Established by the World Bank Group, Ease of Doing Business (EoDB) index is a ranking system. In laymen’s terms, the Ease of Doing Business Index is the measure of how easy it is to conduct business in a country.
According to the EoDB index, higher rankings indicate better, usually simpler regulations for businesses and stronger protections of property rights. The following parameters are used to develop an overall EoDB ranking for 190 economies:
- Starting a Business
- Dealing with Construction Permits
- Getting Electricity
- Registering Property
- Getting Credit
- Protecting Minority Investors
- Paying Taxes
- Trading across borders
- Enforcing Contracts
- Resolving Insolvency
- Employing workers
- Contracting with the government
Starting a business
This indicator measures procedures, time, cost and paid-up capital to start a limited liability company for men and women.
Dealing with construction permits
This means the procedures, time and cost to complete all formalities to build a warehouse, the quality control and safety mechanisms in the construction permitting system.
This indicates procedures, time and cost to get connected to the electrical grid, the reliability of the electricity supply and the transparency of tariffs.
This encompasses the processes, time and cost to transfer a property and the quality of the land administration system. Nigeria improved its land administration process through a geographic information system. The time for registering property increased a little to 92 days.
This entails movable collateral laws and credit information systems.
Protecting minority investors
Here, minority investors’ right in related party transactions and corporate governance are protected.
This has to do with payments, time, total tax and contribution rate for a firm to comply with all tax regulations and post-filing processes. During the reporting period of 2018/2019, a taxable person in Nigeria paid taxes in 343 hours.
Trading across borders
This index deals with time and cost to export the product of comparative advantage and import auto parts. Through the introduction of an electronic payment of fees, the time for complying with documentary and border regulations in Nigeria is reduced very much to 564 hours. The reforms were cost-effective and time-efficient.
This measures the time and cost to resolve a commercial dispute and the quality of judicial processes for people.
This comprises of the time, cost, outcome and recovery rate for commercial insolvency and the strength of the legal framework of insolvency.
This measures flexibility in employment regulation.
Contracting with the government
This indicates the procedures and the time to participate in and win a work contract through public procurement and public procurement regulatory framework.
Ease of Doing Business Ranking
A high EoDB ranking indicates that the regulatory environment is more conducive for starting and operating businesses. According to a report published by The World Bank (WB) in 2019, Nigeria’s ranking jumped from 146 to 131, representing its second-highest annual progress of 11.45% in a decade. Based on the parameters, dealing with construction permits (14.6%) and trading across borders (6.1%) had the best growth. Other areas in which Nigeria improved significantly include starting a business, getting electricity, registering property and enforcing contracts. The World Bank Ease of Doing Business Report for 2020 listed Nigeria as one of the ten countries with the “most notable improvement”. Alongside Nigeria, other economies that improved the most on the ease of doing business after implementing regulatory reforms include Saudi Arabia, Jordan, Togo, Bahrain, Tajikistan, Pakistan, Kuwait, China, and India. To rank as the top 100 economies in 2023, FGN needs to give urgent intervention to majorly these four indicators: Registering a property, trading across borders, getting electricity and paying taxes.