Ease of Doing Business in Nigeria: A Roadmap for Attracting Foreign Investment

Nigeria, the most populous country in Africa, has long been touted as a promising investment destination, boasting a large domestic market, abundant natural resources, and a young, vibrant workforce. However, the country’s reputation for bureaucratic red tape, corruption, and an unfriendly business environment has often deterred foreign investors, hindering economic growth and development.

Recognizing the need to address this challenge, the Nigerian government, through various agencies and initiatives, has taken significant strides to improve the ease of doing business in the country. Understanding the critical role that a conducive business climate plays in attracting foreign direct investment (FDI) and fostering sustainable economic progress, policymakers must now build on these efforts and develop a comprehensive blueprint for achieving a truly business-friendly environment.

The Current State of Ease of Doing Business in Nigeria

In 2017, the Nigerian government launched the Presidential Enabling Business Environment Council (PEBEC), a high-level initiative aimed at removing bureaucratic obstacles and improving the overall business climate. Through PEBEC, the government has implemented a series of reforms, including the establishment of the Ease of Doing Business Unit, the introduction of the “Make in Nigeria” campaign, and the creation of the Nigeria Investment Promotion Commission (NIPC).

According to the World Bank’s Doing Business 2020 report, Nigeria ranked 131st out of 190 countries in terms of ease of doing business, a modest improvement from its previous ranking of 146th in 2019. The report highlighted several areas where Nigeria has made progress, such as starting a business, getting electricity, and trading across borders. However, the country still faces significant challenges in areas like registering property, enforcing contracts, and resolving insolvency.

Developing a Blueprint for Attracting Foreign Investment

To further enhance the ease of doing business in Nigeria and position the country as a premier investment destination, policymakers should consider the following strategies:

Streamlining Administrative Processes:
Simplify and digitize business registration, licensing, and permit procedures to reduce bureaucratic delays and enhance transparency.
Establish a one-stop-shop for investors to access all necessary information and services, reducing the administrative burden.
Improve the efficiency of land and property registration, ensuring secure property rights for investors.
Strengthening Legal and Regulatory Frameworks:
Review and update laws and regulations to align with international best practices, providing a clear and predictable legal environment for investors.
Establish specialized commercial courts or tribunals to expedite the resolution of business disputes, ensuring timely and impartial adjudication.
Enhance the capacity and independence of regulatory bodies to enforce laws and regulations effectively, while promoting a transparent and accountable system.
Enhancing Infrastructure and Logistics:
Invest in the development of modern transportation networks, including roads, railways, and ports, to facilitate the movement of goods and people.
Improve access to reliable and affordable energy, water, and telecommunications services, addressing critical infrastructure gaps.
Establish special economic zones and industrial parks, equipped with world-class infrastructure and streamlined regulatory processes, to attract foreign investors.

Promoting Transparency and Anti-Corruption Measures:
Implement robust anti-corruption initiatives, including strengthening the capacity and independence of anti-corruption agencies.
Enhance transparency in government procurement, licensing, and decision-making processes, reducing opportunities for bribery and rent-seeking.
Foster a culture of accountability and good governance, ensuring that public officials are held responsible for their actions.
Providing Incentives and Investor Protections:
Offer targeted tax incentives, investment allowances, and other fiscal benefits to attract foreign investors in priority sectors.
Guarantee the protection of foreign investments through bilateral investment treaties and robust dispute resolution mechanisms.
Ensure the repatriation of profits, dividends, and capital, allowing investors to confidently reinvest their earnings.

This comprehensive approach to ease of doing business will not only benefit foreign investors but also empower Nigerian entrepreneurs and small and medium-sized enterprises, fostering a thriving and inclusive business ecosystem.