The Economic and Employment Policy Reforms Component of the SEDIN programme is working with both private and public institutions to improve the framework conditions, business enabling environment and promote policies in favour of MSMEs, employment and local economic development.
This is achieved through several approaches such as policy research; mapping and analysis (identification of opportunities, gaps etc), ease of doing business assessments, policy dialogues and Public Private Dialogues (PPDs), technical support to development of policies and strategies, capacity development for public institutions, support to private sector advocacy, sensitisation and awareness among others.
Some of our achievements are:
- Tax harmonization laws enacted in Niger, Ogun & Plateau States to address the challenges of multiple taxation and improve the payment process for MSMEs.
- In Plateau the number of taxes, fees and levies required to be paid have been reduced from 64 to 21 with the new law.
- 50%-65% reduction in time required for obtaining construction permits in Ogun state, same for land titles in Plateau & Niger state.
- Commercial Dispute Resolution (CDR) support provided to 30 local markets in 5 states.
- 10,000 MSMEs trained in contract management to enhance their contract management skills.
- 1,057 stakeholders trained in Alternative Dispute Resolution (ADR) in 9 partner states as part of support to enhancing the system for commercial dispute resolution.
- Two (2) new Multi-Door Courthouses established in Plateau and Niger States and the capacity of existing Multi-Door Courthouses in Ogun, Edo and Ondo states enhanced.
- 100 judicial officers trained and 20 new Small Claims Courts established in Plateau and Kaduna States to provide easy access to an informal, inexpensive and speedy resolution of simple debt recovery disputes for MSMEs.
- One Stop Investment Centers established in Plateau and Niger and capacity of State Investment Promotion Agencies enhanced in Lagos, Edo and Ogun.
- Four (4) out of 11 policies developed to enhance MSMEs’ growth and employment promotion has been adopted for implementation in partner states.
- Improved the institutional framework for gender inclusion in partner states; in Plateau State, gender focal persons have been appointed for 35 key MDAs and 17 LGAs and trained. In Niger, State Gender Policy has been adopted and gender focal persons trained. In Ogun and Edo, state gender policies have been developed and awaiting adoption.
SEDIN’s intervention in the field of economic and employment policy reforms are evidence-based. Data plays a key role in driving and galvanizing support for reforms both from the private sector as well as from the public sector. Hence, Policy Research and Ease of Doing Business Assessments are critical parts of SEDIN’s support to partner states and stakeholders.
In all the partner states, the programme has supported the assessment of the policy and business environment to understand what is working well and needs strengthening, what is not and the gaps, regulatory and institutional constraints, key actors and stakeholders, available capacity and limitations, reform recommendations and costs among others. These form the basis for developing interventions together with stakeholders and accounted for the success of the reform interventions in partner states.
Edo Policy Audit Report 2021. Report of Policy Mapping and Analysis_PLATEAU final_2020
Public-Private Dialogue is one of the key problem-solving and private sector development tools SEDIN is supporting in partner states. It is a process for consultation, joint identification of problems and development of joint solutions between the public sector actors and MSMEs. A substantial part of SEDIN’s support in this area goes into building the capacity of both public and private sector actors to understand PPD as a problem-solving tool and how best to deploy it for better results. Additionally, the programme supports actual organisation of PPDs on relevant issues and supports implementation of resolutions of the PPDs. About 28 PPDs have been supported under the current phase of the programme and some of the recently supported PPDs include 3 PPDs in Ogun State (PPD on AfCFTA with Ogun Chambers of Commerce, PPD on business constraints for women with 8 BEE issues identified and PPD on the establishment of Enterprise Development Agency); 5 PPDs in Edo State (PPDs on access to finance for MSMEs, access to market, taxation, access to power for businesses and local content policy of the state) with 21 key resolutions; 1 PPD on the implementation of the Equipment Leasing Act to enhance access to equipment leasing for MSMEs; 1 PPD on Lagos State Plastic Waste Management Policy.
In addition to using PPD as a tool for private sector development, the programme is also supporting coordination and collaboration among private sector organisations and building capacity of private sector network on advocacy.
Business Registration, Tax and Land/Construction Permit
Registering a business and obtaining all relevant permits as well as registering property and paying taxes are some of the key business enabling environment topics SEDIN is working on with state partners. The business registration here is not limited to incorporation at Corporate Affairs Commission (CAC) but also looks at registration of cooperatives and other formalization processes including registering products at NAFDAC and SON. In the area of tax reform, SEDIN is working with partners to harmonize heads of taxes, remove multiplicity and duplication, harmonize collection, increase transparency and strengthen tax redress mechanisms for MSMEs. SEDIN is also supporting adoption of tax for service with business associations and automation of tax processes to ease collection and eliminate corruption. In the area of land/property registration and construction permits, SEDIN is supporting automation and streamlining of property registration and building permit processes to reduce time and cost for businesses.
Commercial Dispute Resolution and Contract Enforcement
One of the key indicators used by the World Bank as well as other business environment assessing institutions including Presidential Enabling Business Environment Council (PEBEC) in assessing national and states economics across the world is the ease of enforcing contracts. This basically deals with how easy it is to enforce commercial and trade contracts among businesses in terms of number of processes, ease of the processes, cost, and predictability of the processes. SEDIN is working with partner states to improve the system for commercial dispute resolution and contract enforcement in the state. The work in this area covers;
- Training on contract management for MSMEs.
