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An independent assessment of Nigeria’s Ease of Doing Business activities by @yomitheprof



On campus students have several strategies for academic success. For subjects that are easy to read, understand and pass, they may approach the examination with all the confidence in the world. However, for subjects that are difficult to read, understand or comprehend, students may use another tactic… They focus only on passing the examinations and may even engage God in prayer. The prayer is not for God to make them understand the subject, the prayer is that God should let the examination questions come from the part of the notes they read!

At the root of that prayer are two critical issues. One, understanding the subject is not important. Two, getting a pass mark in the examination is more critical than understanding.

It seems that is the scenario that’s playing out with government recent attempt on our Ease of doing Business.

Nigeria currently ranks 169 out of 190 economies in the World Bank Doing Business Rankings. The 2016 Enabling Trade Report put Nigeria’s overall rank at 127 of 136. Government is concerned and took a series of action to change these poor rankings:

First, to focus on the task of improving the ease of doing business, the Presidential Enabling Business Environment Council (PEBEC), was established. The vice president of Nigeria, Professor Yemi Osinbajo (SAN) is the chair of the council with membership from the relevant ministries and government departments.

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Second, PEBEC on February 21, 2016, approved a 60-Day National Action Plan on the Ease of Doing Business with clear deliverables and timelines for the Ministries, Departments and Agencies (MDAs) responsible for implementing each line item in the Plan. This was a clear statement of commitment and opportunity for monitoring and evaluation. (However the Minster for Aviation seems to be the gold standard. He set a target for a project and promised to resign if he didn’t meet the target. The PEBEC folks didn’t offer to resign though). It is believed that all these will make it easier for Micro, Small and Medium Enterprises (MSMEs) to do business in Nigeria.

This plan targeted some priority areas: starting a business, dealing with construction permit, getting electricity, registering property, getting credit, trading across borders, entry and exit of goods, entry and exit of people, payment of taxes as well as government transparency and procurement. The plan covered specific actions between February 21st and April 21st, 2017.

Third, a target was set to improve Nigeria’s ranking in the World Bank Doing Business Index by 20 points from the current 169 to 149.

I think the 60-day plan may be the most significant part of this process. The PEBEC seem to have two characteristics that makes it stands out from several government initiatives.

One, The PEBEC seems to have a system and research based approach to their work. They seem to have scoped the issues very well and identified where its most easy to start from.

Second, the multi-disciplinary nature of the PEBEC allows for the best of brains including the implementing agencies


What is clear is that PEBEC is using the world Bank Ease of Doing Business (EODB) assessment as its methodology. Thus, the council seems to be focused on initiatives that will ensure Nigeria gets a better ranking at the next survey. Unfortunately, while Nigeria may have a better ranking on the EODB it doesn’t necessarily mean it’s gotten easier to do business in Nigeria. This is very like the scenario I earlier painted of the student who sets passing as the target and not understanding.

Having concluded the 60-day window, what’s next?

Time to introduce another 180 day plan of action

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I think the PEBEC should start another 180- plan of action. This is to sustain the pace and drive accountability. I also want to suggest the below initiatives for the next the 180-days.

One, PEBEC should continue all that has been and develop institutions to deepen it. Some of the changes happened because of external influences and now is the time to raise internal champions and advocates to sustain the changes in the various organizations. Also, having some rules and administrative procedures to ensure we don’t lapse back into bad practices is also important.

Second, PEBEC should widen its network, recruit and engage more stakeholders in his assignment.  It’s very important to engage the state and local governments. The involvement of other critical stakeholders including professional bodies should also be enlisted. The Lagos state planning process is now online which makes it easy to access and seek planning approval. This will ease the process of getting construction approvals.  However, a week after this was implemented, The Nigerian institute of Survey increased land survey fees by over 150% in Lagos! Unfortunately, you need a survey before you seek for planning permission. This higher cost will therefore frustrate the advantage of planning the planning process online.

