Doing Business in Nigeria 2014 › content › dam › doing...5 Doing Business in Nigeria 2014 Subnational Doing Business studies capture local differences and large variations across

Doing Business in Nigeria 2014Comparing Business Regulations for Domestic Firms in 35 States and Abuja, FCT

Mierta Capaul & Madalina Papahagi

Subnational Doing BusinessDevelopment Economics

September 29, 2014

Doing Business in Nigeria 20141

What does Doing Business measure?

Doing Business indicators:

Focus on regulations relevant to the life cycle of a small to medium-sized domestic business.

Are built on standardized case scenarios.

Are measured for the most populous city in each country.

Are focused on the formal sector.

DO NOT measure all aspects of the business environment such as macroeconomic stability, corruption, level of labor skills, proximity to markets, or of regulation specific to foreign investment or financial markets.


Doing Business measures areas of regulation that are important throughout the life cycle of small and medium size firms


Pace of reforms remains strong in 2012/13: share of economies with at least one reform making it easier to do business

OECD high Income

Europe and Central Asia

Middle East and North Africa

South Asia

East Asia and Pacific

Sub-Saharan Africa

Latin America &

the Caribbean

Worldwide, 114 economies implemented 238 reforms in 2012/2013, 18% rise with respect to 2011/2012.While in 2005/2006 only 33 % of the economies in Sub-Saharan Africa implemented business regulation reforms, in 2012/2013 66% of the economies did so.

66%

40%

75%

60%

58%

53%

73%


What do Subnational reports add?

• Expand Doing Business indicators beyond the largest business city measured by the annual report

• Capture local differences in regulations or enforcement

• Provide information on good practices within the same country that can be easily replicated

• Provide a tool for locations to tell their story and to compete globally

• Combine Doing Business media appeal with active participation of subnational governments in the reform process


Subnational Doing Business studies capture local differences and large variations across locations

Source: Doing Business databaseNote: Subnational Doing Business studies measured 23 cities in Colombia (2013), 13 in Italy (2013), 13 in Kenya (2012), 20 in Indonesia (2013), 30 in Russia (2012), 32 in Mexico (2012), 25 in Philippines (2011), 22 in in South East Europe (Albania, Bosnia and Herzegovina, Croatia, Kosovo, FYR Macedonia, Montenegro, and Serbia- 2011) and 37 in Nigeria (2010)

Cost (% of income per capita)

The cost of dealing with construction permits varies widely across cities within the same country or region

18

32

40

45

68

94

95

110

333

131

417

966

312

1035

1509

2132

0 500 1000 1500 2000 2500

Mexico12

Indonesia12

Russia12

Italy13

Colombia13

Philippines11

Nigeria10

SEE11


Subnational Doing Business studies show potential of reforms across locations within the same country

16

Dealing with construction permits in Russia: what if the best regional practices were adopted in Moscow?

103th

78th

46th

181st173th

113th

Global DB Data for Russia*

51 423 days

150 days

Best practice in Russia

*Data published in Doing Business 2012, as measured for Moscow as of June 2012** % of income per capita

183%

40%

ProceduresTime

Cost **

Improvement in Global DB

Rank (1-183)

0

5

10

15

20

25

30

35

Starting a businessDealing with

construction permits Registering propertyEnforcing contracts

28

0

11

0

31

5

16

8

23

1411

31

2009 2012 2014


Subnational Doing Business studies motivate local governments to reform: the experience of Mexico

Number of Doing Business reforms*

*Subnational locations (does not include the Federal District)


13 countries in Europeand Central Asia

3 countries in Middle East & N.

Africa2 countries in

South Asia

4 in East Asia and Pacific

6 countries in Sub-Saharan Africa

Economies from all income levels BRICs 9 high-income economies 18 upper-middle income economies 18 lower-middle income economies 15 low-income economies

16 countriesIn Latin America &

Caribbean

355 cities and 55 economiesMore than one round of study in 26 economies4 fragile state economiesRegional studies: OHADA (16) + OECS (6) + SEE (8)

Economies with one subnational DB studyEconomies with more than one subnational DB study

Demand for Subnational Doing Business in all regions and all income levels


Since 2008 Doing Business in Nigeria has been promotingimprovement of regulations

10 states + Abuja, FCT• Baseline for 4 indicators

36 states + Abuja, FCT• Updated 4 indicators• Measured progress over 2

years in 11 locations

2010200835 states + Abuja, FCT• Updated 4 indicators• Measured progress over 4

years in 36 locations• Compares gender

employment and other data among public agencies

2014

1) Starting a business, 2) Dealing with construction permits 3) Registering property 4) Enforcing contracts


A state’s regulatory environment may be more business friendly in some areas than in others


States that strive the most to maintain an active dialogue with their peers have a better business regulatory environment


Good business regulations and governance

In countries where business regulation is efficient and information on documentation requirements and fee schedules is easily accessible, the costs to start a business are much lower.


Key findings

1. Twenty-two states have improved in at least 1 of the 4 areas measured.

2. While most reform efforts focused on reducing the complexity and cost of regulatory processes, several states also undertook judicial reforms to strengthen legal institutions.

3. Cross River, Ekiti, Niger, Ogun and Rivers improved the most across the areas measured, making the biggest strides towards the national frontier of good practices.

4. Different state regulations along with uneven implementation of federal legislation drive large variations across indicators. No single state ranks at the top on all indicators.

5. Federal leadership will be crucial to roll out reforms in federal agencies (such as CAC) and to ensure the effective implementation of legal changes.


Ogun, Niger, Cross River, Ekiti, and Rivers narrowed the gap with the regulatory frontier of good practices the most since 2010


Six states significantly reduced the time to start a business


Ogun radically transformed the construction permitting process


Property registration fees are generally high, but vary greatly across Nigeria


Clearing court backlogs resulted in faster contract enforcements in Niger, Ekiti and Kaduna


The gender perspective: assessing practices at public registries across the country

108 Corporate Affairs Commission branches, land registries and state building

authorities were surveyed across 35 states and Abuja:

No legal or regulatory restrictions were found for Nigerian women to

start or operate a business

In more than 2/3 of the agencies surveyed, it is common for a female

entrepreneur to send a male representative on her behalf

Women are underrepresented among the employees of the public

agencies surveyed: only in 1/3 of the agencies, women make up

more than 35% of the workforce.


Adopting local good practices already existing in Nigeria would improve the business environment across the country


Thank you! For more information:www.doingbusiness.org/Nigeria

Documents

Doing Business in Nigeria 2014 › content › dam › doing...5 Doing Business in Nigeria 2014 Subnational Doing Business studies capture local differences and large variations across