Doing Business 2019 Nigeria Economy Profile Nigeria Page 1 Doing Business 2019 Nigeria Economy Profile of Nigeria Doing Business 2019 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction permits Procedures, time and cost to complete all formalities to build a warehouse and the quality control and safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, and the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time, total tax and contribution rate for a firm to comply with all tax regulations as well as post-filing processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Labor market regulation Flexibility in employment regulation and aspects of job quality Page 2 Doing Business 2019 Nigeria About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local firms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business offers detailed subnational reports, which exhaustively cover business regulation and reform in different cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The first Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has benefited from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. More about Doing Business (PDF, 5MB) Page 3 Doing Business 2019 Nigeria Ease of Doing Business in DB 2019 Rank Region Sub-Saharan Africa 190 1 Nigeria Income Category Lower middle income 146 DB 2019 Ease of doing business score Population 190,886,311 0 100 City Covered Lagos, Kano 52.89 DB 2019 Ease of Doing Business Score 0 100 82.65: United Kingdom (Rank: 9) 70.31: Kenya (Rank: 61) 66.03: South Africa (Rank: 82) 52.89: Nigeria (Rank: 146) 51.61: Regional Average (Sub-Saharan Africa) Note: The ease of doing business score captures the gap of each economy from the best regulatory performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s ease of doing business score is reflected on a scale from 0 to 100, where 0 represents the lowest and 100 represents the best performance. The ease of doing business ranking ranges from 1 to 190. Rankings on Doing Business topics - Nigeria 1 12 28 38 55 82 92 Rank 109 120 136 149 149 157 163 171 184 182 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Ease of Doing Business Score on Doing Business topics - Nigeria 100 82.97 85.00 80 66.67 57.84 57.90 Score 60 53.53 42.63 40 28.89 30.42 23.08 20 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Page 4 Doing Business 2019 Nigeria Starting a Business This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and formally operate To make the data comparable across economies, several assumptions about the a company (number) business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes. • Preregistration (for example, name verification or reservation, notarization) The business: • Registration in the economy’s largest business - Is a limited liability company (or its legal equivalent). If there is more than one type city of limited liability company in the economy, the most common among domestic firms • Postregistration (for example, social security is chosen. Information on the most common form is obtained from incorporation registration, company seal) lawyers or the statistical office. - Operates in the economy’s largest business city. For 11 economies the data are • Obtaining approval from spouse to start a business or to leave the home to register the also collected for the second largest business city. company - The entire office space is approximately 929 square meters (10,000 square feet). - Is 100% domestically owned and has five owners, none of whom is a legal entity; • Obtaining any gender specific document for has a start-up capital of 10 times income per capita and has a turnover of at least company registration and operation or national 100 times income per capita. identification card - Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does not perform foreign trade Time required to complete each procedure activities and does not handle products subject to a special tax regime, for example, (calendar days) liquor or tobacco. It does not use heavily polluting production processes. • Does not include time spent gathering - Leases the commercial plant or offices and is not a proprietor of real estate and the information amount of the annual lease for the office space is equivalent to the income per capita. • Each procedure starts on a separate day (2 procedures cannot start on the same day) - Does not qualify for investment incentives or any special benefits. - Has at least 10 and up to 50 employees one month after the commencement of • Procedures fully completed online are recorded operations, all of whom are domestic nationals. as ½ day - Has a company deed that is 10 pages long. • Procedure is considered completed once final document is received The owners: • No prior contact with officials - Have reached the legal age of majority. If there is no legal age of majority, they are assumed to be 30 years old. Cost required to complete each procedure (% of - Are sane, competent, in good health and have no criminal record. income per capita) - Are married and the marriage is monogamous and registered with the authorities. - Where the answer differs according to the legal system applicable to the woman or • Official costs only, no bribes man in question (as may be the case in economies where there is legal plurality), the • No professional fees unless services required by answer used will be the one that applies to the majority of the population. law or commonly used in practice Paid-in minimum capital (% of income per capita) • Funds deposited in a bank or with third party before registration or up to 3 months after incorporation Page 5 Doing Business 2019 Nigeria Starting a Business - Lagos Standardized Company Legal form Private Limited Liability Company Paid-in minimum capital requirement NGN 0 City Covered Lagos Indicator Lagos Sub-Saharan OECD high Best Regulatory Africa income Performance Procedure – Men (number) 8 7.4 4.9 1 (New Zealand) Time – Men (days) 10 23.3 9.3 0.5 (New Zealand) Cost – Men (% of income per capita) 27.6 44.4 3.1 0.0 (Slovenia) Procedure – Women (number) 8 7.6 4.9 1 (New Zealand) Time – Women (days) 10 23.4 9.3 0.5 (New Zealand) Cost – Women (% of income per capita) 27.6 44.4 3.1 0.0 (Slovenia) Paid-in min. capital (% of income per capita) 0.0 10.0 8.6 0.0 (117 Economies) Figure – Starting a Business in Lagos and comparator economies – Ranking and Score DB 2019 Starting a Business Score 0 100 94.58: United Kingdom (Rank: 19) 83.87: Lagos 82.41: Kenya (Rank: 126) 81.22: South Africa (Rank: 134) 79.94: Kano Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. Page 6 Doing Business 2019 Nigeria Figure – Starting a Business in Lagos – Procedure, Time and Cost Time (days) Cost (% of income per capita) 10 18 16 Cost (% of income per capita) 8 14 12 Time (days) 6 10 8 4 6 4 2 2 0 0 1 2 3 4 5 6 7 *8 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Page 7 Doing Business 2019 Nigeria Details – Starting a Business in Lagos – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Reserve a unique company name 1 day NGN 500 reservation Agency : Corporate Affairs Commission fee The Corporate Affairs Commission (CAC) online system was launched on February 2nd, 2015. This platform enables online unique name reservation as well as enabling filing the incorporation forms for the entire registration process. As of March 2017, the process of reserving the company name can only be made online at: http://services.cac.gov.ng/. 