Sub-National Doing Business 2010 “Challenges & Opportunities”

Doing Business compares business regulation in 183 economies

Launched 8 years ago

Focuses on regulations relevant to the life cycle of a small to medium-sized domestic business based on a standardized case

Does not measure all aspects of the business environment

The objective: efficient regulations, accessible to all, and simple to implement

Doing Business Nigeria 2010 covers all 36 states and the capital

Depends, in particular, on whether the cross-border region is relatively central or peripheral and whether borders are ‘natural’ or ‘political’:

i.Barriers to traditional or ‘natural’ market opportunities;

ii.Remoteness from main centres of population;

iii.Transport and communication barriers;

iv.Cultural and language barriers;

v.Bureaucratic or administrative barriers, including different fiscal and legal jurisdictions,

vi.non-recognition of qualifications, etc.;

vii.Stimulation of the black economy by price/tax differentials and by difficulties in trading/migrating legally across national borders i.e. smuggling & human trafficking!

Doing Business in Nigeria 2008: measured 10 states and Abuja, FCT.

Doing Business in Nigeria 2010: updates 2008 data and measures federal and state regulations across the country in 4 areas of the life of a business:

Starting a business

Dealing with construction permits

Registering property

Enforcing contracts

Nigerian states are reforming and can learn from each other

Key findings:

8 of the 11 states measured in 2008 and again in 2010 have

improved in at least one area

Wide variation in business regulations across the country shows

that there is room for reform

Some states already perform up to international standards in some

areas

States can learn from the existing good practices of their peers and

become more competitive nationally and globally

Where is it easier to do business in Nigeria and where not?

Nigeria has a 770Km border with the Republic of Benin; the most well known border town areas are:Benin Republic - Saki, Oyo StateSeme, Pogi, Benin Republic - Owode/Idi-Iroko in Lagos & Ogun States•Any other border towns?•Any other land border programme between the two countries?

Maradi Micro-Region (or Maradi – Katsina - Kano Corridor)

Distinctive characteristics of the Maradi-Katsina-Kano micro-region:

Promotion of regional trade beyond the borders of Niger and Nigeria

thanks to a cross-border junction structured around the Hausa

network.

Surface area of the Maradi–Katsina–Kano zone is 83,000 sq km, with a

population of about 19 million.

With over 200 inhabitants per sq km, this is one of 23 the most

Over the past 2 years, reforms made doing business easier in Nigeria

Starting a business: large variations in time and cost across the states

• Defining PPP

• Or do we mean Public Private Dialogue (PPD)?

• Defining PPD

• The differences between PPP and PPD

Starting a business in Abuja takes half the time compared to Bayelsa

Bottlenecks!

Kano ranks 67th globally in the cost of obtaining a construction permit

New civil procedure rules result in faster contract enforcement

The Challenges – Typically a poor Investment Climate

limits the rate at which new businesses start;

limits the rate of growth of businesses, and ;

limits the ultimate size of a business.

A Better Investment Climate. Why?

If the rules governing businesses in the formal sector are too onerous, unpredictable, opaque or costly, economic activity and thus employment is constrained, and/or forced into the informal sector.

In the informal sector, the need to evade tax inspectors, health and safety officials and many other agents of local government, similarly constrains firm size, growth and employment potential.

Furthermore the quality of jobs in the informal sector is usually worse, with lower pay, lower job security, and poor working conditions.

A good investment climate stimulates investment and job creation

A good investment climate provides opportunities for business to invest productively, expand and create jobs for all sectors of society. Increased competition lies at the heart of a strong investment climate: i.the rule of law, ii.ease of business entry, iii.open access to finance, iv.infrastructure and business services, all help prevent established businesses with political connections from stopping new, smaller and innovative businesses from thriving. This in turn enables economies to adapt quickly to changing markets, and to new employment opportunities.

Opportunities of a good Investment Climate

An investment climate that is conducive to business also improves outcomes for society as a whole, as higher levels of formalization generate higher tax receipts, and a greater proportion of businesses abiding by enforceable health, social and environmental regulations

So where should you invest? Which state? Why?

There are two reasons for investors to go to a location (i.e. country or state):a)To search for markets/market opportunities;b)To search for production opportunities.

Investment Climate is one of a number of factors in the decision making process, and could easily be a key determinant ;a)Proximity to key market/markets;b)Proximity to source of inputs or raw materials;c)Availability of a pool of skills – labour;d)Return on Investment;e)Investment Climate conducive to doing business

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