Africa is said to be the world's last economic frontier and massive potential for economic growth abounds on the continent. Sub-Saharan Africa is predicted to have the fastest economic growth of any region at a rate of 4.5% in 2015, surpassing Asia. But there seems generally to be a caveat: The rapid growth must create jobs and benefit everyone in society, rather than exacerbate inequality, and must be sustained. In other words, an enabling environment that will help transform Africa's rising Gross Domestic Product (GDP) into inclusive growth and sustainable development must be put in place.
Notably, of all the factors that engender economic growth in any nation, the legal and regulatory framework which govern and oversee the business sector are most critical. They determine, from the onset, the limits placed on the innovative ingenuity of local entrepreneurs and indicate to foreign investors that the country is ready to receive investment and skills transfer. Stated national goals, objectives and policy directives, though strongly persuasive, do not have the force of law and will not bind our Regulators. The provisions of economic regulations and the attitude of regulators who implement these regulations impact on the ease of getting business done in any economy, and ultimately determine the pace of economic growth.
Recognizing these concepts, the Nigerian Bar Association, Section on Business Law’s (NBA-SBL) 9th Annual Business Law Conference which held in Lagos between 7-9 June 2015 settled on the theme: "Regulators as Catalysts for Economic Growth."
The Global Competitiveness Index (GCI) published yearly by the World Economic Forum (WEF) identifies in its 2015 edition that the majority of African countries are among the least competitive in the world and Africa's overall competitiveness has remained stagnant in spite of 15 years of strong growth. Corroborative statistics from the World Trade Organisation (WTO) measure Africa's share of global trade at 3.5%, whereas according to the United Nations, the continent's share of global population is currently estimated at 15%. The WTO further states that Africa's tiny share of global trade is substantially done only within the continent itself. Intra-African trade currently accounts for only about 12% of the African continent's total trade compared to Latin America, Asia and Europe with 22%, 55% and 70%, respectively. Accordingly, business regulations on the continent need to become more investor-friendly, so that the continent can compete favourably with the rest of the world.
Nigeria, which has the largest economy and the largest population in Africa, only ranks 127th out of 144 countries on the GCI 2014-2015. According to the Africa Competitiveness Report 2015 – a joint initiative by the African Development Bank (AfDB), the World Bank Group, Organisation for Economic Cooperation and Development (OECD) and the World Economic Forum (WEF) – released within the framework of the GCI on 4 June 2015, it is recommended that for Africa to achieve a quantum economic leap, barriers to trade must be reduced and regulatory framework must be strengthened. We must have policies in place which assure easy access to finance; simplify the process of land acquisition and obtaining property rights; create efficient and timely dispute resolution mechanisms; and enshrine transparent and stable government policies.
Nigeria's poor showing on the GCI is a reflection of its poor rating on the World Bank's Ease of Doing Business Index (EODBI). The EODBI "measures regulations affecting 11 areas of the life of a business," according to the Doing Business Report (DBR). These areas include; starting a business; dealing with construction permits; getting electricity; registering property; obtaining credit; protecting minority investors; paying taxes; trading across borders; enforcing contracts; resolving insolvency and labour market regulation.