2 Prepare the requisite incorporation documents and pay the stamp duty 1 day 0.75% stamp duty Agency : FIRS e-stamping portal paid on share capital As of 2016, the possibility of e-stamping became available. As such, companies + NGN 500 for each can complete the stamping online. additional copy of Memorandum and To prepare the requisite incorporation documents, the business founders must Articles of complete the statutory forms, prepare and print the memorandum and articles of association, and have them stamped by the Federal Inland Revenue Service Association stamped (FIRS) or online. (2 copies) The stamp duty payable on share capital (ad valorem) is 0.75% and NGN 500 for each additional copy of Memorandum and Articles of Association stamped. 3 Sign the declaration of compliance before a Commissioner for Oaths or a 1 day NGN 500 at the court Notary Public or NGN 4,000 - NGN Agency : Notary Public or Commissioner of Oaths 5,000 with a Notary The declaration by the barrister or solicitor engaged in the formation of the Public company may be sworn to before a Notary Public for a fee of NGN 4,000 - NGN 5,000 or at any of the recognized courts in the country (Magistrate Court, the State High Court, or the Federal High Court) before a Commissioner for Oaths for a small fee of NGN 500 usually chargeable by the respective courts. Entrepreneurs can also use the services of a CAC appointed lawyer. 4 Register the company at the Corporate Affairs Commission and pay 3 days see procedure details registration fees Agency : Corporate Affairs Commission As of May 2017, companies now apply for company incorporation using form CAC 1.1. This new form replaced form CAC 4: Declaration of compliance, form CAC 2: Statement of share capital and return of allotment of shares, form CAC 7: Particulars of directors, and form CAC 2.1: Particulars of the company secretary. The registration is now done entirely online. Entrepreneurs need to submit the following documentation to register the company: (a) two copies of the stamped consolidated form (CAC Form 1.1); (b) two copies of the stamped memorandum and articles of association of the company; (c) form of identification of the directors and shareholders (drivers license or national ID or data page of international passport); (d) Form of identification of the company secretary; (e) Copy of name reservation of the company. The documents are uploaded via the platform docupload.cac.gov.ng. Incorporation fees are: • Registration of private company/Increase in Share Capital above NGN 1 million and up to NGN 500 million: NGN 5,000.00 for every NGN 1 million share capital or part thereof; • NGN 3,000 for certified true copy of memorandum and articles of association. • NGN 2,000 for certified true copy of form CAC 1.1 Lawyers are usually hired to undertake the administrative incorporation procedures. On average, a lawyer will charge NGN 60,000 to handle the entire incorporation process in this state. The payment of statutory filing fees can now be processed online through Remita, an electronic payment platform. Upon making relevant payments online. 5 Make a company seal 1 day NGN 4,000 - NGN Agency : Sealmaker 6,000 Section 74 of the Companies and Allied Matters Act (CAMA) requires every company to have a common seal. Page 8 Doing Business 2019 Nigeria 6 Register for income tax and VAT 1 day no charge Agency : Federal Inland Revenue Service The Federal Inland Revenue Service (FIRS) requires the applicant to complete tax registration forms for corporate income tax registration as well as VAT. The registration process requires submitting a completed tax office–issued application (taxpayer registration input form, TRIF/2006/001 COYS) and the following documents: • Completed FIRS questionnaire. • Memorandum and articles of association (copy). • Certificate of incorporation (copy). • Directors’ names and addresses. • Tax advisor’s name and address. • Letter of appointment of a tax adviser and corresponding letter of acceptance. • The date the company commenced business; • Names, addresses and mobile numbers of major promoters and the chairman of the company, including their email addresses; • Other sources of income of the chairman and the promoters of the company; • Name and addresses of the principal officers of the company including the chairman, managing director, legal adviser and accountant; To register, the company must submit the taxpayer registration input form in duplicate, and the original certificate of incorporation must be presented for review by the controller. Upon the completed taxpayer registration input form and all other documents being received, a tax reference number is allocated. 7 Register for personal income tax PAYE 2 days no charge Agency : State Tax Office All employers shall register with the relevant state tax authority for income tax withholding. The PAYE Regulations of 2003 made pursuant to the Personal Income Tax Act provides that all employers are to register with the Lagos State Board of Internal Revenue Tax Office nearest to the registered company address for the purpose of remitting income tax deducted from their employees. The employer must within 6 months of commencing a business deduct tax from emoluments of employees and remit the amount deducted to any of the designated collecting banks. The registration requirements are as follows: 1. A copy of certificate of incorporation. 2. List of staff and their annual salaries. 3. Letter of application for registration. 