Third is to tackle is for the committee to start to focus on what the average businessman in Oke arin or ariara market sees as ease of doing business. These will include a whole lot of initiatives like approvals, harassment in business premises, multiple taxation, government magic etc.  The situation of informal business owners like tricycle operators, hawkers, petty traders is more precarious. They are made to pay numerous associations, local governments and in some cases touts and also suffer severe hardship. They need to be engaged to understand and ensure they can carry out their businesses easily.

Fourth, the issue of multiple taxation needs a lot of attention. The Joint Tax Board is meant to harmonize taxes but I am not sure how effective they have been.

A lesson from a hotel operator

In an article titled “The Cost of Doing Business in Nigeria — Hotels Edition”, the author listed various fees and charges payable by hotels in Abuja.  I distilled a couple of issues from the article.

One, many agencies collect fees from businesses: local government (AMAC), the Federal Capital Development Authority (FCDA), the Consumer Protection Council (CPC), the Copyright Society of Nigeria (COSON)

Two, there is no harmonization between these agencies on what is to collect what. Thus, businesses are charged by more than one organization for the same fee.  For example, both the local government (AMAC) and the Federal Capital Development Authority (FCDA) charge hotel owners for sign boards


Three, Professional associations and trade unions also impose their numerous charges on the businesses.

Four, there are charges that are plain ridiculous. For example, you pay a fee for having a parking lot. These fees are demanded for regardless of if the business is making a profit or not

Fifth, there is a need to change the mindset of the Nigerian government and regulators about their role as facilitators of businesses. Sometimes, you see acts that shows that government doesn’t care about businesses. Laws that stifle businesses are made, bills and fees are charged and business owners are harassed if they default. Some governments even have enforcement teams who go out daily to harass and intimidate business owners.

Sixth, PEBEC needs to develop an effective feedback system. What’s working? What’s the root cause of success? What’s being done to circumvent it? The need for an effective, accessible and prompt feedback system cannot be overemphasized.

Seventh, the leadership commitment to improving the ease of doing business needs to be sustained. The Vice President clearly showed his seriousness and commitment to reforms when he made an unscheduled and unannounced visit to inspect the facilities at the Murtala Mohammed International Airport in Lagos. This airport is the critical entry point into Nigeria and a focus for the 60-day plan. Such visits, pronouncement and similar gestures must be frequent and sustained

Finally, we need to Incentivize ease of doing business in Nigeria. Everyone should see it as the moral imperative. And in the case of government, there should be consequences for improving the ease of doing business. This can come in the form of adding a head of claim on ease of doing business in the VAT allocations or in the determination of derivation payment.

In conclusion, Nigeria needs to remember that virtually all countries are seeking to improve their ranking in the Ease of doing Business. The competition is fiercer as countries like Ghana and Cote d’Ivoire have shown a lot of aggression in making their countries leading lights in the West African sub-region. Cote d’Ivoire moved 11 places between 2014 and 2015 (Nigeria only moved 5 places). And for Ghana, ranked 70th in the 2015 EODB (Nigeria was ranked 170th) we have a more severe competitor because Ghana is much closer to us.

We can’t afford to rest on our oars. We need to heighten our pace to make a difference for businesses in Nigeria.

This article was contributed by Yomi Fawehinmi. Yomi is a development consultant and social entrepreneur. 

Nairametrics is Nigeria's top business news and financial analysis website. We focus on providing resources that help small businesses and retail investors make better investing decisions. Nairametrics is updated daily by a team of professionals. Post updated as "Nairametrics" are published by our Editorial Board.

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Julius Berger’s rebound contingent on full economic bounce back

Julius Berger’s construction portfolio includes infrastructure, industry, building, and facility services solutions.




Due to the COVID-19 pandemic as well as the economic impact of the measures put in place to slow the spread of it, many industries have experienced slower growth. The construction industry was not left out. According to reports by GlobalData, the construction output growth forecast for Sub-Saharan Africa (SSA) has been revised to 2.3%, down from the previous projection of 3.3% (as of mid-April) and 6.0% in the pre-COVID-19 case (Q4 2019 update).

The reason for the contraction was noted by GlobalData to be as a result of the global slowdown and the outbreak of COVID-19 in the region. Other factors responsible include economic headwinds such as inflation, spending cuts, widening fiscal slippages, suspension of certain projects and more that could disrupt the construction sector. This contraction is projected to be 4.3% in South and Southeast Asia while France is expected to shrink by 9.4% in 2020.

