Why Would Obama Come Here When Doing Business is getting harder?

The discussions about why President Obama is visiting Ghana in July and not Nigeria are quite amusing, almost as amusing as President Yar’adua’s bewilderment about Nigeria not being invited to the G20 Summit. Wole Soyinka reasonably irked by the discussion, and when asked about it recently, said that he could stone President Obama if he graced Nigeria with his presence. A few days later there was a public response from the Presidency regarding Soyinka’s remarks. According to Ambassador Jibrin Chinade, Special Adviser to the President on Foreign Affairs, “It’s most unfortunate that a prominent citizen like Soyinka seized the opportunity…to attack his country…for somebody to speak at an art exhibition to say nothing else than to denigrate himself and his country that has done a lot for him is unfortunate and highly embarrassing.”

Apart from being slightly amused at the thought that Soyinka’s comments would have been okay if Nigeria had not done anything for him, I was more interested in understanding if Chinade deliberately missed the real issue behind Soyinka’s comment, or if he was pretending not to see the elephant in the room.

The issue is: why is Soyinka angry at the thought of President Obama coming to Nigeria? What is the reason for this outburst from a man who, while we acknowledge is no fan of most of our leaders, we can presume, like most of the world is a fan of Obama?

Because coming to Nigeria would be tantamount to a stamp of approval for the Nigerian government and the direction in which they are steering the country. Because coming to Nigeria would be like saying, Nigeria is doing well and this is a country to be associated with. Because coming to Nigeria would validate the state in which we find ourselves: total collapse of infrastructure and social services, war in the Niger Delta, rampant corruption amongst public officers and consistent violation of the electorate and electoral process.

But that is not the end of the story. If this story was unique to Nigeria which it is not – we only need to look at Zimbabwe and other war torn countries such as Angola and Sudan to find similarities with the situation we are in, then it makes sense that Obama would want to go to Ghana. Because Ghana is everything we are not. Ghana is a shiny example of a West African country which has turned itself around and is doing well.

Forget the more recent examples of Ghana outshining us with their free and fair elections or even the fact that more and more Nigerians are moving there or going there for their holidays, let’s use just one measure of comparison: doing business.

For the past six years, IFC and the World Bank have conducted and published a global survey ‘Doing Business’ on the regulatory reforms that make it easier to do business around the world. The Doing Business project is based on the efforts of thousands of local business consultants, lawyers, accountants, and government officials along with leading academics around the world that provided methodological support and review.

On May 21st 2009, Business Day ran an article with the heading ‘Again, Ghana Beats Nigeria in Business Competitiveness. The first line in the article was: ‘Once again, Nigeria could not earn a mention in the 2009 global survey on regulatory reforms…Ghana adjudged the best place to do business in West Africa.’

This could end the discussion on why Obama would be more interested in Ghana than Nigeria: Ghana is doing better. Out of 181 countries surveyed for the 2009 report, Ghana ranked 87th while Nigeria ranked 118th. For the past three successive years Ghana was one of the worlds’ best reformers of business and the best in West Africa. This year, three African countries, Senegal, Burkina Faso and Botswana were amongst the world’s best 10 reformers. Senegal which moved nineteen places in a year to rank 149th in 2009 made reforms in starting a business, registering a property and trading across borders. In starting a business, Senegal started a one-stop shop that merged seven start-up procedures into one and the time required to start a business fell from fifty eight days to eight.

The ten things which are considered in the ease of Doing Business are: starting a business, dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.

So where does Nigeria lie? Although the average income of Nigerian citizens (GNI per capita) at $930.00 is higher than Ghana at $590.00, our business processes are not better. When it comes to registering property, Nigeria holds the dubious position of being one of the most expensive and being one of the most regulated at 176th. We are also at the bottom of the list when it comes to paying taxes (120th), trading across borders (144th) and dealing with construction permits (151st).

One of the reasons why we are doing so badly with registering property is the outlandish Land Use Act of 1978 which requires Governor’s consent for property transfer. Some states have been smart enough to delegate this requirement while others hold on to it for reasons that most likely cannot be held up to scrutiny.

Unfortunately, most of these criteria used in ranking the ease of doing business are linked to the legal profession. Lawyers, judges and regulators have the power to do something about how long it takes to do business in Nigeria. For example with enforcing contracts, courts which have implemented the new High Court rules such as Abuja, Kaduna and Lagos are doing better already.

The solutions to these challenges lie with our laws and regulations. Was Nigeria’s ‘doing business’ rating a topic at the Section for Business Law conference in April? If it wasn’t then it should have been and if it was, what are the next steps?

Equatorial Guinea, a small country of only 700,000 people opened a liquefied natural gas facility two years ago which already exports over 3.7.million tonnes of LNG while Nigeria with a capacity to do a lot more, continues to flare and waste its gas. Considering the importance of energy to global politics and economy, if President Obama decides that his next visit to Africa will be to this small country, I hope no one will wonder why.