Thursday, February 28, 2013
This is not a lighthearted post...
I often had to use the World Bank site www.doingbusiness.org for research when i studied for my second degree.
It ranks economies (countries) around the world for the relative ease of doing business.
Topics contributing to the annual ranking include;
Starting a Business
Each rank is averaged for the final score...
This year's report ranked 185 economies and Nigeria ranks 131. Same position as last year.
It is a very informative site and widely popular in the International Business world.
Of course it is very theoretical, with a population of over 160 million people and abundant resources, Nigeria is very attractive for Foreign Investment whatever its ranking.
In the last few months, i had the displeasure of testing the system for starting a business...
The website states it takes 34 days to start/register a business...(Limited Liability that is)
In my experience, it has taken more...
But i will not bore you the details...i want to delve into the one detail irking me...Opening a corporate account.
To open an account with a Local Nigerian Bank, you require Tax papers, Original Company registration documents and an anti-fraud certificate from the Economic and Financial Crimes Commission (EFCC).
This latter certificate was not included in the starting a business analysis/time frame.
I imagine it is a new regulation but why a certificate from EFCC to operate a company account?
I understand this is to curb fraudulent practices but this policy is a hindrance to operating a small business.
One of the key factors to drive economic growth is the ability to encourage Entrepreneurship.
Entrepreneurial activity is a pillar of economic growth. For evidence of the economic power of entrepreneurship, look no further than the United States, where young firms have been shown to be a more important source of job creation than existing firms.
Nigeria does not encourage entrepreneurship. You need to be very determined to begin and sustain a business in Nigeria.
Asides the issues of starting a business, the cost of running the business with the high cost of providing electricity drives many businesses to fail. We will only grow better as a country if we push ourselves to stop dreaming of being an employee and becoming an employer.
How can we do this? We must reform...
Take Rwanda as a case study, In 2009 Rwanda revamped its business start-up process, making it easier and cheaper to set up a limited liability company by establishing a one-stop shop and cutting the cost from about $350 to only $45. It takes a mere 3 days to register a business in Rwanda, How cool is that?
The best ranking for days to start a business is Canada with 1 day.
There needs to be a merging of all these agencies into a one stop shop where you walk in, register the company and get a corporate account immediately if required.
Nigerian Investment Promotion Commission was supposed to be that avenue, i have been there, They have nice brochures but please do not go there if you are serious about getting something done.
In any case they are not interested in small businesses so...
It is still taking me some time to get the EFCC document...we shall see how it goes...
I want to keep this post short so i will leave this here...