Leading Construction Company, Julius Berger, had foreseen the contraction in the industry and commenced efforts to mitigate its impact and cushion the blow. One of such efforts was the reduction in dividend pay-out. After initially announcing a dividend pay-out of N2.75K per 50K share for the financial year ended December 31, 2019 and a bonus of 1 (one) new share for every existing 5 (five) shares held, the company eventually recommended a final cash dividend pay-out of N2.00K per 50k share.

READ ALSO: Lafarge Africa is cutting it all out

It noted that the Group had “carefully considered the emerging social, operational, financial and economic impact of the COVID 19 pandemic, the outlook for Nigeria for the financial year 2020, and the impact on the business and cash flows of the Group.”

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The company’s fears have been confirmed by its recent financials which, among other negatives, showed huge foreign exchange losses of N3.102 billion in the first half of 2020.

Q2 was the hardest

Julius Berger’s construction portfolio includes infrastructure, industry, building, and facility services solutions. With companies and nations alike revising scheduled capital expenses as a result of the shrinkages in product demand (owing to global quarantine measures), uncertainties around supply logistics as well as supply of materials, the company had gotten hit. Q1 had its own issues, but Q2 birthed a new dimension of challenges for the company.

Revenue was down 33% from N68.9 billion in Q2 2019 to N46.1 billion in 2020. There was also a huge loss in profit after tax of around 200% from a profit of N2.3 billion in Q2 2019 to a loss of N2.3 billion and this can be attributed to lower revenue, and increased losses from the company’s many investments.

Exchange difference on translation of foreign operations for the quarter alone increased by 227% to N1.4 billion in Q2 2020 from N438.5 million in the comparative quarter.

READ ALSO: Petrol importation drops by 512 million litres in 3 months

Outlook for the company and for investors


The disruptions the construction industry is currently experiencing is expected to continue for the medium-long term. Reports by Beroe Inc., a procurement intelligence firm, reveal major concerns that companies in the industry will witness profits being hurt and may even incur losses on a number of projects.

Companies having worldwide supply chains could see tier 2 and tier 3 suppliers highly affected by disruptions related to the pandemic. Worse off, it explains that construction materials like “steel, wood, plaster, aluminum, glazed partition systems, cement and cementitious products, paints, HVAC equipment, electrical equipment, and light fixtures from China are expected to be delayed.”

For the company, cost-cutting has never been more important. While there are a series of strategies it could explore to augment the challenges, its growth right now depends largely on the speed of global economic recovery. This is because both the company’s input needs as well as its output in terms of the recommencement of projects, depends on the speed with which business as usual commences and the amount of time it takes for the industry to find a new balance for its operations.

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READ MORE: The “new normal” in business and economy

For investors, however, this presents a long term opportunity. Julius Berger currently trades at N15.05, falling 44.26% just within the last 3 months. The share price is also on the downside of its 52-week range (N14.42 and 22.92) and its price-to-book ratio of 0.6331 shows that the stock is undervalued.

While the company’s EPS is currently low at N2.52, investors who are willing to wait the time could find a gem in the stock particularly with the increased infrastructural needs born out of the population expansion which is taking place in many parts of the world in the years to come.

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Total Nigeria caught in the oil demand and lockdown saga

In Q1 2020, the company had recorded a revenue drop of 9.3% to N70.2 billion compared to Q1 2019.



Total Nigeria caught in the oil demand and lockdown saga

The year 2020 was supposed to be a good one for the global oil and gas industry. Save for the unprecedented fangs of the Covid-19 pandemic, the IEA had forecasted in February that the global oil demand would grow by 825,000 barrels a day in 2020. On the contrary, lockdown measures restraining travel and other economic activities to contain the pandemic in many parts of the world had global oil demand down around 90,000 barrels a day from 2019. While the upstream sector had a direct hit owing to this reduced demand, the impact of the pandemic on the downstream oil industry caused the price of crude oil to fall significantly in a short period of time. GlobalData had forecasted that the energy sector would face downward earnings revisions of 208% in 2020.