4. Corporate income tax and VAT tax reference number. Upon completion of registration, an Employer's Identification Number will be issued. An employer who fails or refuses to register commits an offence and is liable on conviction to pay a NGN 25,000 fine in addition to the payment of arrears of the tax due. 8 Register business premises with the Lagos State Government and pay the 1 day (simultaneous NGN 10,000 business premises levy with previous Agency : Bank procedure) To register the company premises with the Lagos State Government, the entrepreneur heads to any nationalized commercial bank with some evidence of the business premises (utility bills, etc.) and pays the business premise levy to the account of the Lagos Inland Revenue Services (LIRS). The bank then issues a receipt bearing the Lagos State Government logo. Business premises in an urban area of Nigeria are required to be registered on the payment of a NGN 10,000 registration fee in the first year of registration (NGN 5,000 per annum as renewal registration fees in the subsequent years). For rural areas, the business premises registration fees is NGN 2,000 for the first year of registration (NGN 1,000 per annum as registration renewal fees for the subsequently years). Takes place simultaneously with previous procedure. Page 9 Doing Business 2019 Nigeria Starting a Business - Kano Standardized Company Legal form Private Limited Liability Company Paid-in minimum capital requirement NGN 0 City Covered Kano Indicator Kano Sub-Saharan OECD high Best Regulatory Africa income Performance Procedure – Men (number) 10 7.4 4.9 1 (New Zealand) Time – Men (days) 14 23.3 9.3 0.5 (New Zealand) Cost – Men (% of income per capita) 27.5 44.4 3.1 0.0 (Slovenia) Procedure – Women (number) 10 7.6 4.9 1 (New Zealand) Time – Women (days) 14 23.4 9.3 0.5 (New Zealand) Cost – Women (% of income per capita) 27.5 44.4 3.1 0.0 (Slovenia) Paid-in min. capital (% of income per capita) 0.0 10.0 8.6 0.0 (117 Economies) Figure – Starting a Business in Kano and comparator economies – Ranking and Score DB 2019 Starting a Business Score 0 100 94.58: United Kingdom (Rank: 19) 83.87: Lagos 82.41: Kenya (Rank: 126) 81.22: South Africa (Rank: 134) 79.94: Kano Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. Page 10 Doing Business 2019 Nigeria Figure – Starting a Business in Kano – Procedure, Time and Cost Time (days) Cost (% of income per capita) 14 18 16 12 Cost (% of income per capita) 14 10 12 Time (days) 8 10 6 8 6 4 4 2 2 0 0 1 2 3 4 5 6 7 *8 9 10 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Page 11 Doing Business 2019 Nigeria Details – Starting a Business in Kano – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Reserve a unique company name 1 day NGN 500 reservation Agency : Corporate Affairs Commission fee The Corporate Affairs Commission online system allows for online search of unique company names upon the purchase of an e-payment card for a flat fee of NGN 500 from an accredited bank. As of March 2017, the process of reserving the company name can only be made online at: http://services.cac.gov.ng/. The company’s name reservation lasts 60 days but can be renewed for a similar period. 2 Prepare the requisite incorporation documents and pay the stamp duty 1 day Stamp duty at 0.75% Agency : Stamp duty office of share capital + As of 2016, the possibility of e-stamping became available. As such, companies NGN 1,000 for can complete the stamping online. stamping of two extra copies of This procedure involves the following tasks: memorandum and a. Preparing and printing the memorandum and articles of association; b. Completing the requisite statutory forms; articles of association c. Having the memorandum and articles of association stamped by the Federal (NGN 500 each) Inland Revenue Service or online. There is a stamp duty office on the same premises as the CAC. 3 Sign the declaration of compliance before a Commissioner for Oaths or 1 day NGN 50 notary public Agency : State High Court A declaration must be sworn by: (i) a barrister or solicitor engaged in the formation of the company or (ii) a person named in the memorandum and articles of association as a director or secretary of the company. This procedure can be done before a notary public or filed at the State or Federal High Court. The common practice is for this declaration to be sworn before a Commissioner of Oaths at the State High Court. 4 Register the company at the Corporate Affairs Commission 3 days see procedure details Agency : Corporate Affairs Commission As of May 2017, companies now apply for company incorporation using form CAC 1.1. This new form replaced form CAC 4: Declaration of compliance, form CAC 2: Statement of share capital and return of allotment of shares, form CAC 7: Particulars of directors, and form CAC 2.1: Particulars of the company secretary. Entrepreneurs need to submit the following documentation to register the company: (a) two copies of the stamped consolidated form (CAC Form 1.1); (b) two copies of the stamped memorandum and articles of association of the company; (c) form of identification of the directors and shareholders (drivers license or national ID or data page of international passport); (d) Form of identification of the company secretary; (e) Copy of name reservation of the company. Incorporation fees are: • Registration of private company/Increase in Share Capital above NGN 1 million and up to NGN 500 million: NGN 5,000.00 for every NGN 1 million share capital or part thereof; • NGN 3,000 for certified true copy of memorandum and articles of association. • NGN 2,000 for certified true copy of form CAC 1.1 5 Make a company seal 1 day NGN 5,000 Agency : Private company Section 74 of the Companies and Allied Matters Act (CAMA) requires every company to have a common seal. It is also common in practice, especially because companies will generally have to register a deed or other official documents. Page 12 Doing Business 2019 Nigeria 6 Register for income tax and VAT 1 day no charge Agency : Federal Inland Revenue Service Entrepreneurs can register for both corporate income tax and VAT at the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Service (FIRS) will require the applicant to complete tax registration forms. The new company registers at the nearest Federal Tax Office. A form obtained from the tax office is filled and the following documents submitted with it: a. Taxpayer registration input form (TRIF/2006/001 COYS); b. Completed FIRS questionnaire; c. Copy of memorandum and articles of association; d. Names and addresses of directors; e. Copy of the certificate of incorporation; f. Name, address of tax adviser; g. Letter of appointment of tax adviser and a letter of acceptance; h. The date the company commenced business; i. Names, addresses and mobile numbers of major promoters and the chairman of the company, including their email addresses; j. Other sources of income of the chairman and the promoters of the company; k. Name and addresses of the principal officers of the company including the chairman, managing director, legal adviser and accountant. The application forms must be in triplicate and the original certificate of incorporation must be presented for 'sighting' by the controller before registration can be completed. Upon receipt of the completed taxpayer registration input form and all documents, a tax reference number is allocated. The fees for the tax clearance issuance are as follows: (i) for newly registered companies within 6 months of incorporation: no fee; (ii) for companies that are yet to commence business and show up for registration after 6 months of incorporation, if they request for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first time and NGN 20,000 is payable for subsequent years until it files a notice of commencement of business. Companies required to register for VAT complete the VAT registration form (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the integrated tax office, which will issue a taxpayer identification number (TIN). Companies required to register for VAT must do so within 6 months from the date of company incorporation. Since the registration for corporate income tax and VAT are done in the same place, one Tax Identification Number (TIN) is issued to companies for all federal taxes. 