As the global oil prices continue to take a downward trend with its attendant consequences for FAAC allocations to Federal, State and Local Governments, many states in Nigeria have been taking steps to improve the doing business environment with the hope of attracting investments to revitalise their states' economies for a sustainable internal revenue mobilisation. The Federal Government of Nigeria also set up the Presidential Enabling Business Environment Council (PEBEC) with a mandate to remove critical bottlenecks and bureaucratic constraints to doing business in Nigeria, and to move the nation 20 places upward in the 2018 global World Bank Doing Business Ranking.
As a pointer to this, Nigeria’s Minister of State for Industry, Trade & Investment, Aisha Abubakar, recently said, “Nigeria is open for business and our main focus is on improving the business climate by creating a friendly environment for doing business.” This move by the Federal and State Governments created a wave of reforms around the Ease of Doing Business (EoDB) in 2017 with events organized by government, the private sector, and development partners (including PERL). These created awareness and capacity of governments and Ministries, Departments and Agencies (MDAs) to better and more simply support business growth.
Between February and April 2017, PEBEC completed 31 reforms in eight identified priority areas including starting a business, construction permits, getting electricity, registering property, getting credit, paying taxes, trading across borders, and entry/exit of people.
Consequently, Nigeria moved up 24 places from the 169th position in 2017 to 145th position out of 190 countries in the global ranking in the 2018 World Bank’s Ease of Doing Business report released on October 31, 2017. The report adjudged Nigeria one of the most improved ease of doing business economies in the world.
How PERL has been supporting Tax / IGR Reforms as well as Ease of Doing Business reforms in Partners States, in the South-East and South-West Regions, and at the Federal Level.The three Pillars of the DFID-funded Partnership to Engage, Reform and Learn (PERL) provided support aimed at improving the Ease of Doing Business in the country. In the first quarter of 2017, PERL embarked on massive awareness creation and capacity building for EoDB stakeholders (including government officials, private sector participants, and civil society representatives) in the Southwest and Southeast of Nigeria.
Improving Tax / IGR Systems Across PERL Places
PERL embarked on an Internally Generated Revenue (IGR) scoping assessment to identify gaps existing in IGR for the Federal Government, Jigawa, Kano and Kaduna States, to identify opportunities for potential support by development partners. PERL also developed a compendium of tax and IGR related tools developed during the SPARC and PERL programmes. The tools were shared among tax practitioners, researchers, donors and civil society organisations working on tax issues in Nigeria during the recent launch of the Nigerian Tax Research Network (NTRN) in Abuja.
PERL continues to collaborate with the Nigeria Governors’ Forum on the implementation of the IGR Dashboard which was established to monitor and advise states on their IGR performance. SPARC, the predecessor governance programme, supported the national IGR conference in November 2015 and the development of the dashboard, while PERL supported the IGR Peer Learning Event in 2017. Read more>>>
PERL mobilized government and non-government stakeholders in the South East region to prioritise Ease of Doing Business through the South East Governance Innovation Summit (SEGIS) 2017, and the South-East Regional Economic Summit held on March 7 & 8, 2017; and from November 11 to 13, 2017. PERL also conducted an assessment of bottlenecks and barriers to the doing business environment in the region. Read more>>>
PERL supported the assessment of bottlenecks and barriers to EoDB in the South West region. In collaboration with DAWN Commission, a cross-section of stakeholders were brought together to identify key barriers and bottlenecks to doing business in the region. A total of 33 bottlenecks were identified. Read more>>>
In the last quarter of 2016, with support from PERL-ARC and working with all relevant stakeholders, a Public Private Partnership (PPP) policy framework for Jigawa State was developed to guide the work of InvestJigawa towards transforming the business environment in the state. Read more>>>
A complicated taxation system, inadequate power supply, difficulty in registering property, transport infrastructure deficit, policy inconsistencies and difficulty in starting a business have all been identified as some of the key bottlenecks impacting the business environment in states and regions in Nigeria.
The decision to undertake assessments of the business environment in the states and regions is a clear indication that states are willing to take actions to improve or change existing policies and practices that are performing at sub-optimal levels or needing a ‘reset’, with the view to attracting desired investors into the states and regions.
Improvement in the ease of doing business in the states and regions is possible, as demonstrated by the Federal Government’s example, which moved the country 24 places up in the 2018 global World Bank Ease of Doing Business Ranking.
The Partnership to Engage, Reform and Learn (PERL) is a five-year governance programme, funded by the UK’s Department for International Development (DFID). The programme focuses support on governments, citizens, and evidence-based advocacy. PERL provides assistance to governments in the core areas of policy development and implementation. Visit: www.perlnigeria.net
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Disclaimer: The opinions expressed in this report are those of the authors and do not necessarily represent the views of the Department for International Development.