REVERSING THE DOWNWARD RATING OF NIGERIA BY INTERNATIONAL ORGANISATIONS

One of the yardsticks usually considered by investors before making investment decisions in the reports by credible and reliable international organizations. Whether the reports are good or there are bad, they are always people affected by them. The bottom of the barrel in this case is that over the years, Nigeria had been taking not-too-encouraging positions in global ratings. Some years ago, when Transparency International rated Nigeria as the third most corrupt country in the world, I remember one question I asked then! The question was, “What is the implication of such rating on Nigeria?” Honestly, I got many answers, but the answer I will indicate here was the analytical one given by a senior colleague. He said, the implication on Nigeria was that it will discourage genuine foreign investors, especially those who want to do clean business in Nigeria. But, I prodded more, by

reminding him that mere paper reports cannot really dissuade any investor who has done his cost-benefit-analysis from going ahead with his investment plan in any country. He replied, “If you think perception is sometimes not treated as reality, then try Somalia” He added. “Any investor who has heard all the negative reports about Somalia, and still decides to invest in Somalia, such investor must be a Somalia-Like investor”! However, according to World Bank Ease of Doing Business Assessment Chart, which I sourced through Daily Independent Newspaper of Wednesday, October 24, 2012, p.1&2, out of the 185 economies assessed, Nigeria was ranked 131, while South Africa, our closest economic rival in the continent was ranked 39th. Nigeria's position this year is better than it was two years ago, when she took 133rd position. In the area of getting credit, Nigeria moved from 38th position to 23rd position, while in the area of paying taxes, Nigeria

goofed as it fell from 139th position to 155th position. Also, in the area of getting electricity, Nigeria dropped from 177th to 178th position, in the area of enforcing contracts, Nigeria dropped from 97th to 98th position, while in the area of protecting investors, Nigeria dropped from 66th to 70th position, and lastly, in the area of resolving insolvency, Nigeria also dropped from 104th to 105th position in the world. The world's most improved country on the ease of doing business is Poland, because of her four institutional reforms making it easier for the registering of properties, paying taxes, enforcing contracts and resolving insolvency. Similarly, the giant of Africa got poor rating in this year's Ibrahim Index of African Governance published by the Mo Ibrahim Foundation. Nigeria got discouraging ratings in the area of human rights, political freedom, transparency and accountability. Out of the 16 countries in West Africa, Nigeria took the

14th position, and out of the listed 52 countries in Africa, Nigeria took the 43rd position. However, Nigeria is not alone in this year's poor performance, because the four socio-economic and political power houses representing the four cardinal points of Africa also got the bashing of the Mo Ibrahim Foundation. The countries that were rated low in the area of safety and rule of law, and participation and human rights are; Egypt in the North, South Africa in the South, Nigeria in the West and Kenya in the East. Nonetheless, all is not doom and gloom for Nigeria as some persons would like to portray us in the media. This is because; Nigeria is now the 39th largest economy in the world, moving from the previous 44th position. According to the Bankers Magazine, 8 Nigeria banks are among the list of the 25 top African Banks. Furthermore, an international rating agency, Standards & Poors (S&P), in its long-term foreign and local currency sovereign credit

rating, upgraded Nigeria to “BB-“ this came on the heels when South Africa, the largest economy in Africa was downgraded to a “BBB” rating with a negative outlook. The Standards & Poors hinged its decision on South Africa on the mining strikes and social tensions which it said could reduce fiscal flexibility and hurt the growth of the country's economy. While Nigeria is not on the same page with South Africa, the Standards & Poors in rating Nigeria said: “Nigeria's fiscal assets in its excess crude account have risen to about $8.4 billion in October 2012, which provides a reasonable fiscal buffer… The government has sustained reform momentum in key areas, including cutting the fuel subsidy and reforming the power sector, and the authorities have restructured and strengthen the previously troubled banking sector. We are therefore raising our long-term foreign-and local-currency sovereign credit ratings on Nigeria by one notch to

'BB-'”. Finally, the government of the day should not rest on its oars until the lost glory of Nigeria is regained! Comrade Edwin Ekene is the National President of Young Nigerians for Change.No.29, Ben Mbamalu Crescent, Achara Layout, Enugu State.07065862479, [email protected]

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Articles by Edwin Uhara