7 Register for personal income tax PAYE 2 days no charge Agency : State Tax Office The employers in the newly incorporated company are required to register with the relevant state tax authority for the purposes of deducting income tax from employees. Once an application is filed with a copy of the certificate of incorporation attached, a reference file is then opened for the company. There is no cost related to this registration. 8 Receive an inspection from the State Ministry of Commerce, Industry, 1 day (simultaneous no charge Cooperatives and Tourism for business premises registration with previous Agency : State Ministry of Commerce, Industry, Cooperatives and Tourism procedure) After the submission of all application documents, an inspection of the business premises is carried out by an officer from the State Ministry of Commerce, Industry, Cooperatives and Tourism. 9 Pay registration fees for business premises into a government account at a 1 day NGN 10,000 designated bank Agency : Designated bank Fees for the business premises permit are paid into a government account at a designated bank. The fees depend on the type of activity, category of business (limited liability company, partnership or sole proprietorship), size of the business, and its location. The annual renewal fee is the same as initial registration. 10 Obtain a business premises permit 3 days no charge Agency : State Ministry of Commerce, Industry, Cooperatives and Tourism Following payment of the assessed registration fees for business premises permit into a designated government account, the State Ministry of Commerce, Industry, Cooperatives and Tourism issues a business premises permit to the new business. Takes place simultaneously with previous procedure. Page 13 Doing Business 2019 Nigeria Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of data collection was completed in May 2018. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse To make the data comparable across economies, several assumptions about the (number) construction company, the warehouse project and the utility connections are used. • Submitting all relevant documents and obtaining The construction company (BuildCo): all necessary clearances, licenses, permits and certificates - Is a limited liability company (or its legal equivalent) and operates in the economy’s largest business city. For 11 economies the data are also collected for the second • Submitting all required notifications and receiving largest business city. all necessary inspections - Is 100% domestically and privately owned; has five owners, none of whom is a • Obtaining utility connections for water and legal entity. Has a licensed architect and a licensed engineer, both registered with sewerage the local association of architects or engineers. BuildCo is not assumed to have any other employees who are technical or licensed experts, such as geological or • Registering and selling the warehouse after its completion topographical experts. - Owns the land on which the warehouse will be built and will sell the warehouse Time required to complete each procedure upon its completion. (calendar days) The warehouse: • Does not include time spent gathering information - Will be used for general storage activities, such as storage of books or stationery. - Will have two stories, both above ground, with a total constructed area of • Each procedure starts on a separate day— approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 though procedures that can be fully completed meters (9 feet, 10 inches) high and will be located on a land plot of approximately online are an exception to this rule 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the • Procedure is considered completed once final warehouse is valued at 50 times income per capita. document is received - Will have complete architectural and technical plans prepared by a licensed architect. If preparation of the plans requires such steps as obtaining further • No prior contact with officials documentation or getting prior approvals from external agencies, these are counted Cost required to complete each procedure (% of as procedures. income per capita) - Will take 30 weeks to construct (excluding all delays due to administrative and regulatory requirements). • Official costs only, no bribes The water and sewerage connections: Building quality control index (0-15) - Will be 150 meters (492 feet) from the existing water source and sewer tap. If there • Quality of building regulations (0-2) is no water delivery infrastructure in the economy, a borehole will be dug. If there is • Quality control before construction (0-1) no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. • Quality control during construction (0-3) - Will have an average water use of 662 liters (175 gallons) a day and an average • Quality control after construction (0-3) wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300 • Liability and insurance regimes (0-2) gallons) a day. • Professional certifications (0-4) - Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Page 14 Doing Business 2019 Nigeria Dealing with Construction Permits - Lagos Standardized Warehouse Estimated value of warehouse NGN 29,142,359.20 City Covered Lagos Indicator Lagos Sub-Saharan OECD high Best Regulatory Africa income Performance Procedures (number) 17 14.7 12.7 None in 2017/18 Time (days) 118 145.7 153.1 None in 2017/18 Cost (% of warehouse value) 27.5 8.8 1.5 None in 2017/18 Building quality control index (0-15) 12.0 8.5 11.5 15.0 (3 Economies) Figure – Dealing with Construction Permits in Lagos and comparator economies – Ranking and Score DB 2019 Dealing with Construction Permits Score 0 100 80.29: United Kingdom (Rank: 17) 79.52: Kano 68.25: South Africa (Rank: 96) 63.49: Kenya (Rank: 128) 51.37: Lagos Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators. Figure – Dealing with Construction Permits in Lagos – Procedure, Time and Cost Time (days) Cost (% of warehouse value) 30 100 25 Cost (% of warehouse value) 80 20 Time (days) 60 15 40 10 20 5 0 0 1 *2 *3 4 5 6 7 8 9 10 11 12 13 14 15 16 * 17 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Page 15 Doing Business 2019 Nigeria Figure – Dealing with Construction Permits in Lagos and comparator economies – Measure of Quality 15 12.0 12.0 11.0 Index score 10 9.0 9.0 8.5 5 0 Lagos Kenya South Africa United Kingdom Kano Sub-Saharan Africa Details – Dealing with Construction Permits in Lagos – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Obtain soil investigation report 14 days NGN 100,000 Agency : Private Company A soil investigation report is done by an expert for the stability of the foundation. While according to Law No 3 (implemented in August 2012), only 3-storey (or more) residential or office buildings would need such a report, it would also be needed for a commercial warehouse. Furthermore, depending on the location, sometimes a 2-storey building might require a soil analysis report. 