READ MORE: Analysis: Total Nigeria needs a financial overhaul

With the pandemic leading to a slowdown in a wide range of business and personal travel, even gasoline demand had reduced and this has led to inventory challenges in both the distribution network as well as the refineries. In Nigeria, following the challenges of the pandemic, the federal government deregulated the downstream sector of the oil industry through the removal of fuel subsidy. While it presents a level playing field for the downstream oil private sector, it didn’t take long before companies like Total Nigeria plc. started caving into the overall reduction in inventory from the reduced demand for oil products in Q2 2020. Consequently, the company witnessed a 45% reduction in inventories from N33.6 billion as at 31st December 2019 to N18.5 at the end of Q2 2020.

READ ALSO: Nigeria’s Foreign Trade hits N9.18 trillion in Q3, as non-oil export rose by 374.5%

How the exogenous shocks affected an already ailing Total Nigeria

The success or failure of any organization depends on both the macroeconomic environment as well as the operations of the company itself. For Total Nigeria, the timing for the crisis had been off as it too had operational challenges to deal with. In Q1 2020, the company had recorded a revenue drop of 9.3% to N70.2 billion compared to Q1 2019. While the headwinds of the pandemic might have played a small role in the decline at least in the latter part of the quarter, the loss after tax of N163 million it had recorded was 65.6% better than the loss after tax of the  comparative quarter – a testament of the series of operational challenges it had from huge loans to raging expenses. While the company had set off on a strategic trajectory deploying a series of initiatives around cost efficiency, process optimization, as well as a significant reduction of working capital requirement and finance costs, Q2 had its own troubles waiting.

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Restrictions in the oil market had led to weaknesses across product lines. Total revenue fell by as much as 50% from N73 billion in Q2 2019 to N36.5 billion in Q2 2020. Revenues from petroleum products had contracted by 55.7% while lubricant sales also fell by 26.7% in the quarter. Across the company’s core business sectors comprising Networks, General Trade, and Aviation, revenue from aviation experienced the most decline, falling by 83.0%. Its performance can be predominantly attributed to the fall in demand owing to strict lockdown measures even in major Nigerian cities.

READ MORE: Five oil majors reduce value of their assets by $50 billion in Q2


The outcome of the company’s internal and external challenges is a loss after tax of N373.9 million from N604 million in Q2 2019 – an alarming drop of 161.9%. However, its strategic intent is also visible. Net cash balance was a negative N19.6 billion at the end of the quarter, compared to negative N41.8 billion a year ago. Finance costs also declined by 76.1% to N830.3 million as the company sought to reduce its leverage position. In the same vein, borrowings came at N31.0 billion in Q2 2020 as opposed to the N39.9 billion in Q2 2019. Yet, the success of the company in the immediate future is somewhat bleak.

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This is because of the conditions of the oil market and overall economic landscape which is set to take a few years before returning to the norm as well as the financial and operational position of the company. That said, its earnings per share (EPS) of N4.37 and its price-to-earnings ratio of 18.12, reveal that the company has a good potential to make a rebound. However, it could take a few years. Hence, investors must be willing to wait for the long term. With its share price of N79.10 at the far bottom of its 52-week range of N78 and N129.50, it’s a great time to purchase its shares if you are willing to wait the long term.

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Implications of CBN’s latest devaluation and FX unification

This move portends significant implications for Nigeria’s public and private sector.



