Equatorial Guinea Just Proved Why Other African Countries Need to Step Up Their Business Game
A couple of years ago, it could take up to 24 weeks for average company registration in one of Africa’s sub-Sahara’s biggest oil producers-Equatorial Guinea. This process includes engagement planning, company incorporation, bank account approval, internet banking approval, and engagement.
However, the narrative recently took a new turn when the Equatorial Guinea Government decided to mend an ‘ancient way’ by announcing a one-stop shop for business incorporation– an initiative which makes it possible for investors and corporations to launch their businesses in the country in seven days. Without doubts, this step is obviously a sign that Equatorial Guinea’s government is listening to it to international investors’ as well as local business persons’ concerns over the country’s agelong stringent regulations that have prevented it from exploiting its full investment potential over the past few years.
One-stop shop solutions allow businesses to deal with all permits and processes required to set up a business at a single counter, hence reducing bureaucracy and eliminating red tape.
The one-stop shop will also provide suitable information support for future entrepreneurs and enable them to start with business operations in the shortest time possible.
Noteworthy is the fact that, this model has been gradually implemented across some countries in the world and Africa, resulting in increased local and foreign investments, and promoting small and medium enterprises (SMEs) growth.
Equatorial Guinea’s recent initiative is expected to be very positive for businesses and put the country at par with its regional and global competitors. It further signals the country’s political will to reform and echoes President Obiang Nguema Mbasogo’s commitment to see the National Economic Development Plan: Horizon 2020 is fully implemented.
Speaking on this, Santiago Olo Lima, Director for Equatorial Guinea at Centurion is of the view that One- Stop Shop is a welcomed and timely idea as the country expects a pool of investments this year and beyond which will enhance the country’s economy.
“Our clients are excited about this. As a firm, we work to encourage investment in the country, ensure investors can have a seamless transition and operate well. The one-stop shop is a welcome and timely development as Equatorial Guinea expects billions of investments during its Year of Energy 2019 and is a crucial step towards achieving the country’s economic diversification and poverty reduction goals under its National Economic Development Plan: Horizon 2020,” says Santiago Olo Lima.
Coming to Africa
While Equatorial Guinea’s new move signals a huge boon to businesses, a thought comes to mind; why wait so long to actualise this reality? Done years ago, the country may have perhaps become a destination of choice for many foreign investors and a pacesetter to other African countries. Although it’s not too late, the question remains whether or not other African countries clogging their business operations with bureaucracy would follow suit.
The Nigerian Experience
For many years, registering your new business in Nigeria would almost discourage you from starting. Although the process is improving, it still takes as long as two weeks or even more, to get the Corporate Affairs Commission (CAC) sign you off as a legitimate business.
Then, you have to battle with the process of getting Tax Identification Number (TIN) for business even proves more daunting. A business has to be under operation for about 6 months before applying. Ordinarily, one would have thought the TIN should be given instantly or at most by the next day, however, it is not obtainable, it appears that a number of the Federal Inland Revenue Service (FIRS) offices are struggling with backlogs, and so it is not unusual for the process to drag on for about a week or in some instances two weeks before it could get to the applicant.
All of this unnecessary bureaucracy is discourages enough for indigenous, and would definitely truncate the interest of foreign ones.
What Can be done?
“The fewer interactions an entrepreneur has to have with agencies, the less running from office to office they have to do, the easier and faster it is to get their business off the ground,” says Sylvia Solf, lead author for the World Bank’s 2012 Doing Business study.
For a nation like Equatorial Guinea to have stepped up the game in these areas, replication should n’t pose a challenge for Nigeria and other African countries.
A practical approach would be to set up an electronic filing system for commercial and civil courts and merge the company, tax, social security, and employment fund registration into a one-stop process.
Should this be in place, it will not only save the time consumed in bringing businesses to life but also give foreigners eyeing Africa as an investment destination a rest of mind.