Entrepreneurship is often hailed as the silver bullet for youth unemployment, particularly in developing countries like Nigeria. While the conversation usually revolves around financial barriers, there is an equally potent but often overlooked hurdle: the volatile policy environment.
Government policies can both propel and impede economic growth. Unfortunately, in Nigeria, abrupt shifts in policy is more of a hindrance than a help.
In this episode of our Voice of Reasoning, our guest writer argued that though the government is quick to pump money out to support small businesses, what entrepreneurs need most is staple and friendly policies.
Here are what we you should know:
- Unpredictable policies are particularly detrimental to entrepreneurs, who already face a myriad of challenges when starting businesses. The Global Entrepreneurship Monitor (GEM) indicates that countries with stable policy environments see higher rates of new business creation. Unfortunately, the reverse is true for countries like Nigeria with fluctuating policy climates.
- To register a company, the Corporate Affairs Commission requires a Tax Identification Number, signalling to the young entrepreneurs that they have to deal with multiple taxes and levies from different levels of government.
- According to the World Bank’s Ease of Doing Business Index, Nigeria ranked 131 out of 190 countries, a score reflective of the intricate web of bureaucratic and policy challenges entrepreneurs must navigate to conduct business in the country.
- Countries like Singapore and New Zealand, which top the Ease of Doing Business Index, offer valuable lessons on how coherent, stable policies can stimulate entrepreneurial activity. According to the World Doing Business Report, these countries are the easiest places in the world to do business, and they have topped the list for several years.
- Singapore has a pro-business environment with low tax rates and a stable political climate. The government implemented policies that encourage entrepreneurship and innovation. And New Zealand has a transparent and efficient regulatory environment that makes it easy to start and run a business. The country also has a strong intellectual property protection regime.
Want to delve deeper, read the full piece here.
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