Nigeria ranks among world’s most complex markets

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Nigeria has been placed among the countries with the highest complexity in market, operational, and regulatory, according to a 2019 Global Markets Complexity Index (GMCI) report.

The GMCI report was developed by Wilson Perumal & Company, a leading international management consulting firm in partnership with the Wall Street Journal, a U.S. business-focused, English-language international daily newspaper based in New York City.

Other countries listed in the report are Bangladesh, Mali, Pakistan, Togo and Zimbabwe

The GMCI report assessed 83 countries across 31 measures of market, operational, and regulatory complexity, and places them into eight country groups with distinct complexity profiles.

Nigeria, Zimbabwe, Pakistan, Bangladesh, Mali and Zimbabwe were categorised in the eighth group called “Only the Brave” where they had a low score of 0-39, which indicates a high degree of complexity in market, operational, and regulatory processes.

“‘Only the Brave’ includes the most complex countries in the world. These countries have the highest market, operational, and regulatory complexity in the GMCI. However, this complexity is better characterized as growing pains than a terminal illness,” the report stated.

The report further stated that some of these countries are simply in a rapid development phase, with quickly changing regulatory environments, consumer preferences, and operational challenges and over time, they will likely gain control over this complexity and improve the business environment.

The scores on a scale from 1 to 100, shows where 1 represents the most complex country and a score of 100 represents the least complex country

Nigeria ranked in 76th, 78th and 80th in market complexity, operational complexity and regulatory complexity, respectively.

Vivian Alozie, an equity research analyst at Capital Bancorp plc said that there are a lot of regulations that are preventing companies in Nigeria from reaching their potentials and also gaining access to the resources that they require to scale up.

“For example on the Nigerian Stock Exchange (NSE), the listing requirements for companies are cumbersome and it is still an obstruction for companies that may wish to get listed and tap into the wealth,” Alozie said.

For example our manufacturing sector is still struggling to attract Foreign Direct Investments (FDI), which is one of the economic bedrock for development. And we need more FDI to allow other sectors of the economy to grow,” Alozie said to Businessday in a telephone interview

Ibrahim Tajudeen, head research, Chapel Hill of Denham, in his own opinion, said the regulatory processes was a major factor and that we need to improve on our regulatory processes of doing business in this country.

“And this applies to not only new but also existing businesses. For you to attract more foreign investments you need accommodating regulatory processes. For example the process of registering a business is long and stressful and this can make someone not to register a business at all,” Tajudeen said.

According to the World Bank Ease of Doing Business ranking for 2018, Nigeria ranked 146 out of 190 countries in 2018, dropping by a spot from its 145th position in 2017.

The GMCI report provides additional hint in helping to answer that question for investors and corporates trying to find their way in less-developed markets where size and market potential isn’t as simple as it looks on paper.


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