the guys on this team. I have been following them since the commencement of the project; their deliverables were specific, not vague/ambiguous and they were time-bound (60 days). Although, some things are still outstanding, I am confident that they would pull through.
Some of you might be wondering what the big deal is. I consider it a very big deal because there are lot of regulations and government bureaucracies that stifle the growth of business which when removed and once they are removed, it has a significant impact on the ease of doing business. I once read somewhere that in Rwanda, it takes a day to register a business at no cost at all and this is done online. Because of simplifying the process, the number of firms registered in 2008 increased to more than 3000 from an average of 700 in previous years. This number more than doubled to 6905 in 2009 and almost tripled to 18, 447 in 2010. Assuming that only a third of these businesses go on to be fully operational and profitable, one can only imagine the resulting number of jobs that would be created.
The point here is that while there are lot of big problems confronting Nigerian businesses, there are lots of simple issues which when resolved have the potential to make significant impact. And honestly with an official unemployment rate of 13.9%, we need to be very aggressive in improving the business environment.