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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
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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.
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Doing Business measures areas of regulation that are important throughout the life cycle of small and medium size firms
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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%
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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
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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
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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
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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)
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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
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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
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A state’s regulatory environment may be more business friendly in some areas than in others
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States that strive the most to maintain an active dialogue with their peers have a better business regulatory environment
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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.
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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.
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Ogun, Niger, Cross River, Ekiti, and Rivers narrowed the gap with the regulatory frontier of good practices the most since 2010
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Six states significantly reduced the time to start a business
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Ogun radically transformed the construction permitting process
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Property registration fees are generally high, but vary greatly across Nigeria
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Clearing court backlogs resulted in faster contract enforcements in Niger, Ekiti and Kaduna
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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.
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Adopting local good practices already existing in Nigeria would improve the business environment across the country
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Thank you! For more information:www.doingbusiness.org/Nigeria