Can Nigeria Finally Turn the Corner?
Africa’s largest economy ranks among the hardest places to do business.
Today, Muhammadu Buhari became the country’s new president. The former General has dutifully pledged to crack down on corruption and inefficiencies as a top priority.
His ability and determination to follow through on this pledge will matter greatly to the people of Africa’s most populous nation.
A real improvement on this crucial frontline cannot come a moment too soon. Among the world’s major emerging market economies, Nigeria currently ranks as the hardest place to do business, according to the World Bank . It stood at 170th out of all 189 states ranked.
Other major emerging markets countries face similar challenges, but they are less steep than Nigeria’s.
Narendra Modi, the country’s new prime minister (in office since May 2014), has committed his government to raise India’s rank in the World Bank’s Ease of Doing Business rank from 142nd to 50th place within five years.
2. Next, Indonesia: It ranks 114th out of 189 countries in terms of ease of doing business in 2015. Since October 2014, the world’s third-largest democracy has been led by President Joko Widodo, a self-proclaimed reformer.
He is keen to work on key steps to improve the business environment. These measures include making it easier to start a business, connect a new business to electricity and pay taxes.
3. What about Nigeria? Its business environment reflects the challenges facing many Sub-Saharan economies. Getting electricity to a business is extraordinarily difficult. Construction approval is slow. Cross-border trade is hard. Contract law is poorly enforced. Registering property is tedious — and the tax system is overly confusing.
Nigeria’s biggest rival on the continent, South Africa, ranks a far more impressive 43rd place in the world for ease of doing business.
However, while its performance has been declining lately, Nigeria managed to improve its rank by five spots from 2014 to 2015. This was achieved despite several serious government corruption scandals and the ongoing counterinsurgency against Boko Haram.
It’s an encouraging start. But any way you look at it, Nigeria faces a long climb up.