2 Obtain an Physical Planning Technical Report 7 days NGN 150,000 Agency : Town Planner Engineer This report is needed to check whether this project is viable, as well as the impact it will have on the immediate environment. All projects require this report, regardless of usage or height. 3 Obtain a certified true copy (CTC) of the survey plan and CTC of the land 3 days NGN 7,500 ownership title Agency : Land Registry A certified true copy of the survey plan must be obtained from the Land Registry to show the plot and its coordinates. Proof of ownership must also be obtained; otherwise the permit application will not be accepted. The sworn affidavit obtained previously must be presented to obtain the documents. But if the land has not been surveyed, then a private surveyor would have to conduct the survey of the plot of land and this survey would have to be registered with the Surveyor’s General Office. In that case, the survey would be verified against the master plan of Lagos. The black copy will be for BuildCo, the red copy will be registered with the Land Registry and a third copy will be kept at the Surveyor General Office. The cost of survey by a private surveyor can range from NGN 50,000 to NGN 100,000. Page 16 Doing Business 2019 Nigeria 4 Obtain development permit from the Lagos State Physical Planning Permit 42 days NGN 7,305,874 Authority (LASPPPA) Agency : State Physical Planning Permit Authority (LASPPPA) The development permit authorizes construction and is valid for 2 years. To obtain this permit, a building development plan outlining the intended uses of the proposed development on the site and its effect on adjacent developments and neighborhoods must be prepared by a professional. Once the development plan is received, along with the other required documentation, the survey plan is charted to determine whether the zoning requirements are met. An architect then reviews the architectural drawings. Legally, a pre-approval inspection is required to verify that the land is located where the owner has stated it is and to verify that construction has not already started. BuildCo does not have to be present during the visit. An assessment of the amount to be paid will be prepared after that visit. All the necessary bank accounts where each payment for each tax must be made must be listed on this letter of assessment. Once the site visit is completed, the structural, mechanical and electrical drawings are reviewed by engineers. The physical planning technical report is reviewed by the Physical Development Intervention Department who informs the town planner once the report is cleared. The entire file is then set to the relevant Recommending District Officer who reviews all the documentation and forwards the file to the Director of the Development Permits Department at headquarters. The file is then sent to the Director of Accounts to verify the payment, followed by the Lagos Internal Revenue Service to verify the tax clearance certificate. Lastly, it is sent to the General Manager for final approval. For buildings that are 3-4 stories, the Permanent Secretary must issue the final approval; for 5-6 stories the Honorable Commissioner; and for 7 stories or more, the Governor of Lagos. For construction involving a structure of more than two floors, the developer or owner must submit a general contractors’ all-risk insurance policy certificate to the Building Control Agency along with the application to commence building work. The Lagos State Physical Planning Authority (LASPPA) charges a contribution levy (10% of the building permit cost) for the preparation and production of development plans, such as local, district, subject, and action plans; development guides; office maintenance; procurement and maintenance of vehicles; office equipment; and similar issues. The following documents must be presented: • Proof of ownership • Survey plan – on sun print paper • 5 sets of architectural drawings • 5 sets of structural drawings (calculation sheets and supervision letter from a registered engineer) • 5 sets of mechanical and electrical drawings • 5 sets of sanitary and plumbing drawings • Current income tax clearance certificate (CIT) for 2 directors • Photocopy of payment of assessment fee • Certificate of incorporation of the company • Physical planning technical report. The cost is as follows: - Total assessment fee: NGN 120 per volume of the building assessment + NGN 5,000 registration fee + NGN 5,000 layout fees for charting + NGN 10,000 for first 650 sqm + 4,000 for additional 1,000 sqm per land area for fencing fee - 10% of total assessment fees Local Planning Office levy - 5% of the total assessment fees for Lagos State Emergency Management Agency (LASEMA) - NGN 20,000 for the 1st NGN 100,000 of total assessment; 10% of remaining total assessment + NGN 10,000 for Spatial Enhancement Fee - NGN 5,000 per square meters of the building for Infrastructure Development Charge (IDC) - 35% of the total assessment fee for certificate of fitness for habitation Page 17 Doing Business 2019 Nigeria 5 Obtain inspection of site by LASBCA for survey of set out 1 day no charge Agency : Lagos State Building Control Agency Once BuildCo is ready for construction, BuildCo sends a letter to the Lagos State Building Control Agency (LASBCA) providing details of the construction team professionals: licensed architect, construction engineer, and others. LASBCA then inspects the site to survey the set-out and to review the site plans and construction plan. LASBCA then provides the engineer the form C (application for certificate of completion and fitness for habitation). Subsequently, there are phased inspections at critical phases of construction. The civil structural engineer on BuildCo's team conducts inspections at the foundation and decking stages and signs the form C at each stage. The supervising engineer also submits the concrete for testing to either the Lagos State Materials Testing Laboratory or another private laboratory and maintains the certificate of the lab – these are given to the inspections team when they conduct their site visit. The Form C is also completed by the qualified builder registered with CORBON and qualified architect registered with ARCON, who sign off on the materials and workmanship. 