- Technical support for the establishment of Multi-Door Courthouses and ADR centers.
- Capacity development for stakeholders on ADR and certification in Mediation and Conciliation.
- Technical support for the establishment of Small Claims Court.
- Peer learning among states on innovations to improve the system for commercial dispute resolution and contract enforcement.
- Capacity development for business associations/chambers and markets to deliver commercial dispute resolution services within business associations and in markets.
- Awareness engagements with MSMEs to understand what contract enforcements services are available and how to access them.
Regulatory Frameworks for Access to Finance
Limited access to finance is listed by MSMEs as a major constraint to doing business in Nigeria. In the 2017 SMEDAN/NBS MSMEs Report, poor access to finance was listed as a major challenge by surveyed MSMEs. While 67.9% of small and medium businesses identified access to finance as a challenge, a whopping 90.5% of micro businesses identified access to finance as a challenge.
While many factors can be adduced for this poor access to finance for MSMEs in Nigeria, one major one that is not receiving enough attention is the huge deficiency in the legal, regulatory and institutional framework for MSME financing in Nigeria. There are many government schemes aimed at addressing the financing gap with limited coordination and collaboration. Similarly, there is a challenge of limited synergy between federal financing agencies and state agencies supporting MSMEs. To address these challenges, SEDIN is working with Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) and other financing actors like Central Bank of Nigeria (CBN), Development Bank of Nigeria, NEXIM bank, State SME Agencies and other stakeholders to enhance collaboration and synergy particularly around MSMEs financing in line with the National Policy on MSMEs.
In addition, an analysis done by the programme after many years of supporting micro-finance banks and building the capacity of MSMEs to meet bank criteria shows that bank loan alone cannot meet the needs of MSMEs especially with the high interest rate payable on bank loans in Nigeria. The analysis shows the need to enhance access to alternative sources of funding for MSMEs. These include crowdfunding, franchising, equipment leasing, factoring among others. SEDIN is currently working with relevant institutions to strengthen the legal and regulatory framework needed to enhance access to these alternative financing options.
Economic growth and poverty reduction are key indicators used towards measuring the development of economies and nations and these are core objectives of the SEDIN programme. But how can growth and income generation be triggered? One way is to make it easy for businesses to invest, grow and employ. This can be achieved with the creation of good investment climate and business enabling environment through reforms. SEDIN is supporting Nigerian Government and partner states to improve investment climate nationally and at sub-national level through active partnership with the Nigerian Investment Promotion Commission (NIPC) and state Investment Promotion Agencies (IPAs). Part of this support include;
- Establishment and institutional strengthening of State Investment Promotion Agencies/One Stop Investment Center.
- Development/compilation and publication of investment incentives available at national and sub-national level.
- Strengthening of engagements between the Investment Promotion Agencies and other stakeholders particularly other relevant MDAs of government and private companies/MSMEs.
- Development, publication and marketing of investment opportunities and enabling reforms by the state.
- Peer learning with regional, national and sub-national IPAs.
SEDIN is working with state partners to stimulate economic activities in key sectors, enhance growth and create jobs. To achieve this, SEDIN is working with state partners to develop relevant policies and strategies to stimulate growth. Key sectors where SEDIN is currently supporting policy development with clear strategies and implementation plans include agriculture, ICT, Shea butter and cosmetic, industrial/cluster development, plastic waste management among others. Under this support, Agriculture policy has been developed in Plateau (adopted), Ogun and Edo States; Shea Policy in Niger (adopted); ICT Policy in Plateau, MSMEs Policy in Niger, Plateau and Edo among others.
Additionally, the programme is supporting the development of employment promotion policy and strategies as well as supporting the establishment of institutional framework for employment promotion. Under this support, Plateau State recently inaugurated an inter-ministerial and multi-sectoral State Employment Council, developed and adopted a state employment strategy 2022 -2025.
For SEDIN, gender mainstreaming is an important strategy to improve the quality of public policies, programmes and projects, ensuring a more efficient allocation of resources. Better results mean increased well-being for both women and men, and the creation of a more socially just and sustainable society. In line with Sustainable Development Goal (SDG) 5, SEDIN has a strong commitment to ensure gender is mainstreamed not only into its directly supported interventions but also to ensure this is institutionalized within partners’ organizational structures, policies and programmes. In line with this commitment, SEDIN is supporting partner states to develop state gender policies and build capacity for gender mainstreaming and monitoring. In 2015, SEDIN actively supported the passage of Gender and Equal Opportunities Law in Plateau State and has since then been working with state partners to implement the Law.
Similarly, SEDIN is supporting the development and adoption of state gender policy and strategy in Niger (already adopted), Edo and Ogun. SEDIN is also supporting the appointment of gender focal persons (GFPs) for key MDAs and local governments and their training in partner states. Under the business enabling environment and policy reform interventions, priority is given to addressing women-specific constraints to doing business and developed policies have specific provisions and strategies to ensure gender inclusion.