Yesterday, three newly established businesses on Rumens road, Ikoyi, Lagos state, were demolished allegedly with only a moment’s notice. For a second, the bulldozer and police officers armed with machine guns may have led one to think that the Lagos government had come to destroy a criminal hideout but alas, they were only destroying the buildings of legitimate businesses.

The buildings demolished, Nuli juice company, the Drug store, and Cakes and Nuts, all located along number 7-12 Rumens road, were all small businesses that had only been set up recently. The buildings were destroyed with reckless abandon, one that highlights why Nigeria is ranked 169th out f 189 countries in the World bank’s Ease of doing business ranking. The Ease of doing business index ranks countries against each other based on how the regulatory environment is conducive to business operations and stronger protections of property rights.

The demolition took place despite the residents claiming to have paid rent and required government levies. Looking at the provisions of the law, The Lagos State Urban and Regional Planning and Development Law 2010 requires that notices should be served on illegal structures and occupants alike – including a 2-Day Contravention Notice, a 7-Day Demolition Notice and then demolition and removal within two days.

Although the government said the landlord was given prior notice, Ada Osakwe, the owner of Nuli Juice said the tenants weren’t given any form of notice and that they weren’t informed the building was under distress as required by law. Even though there are contradictory testimonies as to whether or not the tenants got a notice, the government is expected to act with expediency in such circumstances given the extreme economic hardship presently.

What happened to relatively milder measures like sealing off the stores till the matter is resolved? What happened to constructive dialogue? At a time when unemployment figures have risen for seven consecutive quarters – leaving over 10 million people in the working population jobless – and GDP growth falling to record levels at negative 2.06 percent, the government is expected to value and support employers of labour, especially small and medium scale businesses. Unless of course the government really believes that recession is just a word.

When it comes to property registration, Nigeria ranks 181 out of 189 and this is because the process is nothing short of hectic from fighting to get a certificate of ownership (if applicable) to the snail paced bureaucratic process in getting your business or company registered. The most populous African country also ranks low in enforcing contracts, resolving insolvency, trading across borders, getting electricity and of course starting a business. It is therefore beyond comprehension that businesses, which have overcome such obstacles to become taxpayers and employers of labour, are reduced to rubble with little or no notice.

While in Nairobi, Kenya on Sunday, President Buhari stated that Nigeria aims to move at least 70 places up the index by 2019 into the top 100 countries for doing business. But if some of these policies are anything to go by, that ambition may remain exactly that come 2019 – an ambition.

In addition to the abrupt demolition of business properties, the controls on capital flows and imports, abrupt decision to halt operations of money transfer operators, and the continued delay in paying funds owed to businesses, all contradict with Mr. president’s vision. Only time will tell whether the president has only been paying lip service to the cause.

Small and medium enterprises (SME’s) have a non trivial role to play in providing employment in the country. These companies comprise almost 50% of the workforce in some advanced nations and holds the key to alleviating the nations unemployment predicament. They should therefore be nurtured and encouraged, not treated like criminals as they go about an honest day’s work. Actions like this only contribute to an already unfriendly business environment characterised by higher import costs, transportation costs, poor power supply and importantly contradicts the governments push to encourage entrepreneurship.

Elsewhere on Ventures

Triangle arrow