Biggest business challenges Nigerian entrepreneurs face

Nigeria has been making significant progress in terms of business reforms, as highlighted by its recent jump of 24 places in the World Bank's Ease of Doing Business report. The country has been recognized as one of the top 10 improved economies globally, with reforms primarily focused in Lagos and Kano. However, despite this positive momentum, Nigerian entrepreneurs continue to face a myriad of challenges that hinder their growth and success in the business landscape. In a recent interview on CNBC Africa, Muda Yusuf, Director General of LCCI, shed light on some of the major issues plaguing businesses in Nigeria. One of the critical challenges highlighted by Yusuf is the issue of energy, particularly from the public power supply side. The unreliable electricity supply, with discrepancies between generation and delivery to end-users, poses a significant obstacle for businesses across various sectors. The lack of reliable energy hampers operations and adds to the operational costs of businesses in Nigeria. Another major hurdle identified by Yusuf is the problem of policy inconsistency. Certain sectors, such as oil and gas, are heavily impacted by policy challenges, especially in the downstream and upstream segments. The over-regulation of the oil and gas sector, coupled with policy uncertainties like the Petroleum Industry Bill (PIB), dissuade potential investors and hinder the growth of the industry. Yusuf emphasized the need for prompt government action and the right policies to unlock the vast investment opportunities in the oil and gas sector. Moreover, Yusuf pointed out the significance of states taking proactive measures to address economic issues and attract investments. While states are increasingly focusing on enhancing their business environments to attract investors, the current federal structure poses challenges. State efforts to attract investors are often overshadowed by the centralized fiscal system, where most fiscal benefits from investors flow to the federal level. This disparity limits the incentives for states to attract investments and generate revenue internally. In terms of recommendations for the Lagos state government to improve the business environment in 2018, Yusuf highlighted key areas of focus. He emphasized the importance of addressing transportation challenges, streamlining the process of obtaining permits and clearances, and tackling the issue of multiple taxation. The bureaucratic hurdles related to approvals and permits, coupled with the burden of multiple taxes from local councils and government agencies, create a cumbersome environment for businesses to operate in. Overall, while Nigeria has shown commendable progress in improving its business environment, there are still significant obstacles that entrepreneurs face on a day-to-day basis. The challenges related to energy supply, policy consistency, and institutional bottlenecks continue to impede the growth and success of businesses in the country. Addressing these challenges will require concerted efforts and strategic reforms to create a more conducive environment for Nigerian entrepreneurs to thrive and contribute to the country's economic development.