6 Obtain certificate of structural stability (first pouring of concrete) 7 days NGN 35,000 Agency : Lagos State Material Testing Laboratory The concrete crushing test is done as follows: 1. A sample from a block of concrete is taken and brought back to the laboratory for testing. At this stage BuildCo pays for the entire testing. The testing is done at several stages: 2. 7 days after the sample is taken, the first result is obtained. 3. 14 days after the sample is taken, the second result is obtained (7 days after the first result). 4. 21 days after the sample is taken, the third result is obtained (7 days after the second result is delivered). 5. 28 days later the last and final result is obtained, as well as the final report. Normally the longer the concrete is kept, the harder it will become and therefore it will have a better resistance to the crushing test. All payment for concrete testing is done once in this procedure. 7 Obtain certificate of structural stability (second pouring of concrete) 7 days no charge Agency : Lagos State Material Testing Laboratory 8 Obtain certificate of structural stability (third pouring of concrete) 7 days no charge Agency : Lagos State Material Testing Laboratory 9 Obtain certificate of structural stability of foundation 7 days no charge Agency : Lagos State Material Testing Laboratory 10 Receive joint inspection during construction from the Building Control 1 day no charge Agency and the Zonal Agency Agency : Building Control Agency and Zonal Agency 11 Receive inspections during construction from the Lagos State Building 1 day no charge Control Agency (LASBCA) Agency : Lagos State Building Control Agency The Lagos State Urban and Regional Planning and Development Law from July 2010 gives the Building Control Agency the power to carry out inspection(s) of building construction, when necessary. 12 Request and receive inspection by the Fire Department 1 day no charge Agency : Fire Department This certificate must be obtained at the local planning authority before the building can be used. It is within the discretion of the authority to conduct an on- site inspection before issuing the certificate. However, such an inspection, which normally takes about 45 minutes, is rarely performed. 13 Submit completed Form C and request and receive final inspection and 14 days no charge Certificate of Habitation Agency : Lagos State Building Control Agency 14 Submit application for water connection to Lagos Water Company 1 day no charge Agency : Zonal Office BuildCo collects the LWC Water Connection Form ("WCF") from the nearest Zonal Office ("ZO"). There are 31 zones in Lagos. The Completed WCF is submitted to ZO and ZO sends a Site Inspection Officer ("SIO") to the customer's property. • SIO confirms address and locational details of BuildCo's property. SIO also establishes an optimal size and length of connection pipes, and optimal connection materials. • SIO prepares comprehensive Site Report ("SR") including estimates of total connection costs, and submits SR to the ZO. • ZO prepares connection bill to customer. Page 18 Doing Business 2019 Nigeria 15 Pay the connection bill and submit evidence of payment to Zonal Office 1 day NGN 50,000 Agency : Zonal Office 16 Set up septic tank 14 days NGN 375,000 Agency : Private company There is no central sewage system in Lagos, therefore BuildCo sets up a septic tank to establish sewerage. Receive water connection 13 days no charge 17 Agency : Zonal Office Once payment has been made, the Zonal Office (ZO) procures the connection materials and carries out the connection works. Takes place simultaneously with previous procedure. Page 19 Doing Business 2019 Nigeria Details – Dealing with Construction Permits in Lagos – Measure of Quality Answer Score Building quality control index (0-15) 12.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly specified in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during construction? Inspections by in- 1.0 (0-2) house engineer; Inspections at various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a final inspection required by law to verify that the building was built in accordance Yes, final 2.0 with the approved plans and regulations? (0-2) inspection is done by government agency. Do legally mandated final inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 0.0 Which parties (if any) are held liable by law for structural flaws or problems in the building No party is held 0.0 once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) liable under the law. Which parties (if any) are required by law to obtain an insurance policy to cover possible No party is 0.0 structural flaws or problems in the building once it is in use (Latent Defect Liability Insurance required by law or Decennial Insurance)? (0-1) to obtain insurance . Professional certifications index (0-4) 4.0 What are the qualification requirements for the professional responsible for verifying that the Minimum number 2.0 architectural plans or drawings are in compliance with existing building regulations? (0-2) of years of experience; University degree in architecture or engineering; Being a registered architect or engineer; Passing a certification exam. Page 20 Doing Business 2019 Nigeria What are the qualification requirements for the professional who supervises the construction Minimum number 2.0 on the ground? (0-2) of years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer; Passing a certification exam. Page 21 Doing Business 2019 Nigeria Dealing with Construction Permits - Kano Standardized Warehouse Estimated value of warehouse NGN 29,142,359.20 City Covered Kano Indicator Kano Sub-Saharan OECD high Best Regulatory Africa income Performance Procedures (number) 13 14.7 12.7 None in 2017/18 Time (days) 84 145.7 153.1 None in 2017/18 Cost (% of warehouse value) 1.3 8.8 1.5 None in 2017/18 Building quality control index (0-15) 11.0 8.5 11.5 15.0 (3 Economies) Figure – Dealing with Construction Permits in Kano and comparator economies – Ranking and Score DB 2019 Dealing with Construction Permits Score 0 100 80.29: United Kingdom (Rank: 17) 79.52: Kano 68.25: South Africa (Rank: 96) 63.49: Kenya (Rank: 128) 51.37: Lagos Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators. Figure – Dealing with Construction Permits in Kano – Procedure, Time and Cost Time (days) Cost (% of warehouse value) 0.8 80 0.7 70 Cost (% of warehouse value) 0.6 60 Time (days) 0.5 50 0.4 40 30 0.3 20 0.2 10 0.1 0 0 1 2 3 4 5 6 7 8 9 * 10 11 12 * 13 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Page 22 Doing Business 2019 Nigeria Figure – Dealing with Construction Permits in Kano and comparator economies – Measure of Quality 15 12.0 12.0 11.0 Index score 10 9.0 9.0 