ENABLING BUSINESS, STIMULATING GROWTH AS NEXT ECONOMIC STRATEGY

 In Investor News

Enabling business includes the promotion of norms and customs, laws, regulations, policies, international trade agreements and public infrastructure that facilitate the movement of a product or service along its value chain. The reverse is inhibitive.

For long, Nigeria has suffered from the inhibitive developments, wittingly and unwittingly, with its economic consequences, including the reputational risks of being known as unfriendly business environment. It is indeed, fast becoming a cliché for corporate organizations to say “harsh operating environment” in explaining their difficulties in making profit in the country.

However, the Presidential Enabling Business Environment Council (PEBEC) has been on awareness campaign, with the goal of delivering reforms to improve the doing business environment, and moving Nigeria into the top-100 on the 2020 World Bank Doing Business Index (DBI).

According to the World Bank, Nigeria registered 75,380 business in 2016 (34,531 in 2006) against 376,727 and 3,418 registered in South Africa and Senegal respectively in 2016. Also, time required to start a business in Nigeria reduced from 30 days in 2013 to 11 days in 2018 (including activities such as registering a company, to opening a bank account and other requirements), compared with an average global decline from 27 days to 20 days over the same period. The report shows that there is more need to deepen reforms and advocacy.

At the 10th Presidential Quarterly Business Forum in Abuja, the Secretary of PEBEC and Senior Special Assistant to the President on Industry, Trade and Investment, Dr. Jumoke Oduwole, said about the target: “We know it is bold, but we are quite clear on what our mandate is and are motivated by the impact these reforms will have on the lives of Nigerians”.

The DBI is a yearly ranking that objectively assesses prevailing business climate conditions across 190 countries based on 10 Ease of Doing Business (EoDB) indicators, and offers comparative insights based on private sector validation of reforms delivered in the two largest commercial cities in countries with a population higher than 100 million. The report consequently features Lagos and Kano states for Nigeria.

The 2019 report said there is an improvement in Nigeria’s Distance to Frontier (DTF) score by more than 11 basis points over the past 3 years. This means that Nigeria has improved its business regulations as captured by the doing business indicators, and is narrowing the gap with global regulatory best practice. But it is still work-in-progress.

The success so far, has been driven by the implementation of over 140 reforms by PEBEC over the period, which also resulted in the country moving up 24 places in the rankings over 3 years. With PEBEC’s new National Action Plan (NAP 4.0) focusing on deepening reforms and driving compliance, which will run ‪from the 1st of March till the 30th of April 2019, it is expected that the benefits of the reforms will be fully realised to give strategic support economic activities.

One of the earliest gains now is the possibility of reserving a company name within four hours and registering a new company with the Corporate Affairs Commission (CAC) within 24 hours from the time of submission of all documents for registration with the commission. It was not possible before now.

By this development, SMEs can get help in registering companies from any of the customer service support centres at all the CAC offices nationwide and reserve a business name on the CAC Registration Portal (CRP) within four hours if they submit the request before ‪2pm on a working day. It costs only N500 to reserve a business name. In addition, all the documents for registration only need to be submitted on the CRP in PDF format with a size no larger than 5MB. This process does not take more than 30 minutes.

The steps to register a business have been simplified further too. For example,  after applicant checks that the intended company name is available on the CAC website (‪https://services.cac.gov.ng) and then reserves it, applicant completes pre-registration form: CAC 1.1 online using the CRP and makes payment for filing and stamp duty – al l the fees are available on the CAC website.

The applicant signs the pre-registration documents and uploads for processing the CAC 1.1 form; Memorandum and Article of Association (MEMART) retrieved from the CAC website; recognised form of identification for directors/subscribers and secretary; and evidence of payment made to CAC.

After these, the applicant will receive the company certificate and Certified True Copies of the documents in return and within 24 hours the company is registered. The  Tax Identification Number (TIN) is also automatically generated and sent electronically to the email address of the first company Director, so applicants must ensure that the email is accurately provided when filling the forms.

The nation’s Vice President, Yemi Osinbajo, has reiterated that the enabling business reforms spearheaded by PEBEC are eliminating unnecessary physical visit to CAC, which could take up to 10 days to register a business; physical visit to the Federal Inland Revenue Services to get a Tax Identification Number (TIN) or register for Value Added Tax (VAT); physical inspection of business premises before issuance of Business Premises Permits; engaging an accredited agent for registering a company with the CAC; and  requirement to fill and submit several documents and forms.

On the other hand, applicants are now registering their businesses in the comfort of their offices or homes. Registration of business premises in Kano State is also now automated, and electronic certificates are sent to applicants after the registration process is completed. This process takes 1 day to complete. Also, the cost of N60,000 for engaging  an agent is eliminated and incorporation documents merged into a single CAC Form 1.1, eliminating additional N4,000 on documents.

Of course, the new narrative is encouraging registration of businesses, with the prospects of improving tax collection likely to promote economic growth and development. It also enhances transparency, as payments are made into the Treasury Single Account (TSA).

But Oduwole added: “This year, we intend to strengthen the collaboration with MDAs and partners to consolidate and build on the work done.

https://guardian.ng/business-services/enabling-business-stimulating-growth-as-next-economic-strategy

 

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