Implications of CBN's latest devaluation and FX unification, current account deficit, IMF, COVID-19, CBN OMO ban could give stocks a much-needed boost , CBN’s N132.56 billion T-bills auction records oversubscription by 327% , Nigeria pays $1.09 billion to service external debt in 9 months , Implications of the new CBN stance on treasury bill sale to individuals, Digital technology and blockchain altering conventional banking models - Emefiele  , Increasing food prices might erase chances of CBN cutting interest rate   , Customer complaint against excess/unauthorized charges hits 1, 612 - CBN , CBN moves to reduce cassava derivatives import worth $600 million  , Invest in infrastructural development - CBN Governor admonishes investors , Credit to government declines, as Credit to private sector hits N25.8 trillion, CBN sets N10 billion minimum capital for Mortgage firms, CBN sets N10 billion minimum capital for Mortgage firms , Why you should be worried about the latest drop in external reserves, CBN, Alert: CBN issues N847.4 billion treasury bills for Q1 2020 , PMI: Nigeria’s manufacturing sector gains momentum in November, CBN warns high foreign credits could collapse Nigeria’s economy, predicts high poverty, MPC Member, BVN, Fitch, Foreign excchange (Forex), Overnight rates crash after CBN’s N1.4 trillion deduction, Nigeria’s foreign reserves hit $36.57 billion; Emefiele keeps his word on defending the naira, CBN to support maize farmers, projects 12.5 million metric tons in 18 months

The CBN devalued the naira by 5% at the end of last week, adjusting the official exchange rate to N380/$1  in a major move aimed at unifying the multiple exchange rate windows.

Whilst no official confirmation was issued by the apex bank, its website displayed the buying rate of N379/$1 and selling rate of N380/$1. Nigeria is clearly in a new exchange rate territory.

This move portends significant implications for Nigeria’s public and private sectors. Since March when the CBN last depreciated from N307/$1 to N360/$1, there have been calls for further depreciation to at least close the gap between the official CBN rate and the more market-friendly NAFEX exchange rate. The NAFEX rate has traded between N385-390 in recent weeks.

READ MORE: Manufacturing sector in Nigeria and the reality of a “new normal”

Government Finances

For the federal government, devaluing the naira solves two major issues:

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  • Firstly, it increases the amount available to share from the Federal Allocation (FAAC) between the FG and States.
  • Oil proceeds, which is a major source of revenue sharing for the government is deposited at the CBN and then converted to naira using the official exchange rate of N360/$1. The CBN’s latest devaluation suggests more money for the government as the conversion rate is now N379/$1.
  • Government taxes that are priced in forex but converted to naira also stand to gain a major earnings boost.
  • Custom duties, petroleum profit taxes, and other charges will now be converted at an exchange rate of N379/$1 or whatever new rate the CBN chooses, assuming it will work within the NAFEX band.
  • A second issue the solves is the condition precedent towards obtaining a $3 billion world bank loan. The government applied for a world bank loan as part of its N2.3 trillion stimulus expected to be injected into the economy.
  • It is understood that a unification of the exchange rate is critical to the disbursement of the loan.

Whilst these are positives, the government will record cost escalations for some if not all of its capital projects and expenditure. From vehicle purchases to furniture and fittings we should expect a spike except the contracts are fixed-priced.

READ ALSO: Explained: CBN’s powers to seize bank account of criminals

Private Sector

The impact of the latest devaluation will also be significant for the private sector.

  • While the private sector has recorded its own devaluation via the NAFEX and more recently the SMIS window, the impact of the CBN’s latest move will still be felt.
  • Most private pubic partnership projects, contracts are priced using the CBN official exchange rate. The price will now change to N379/$1 at the least.
  • The latest move could also lead to a reopening of forex sale to BDC’s which the CBN suspended in March as the Covid-19 pandemic ensued.
  • Sectors such as Power, Downstream Oil and Gas where the government has control over pricing will be significantly affected by the new price.
  • An example if fuel prices. With the exchange rate devalued again, fuel prices might increase if the impact of the exchange rate is reflected in the pricing template.

READ MORE: Expert simplifies FIRS’ newly-introduced stamp duty

NAFEX versus Official Rate

It is not clear how the latest round of devaluation affects the NAFEX rate and other separate rates currently in use by the CBN. Whilst the disparity has been closed somewhat, we still do not know if these windows will be retained or if we will just have two major exchange rate windows, the BDC and the NAFEX.

Most critics of the CBN’s forex policy prefer a uniform exchange rate that is floating or under a managed float system. The difference is that the CBN intervenes occasionally to ensure the exchange rate trades within its preferred band. It does this even if it means burning through its thin reserves.


We expect a string of circulars in the coming days which will perhaps douse some of the confusion providing needed clarity to the exchange rate situation.

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