8.5 5 0 Kano Kenya South Africa United Kingdom Lagos Sub-Saharan Africa Details – Dealing with Construction Permits in Kano – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Apply for building plan approval at the Kano State Urban Planning 7 days no charge Development Authority and await assessment of fees Agency : Kano State Urban Planning and Development Authority In order to obtain a building plan approval, BuildCo must submit a duly completed application form to the Kano State Urban Planning and Development Authority (KNUPDA), along with the following documents: a. Proof of ownership (such as a certificate of occupancy); b. Survey plan (includes the topographical characteristics of the land, attached to the certificate of occupancy); c. Drawings, including: - Architectural designs (site plan, floor plans, elevations, sections, storm drainage system, construction details, doors and windows schedules), duly signed by a registered architect; - Structural designs (design calculations, foundation layout, structural details on beams, columns, staircases, etc.), duly signed by a registered structural engineer; - Electrical designs (lighting and power load calculation, power point layout, lighting point layout, schedule of fittings and fixtures), duly signed by a registered electrical engineer; - Mechanical engineering designs (load calculations, waste disposal layout, soil disposal layout, schedule of sanitary fittings), duly signed by a registered mechanical engineer. The submitted documents require administrative approval by the KNUPDA. An assessment of the fees is given to BuildCo, to be paid at a designated bank. An on-site inspection will follow. 2 Pay the building plan approval fees at a designated bank 1 day NGN 117,045 Agency : Commercial Bank BuildCo is given a payment order to be submitted to and paid at a designated bank. After payment, BuildCo is given a teller, or a bank receipt, which must be submitted back to the Kano State Urban Planning and Development Authority (KNUPDA). The authority opens a file for BuildCo, and the documents are submitted to the deputy director and then forwarded to the inspection officers who conduct an on-site inspection. 3 Receive a pre-approval inspection from the Kano State Urban Planning and 1 day no charge Development Authority Agency : Kano State Urban Planning and Development Authority After BuildCo's application has been reviewed, the Kano State Urban Planning and Development Authority (KNUPDA) conducts an on-site inspection to verify that the plot reflects the details provided in the drawings and that the land is suitable for the proposed project. The inspectors draft a report in which the plot, roads, setback details, adjoining land and power and water connections are described. The report is then attached to the documents and drawings that BuildCo submitted for approval, and forwarded to KNUPDA for final review and approval. Page 23 Doing Business 2019 Nigeria 4 Obtain a building plan approval from the Kano State Urban Planning and 33 days no charge Development Authority Agency : Kano State Urban Planning and Development Authority After the inspection and the payments have been completed, the documents submitted for approval – along with the inspection report and the 3 remaining copies of the plan – are deposited with the managing director, who then sends the application file to the Department of Architecture. In the department, details of the application which includes title document, name, amount paid, type of building, building height and number of buildings on the site are recorded. All the documents are then forwarded to the charting officer to verify the survey plans against the government-approved survey plan included with the certificate of occupancy to make sure the building plan approval can be granted on that piece of land, and then allocates an identity number for the building plan. The application is then forwarded to the Record Office and then subsequently to the director of architecture, and then the deputy director who sends the file to the sectional head for the status of the site based on the application. The site report is then sent back to the sectional officer who will vet the architectural drawings and forward it on to a structural engineer where applicable. If everything is in order, a recommendation form is filled and signed by the vetting architect and passed to the deputy director for reassessment. It is then forwarded to the director as recommended. The director forwards the recommendation to the managing director for final approval. 5 Notify the Kano State Urban Planning and Development Authority 1 day no charge (KNUPDA) of commencement of work Agency : Kano State Urban Planning and Development Authority A letter notifying the Kano State Urban Planning and Development Authority (KNUPDA) of the commencement of work must be sent one week prior to any construction work. 6 Receive set-out inspection prior to excavation 1 day no charge Agency : Kano State Urban Development Authority (KNUPDA) BuildCo invites Kano State Urban Planning and Development Authority (KNUPDA) engineers to inspect the construction after setting out and before digging the foundation and pouring of the concrete. 7 Submit final report of completion of work and request the final inspection 1 day no charge Agency : Kano State Urban Planning and Development Authority The engineer will file a report notifying the Kano State Urban Planning and Development Authority (KNUPDA) of the completion of work and certifying that the warehouse was built according to the approved plans. The inspectors will then proceed with a final inspection to verify that the work has been completed according to the approved building plans. 8 Obtain final inspection from Kano State Urban Planning and Development 1 day no charge Authority Agency : Kano State Urban Planning and Development Authority 9 Obtain a certificate of habitation from the Kano State Urban Planning and 7 days no charge Development Authority Agency : Kano State Urban Planning and Development Authority BuildCo's supervising architect/engineer fills out a building certification form stating that the construction works have been completed according to the approved plan and submits it to Kano State Urban Planning and Development Authority (KNUPDA). Within 7 days from the receipt of the building certification form (at no cost), KNUPDA will issue a certificate of habitation. In practice, however, this procedure is neither adhered to nor enforced. Apply for water connection at the Kano State Water Board and pay 1 day NGN 15,000 10 application form fee Agency : Kano State Water Board In order to obtain a water connection, BuildCo must submit a commercial application form to the Kano State Water Board, which has offices throughout the city. 11 Receive an inspection by the Kano State Water Board 1 day no charge Agency : Kano State Water Board After the application has been submitted, a team of inspectors from the water board office visits the site to ascertain what needs to be done. 12 Obtain water connection 30 days NGN 50,000 Agency : Kano State Water Board The building is connected to water supply within one month. Set up septic tank 14 days NGN 200,000 13 Agency : Private company BuildCo sets up a septic tank to establish sewerage. Takes place simultaneously with previous procedure. Page 24 Doing Business 2019 Nigeria Details – Dealing with Construction Permits in Kano – Measure of Quality Answer Score Building quality control index (0-15) 11.