Business licensing reform: Attention, Nigerian regulatory agencies

Perhaps, the time can’t be more urgent to make a resounding call upon the Nigerian regulatory agencies tasked with the statutory duty of issuing business license to make reforms. To put it simply, the procedures and requirements for registration of businesses are complex and onerous. It is needless to say these complex processes are counterproductive […]

Perhaps, the time can’t be more urgent to make a resounding call upon the Nigerian regulatory agencies tasked with the statutory duty of issuing business license to make reforms. To put it simply, the procedures and requirements for registration of businesses are complex and onerous. It is needless to say these complex processes are counterproductive to business.
The World Bank’s Doing Business ranked Nigeria 169th out of the 189 countries studied in 2016 for Ease of Doing Business. No thanks to our too rigorous and costly licensing process. This is embarrassingly disappointing, not least when we are supposed to be the largest economy in Africa. We ranked lower than many Sub-Saharan African Economies when it comes to ease of doing business, according this report.
It takes, on average almost 40 days to get a license to start-up a business in Nigeria when other developing countries, like Singapore do it within a day. Business registration in Nigeria follows a series of time-consuming journeys to and from: CAC, FIRS, NAFDAC, NIPC, Ministry of commerce in states etc. It is exhausting and costly, especially for Small and Medium Enterprises (SMEs).
Research has shown that simple, cost effective method of licensing and registration of businesses encourage more investment and allows small firms to expand. Thereby, generating income for working families, foster increased revenue to the government via taxation as well as improvement in overall GDP output. Asian developing economies, such as Singapore, Malaysia, Thailand that undertook pragmatic reforms in the early 2000s to streamline their licensing procedures are now reaping the benefits. The reforms are clearly attracting more SMEs and more FDIs are coming to their shores as a result of a simplified, one-process method of licensing they adopted as against the multiple procedures they once had.
Nigeria should have followed the Asian simple model long time ago. Well, it is not too late but the problem is that I don’t see much discussion about making these needed reforms from those that matter- the regulatory agencies. Instead, it’s international NGOs such as GEMS3 Growth and Employment in States, funded by the EU and their likes that are advocating for reforms in this regard. May I take this opportunity to call on the federal government and all the states where GEMS3 is not yet present to replicate their wonderful efforts by engaging organized private sector and other stakeholders through Public Private Dialogue to make these reforms as quickly as possible. This will ensure mutual benefit amongst the stakeholders.
Some argue that, as a result of the difficulty in getting a business licensed, most SMEs prefer to operate unregistered and would rather deal with compliance cost when they get caught. This is bad for the economy if it is not dangerous. One example of the dangers is that, unregistered pharmaceutical companies may pose a public health risk or in other sectors even security threat.
It is my hope that our regulatory agencies should abandon their quest for quick money from charging different layers of fees before they give license to businesses.
A greater benefit will accrue to the economy, the enterprises, and the Nigerian employees generally if more businesses are encouraged to operate by making the licensing process simple and at a reduced cost.

Amir Bagwanje, [email protected]