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly specified in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals; Available only on request. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during construction? Inspections by in- 1.0 (0-2) house engineer; Inspections at various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 2.0 Is there a final inspection required by law to verify that the building was built in accordance Yes, final 2.0 with the approved plans and regulations? (0-2) inspection is done by government agency. Do legally mandated final inspections occur in practice? (0-1) Final inspection 0.0 does not always occur in practice. Liability and insurance regimes index (0-2) 0.0 Which parties (if any) are held liable by law for structural flaws or problems in the building No party is held 0.0 once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) liable under the law. Which parties (if any) are required by law to obtain an insurance policy to cover possible No party is 0.0 structural flaws or problems in the building once it is in use (Latent Defect Liability Insurance required by law or Decennial Insurance)? (0-1) to obtain insurance . Professional certifications index (0-4) 4.0 What are the qualification requirements for the professional responsible for verifying that the Minimum number 2.0 architectural plans or drawings are in compliance with existing building regulations? (0-2) of years of experience; University degree in architecture or engineering; Being a registered architect or engineer; Passing a certification exam. Page 25 Doing Business 2019 Nigeria What are the qualification requirements for the professional who supervises the construction Minimum number 2.0 on the ground? (0-2) of years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer; Passing a certification exam. Page 26 Doing Business 2019 Nigeria Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions about the (number) warehouse, the electricity connection and the monthly consumption are used. • Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. • Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the data are receiving all necessary inspections also collected for the second largest business city. • Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is in an purchasing material for these works area with no physical constraints. For example, the property is not near a railway. - Is a new construction and is being connected to electricity for the first time. • Concluding any necessary supply contract and obtaining final supply - Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 square feet). The plot of land on which it is built is 929 square meters Time required to complete each procedure (10,000 square feet). (calendar days) The electricity connection: • Is at least 1 calendar day - Is a permanent one with a three-phase, four-wire Y connection with a subscribed • Each procedure starts on a separate day capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 • Does not include time spent gathering kilowatt (kW). information - Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution network and is either overhead or underground, whichever is more • Reflects the time spent in practice, with little common in the area where the warehouse is located and requires works that involve follow-up and no prior contact with officials the crossing of a 10-meter road (such as by excavation or overhead lines) but are all Cost required to complete each procedure (% of carried out on public land. There is no crossing of other owners’ private property because the warehouse has access to a road. income per capita) - Does not require work to install the internal wiring of the warehouse. This has • Official costs only, no bribes already been completed up to and including the customer’s service panel or • Value added tax excluded switchboard and the meter base. The reliability of supply and transparency of The monthly consumption: tariffs index (0-8) - It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 • Duration and frequency of power outages (0–3) p.m. (8 hours a day), with equipment utilized at 80% of capacity on average and that • Tools to monitor power outages (0–1) there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours (kWh); hourly consumption is 112 kWh. • Tools to restore power supply (0–1) - If multiple electricity suppliers exist, the warehouse is served by the cheapest • Regulatory monitoring of utilities’ performance supplier. (0–1) - Tariffs effective in January of the current year are used for calculation of the price of electricity for the warehouse. Although January has 31 days, for calculation • Financial deterrents limiting outages (0–1) purposes only 30 days are used. • Transparency and accessibility of tariffs (0–1) Price of electricity (cents per kilowatt-hour)* • Price based on monthly bill for commercial warehouse in case study *Note: Doing Business measures the price of electricity, but it is not included in the ease of doing business score nor the ranking on the ease of getting electricity. Page 27 Doing Business 2019 Nigeria Getting Electricity - Lagos Standardized Connection Price of electricity (US cents per kWh) 12.8 Name of utility Eko Electricity Distribution PLC City Covered Lagos Indicator Lagos Sub-Saharan OECD high Best Regulatory Africa income Performance Procedures (number) 8 5.2 4.5 3 (25 Economies) Time (days) 122 112.0 77.2 18 (3 Economies) Cost (% of income per capita) 311.6 3456.5 64.2 0.0 (3 Economies) Reliability of supply and transparency of tariff 0 1.6 7.5 8.0 (27 Economies) index (0-8) Figure – Getting Electricity in Lagos and comparator economies – Ranking and Score DB 2019 Getting Electricity Score 0 100 96.45: United Kingdom (Rank: 7) 76.80: Kenya (Rank: 75) 68.79: South Africa (Rank: 109) 45.08: Kano 41.90: Lagos Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity. Page 28 Doing Business 2019 Nigeria Figure – Getting Electricity in Lagos – Procedure, Time and Cost Time (days) Cost (% of income per capita) 120 350 300 Cost (% of income per capita) 100 250 80 Time (days) 200 60 150 40 100 20 50 0 0 1 2 3 4 5 6 7 8 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Figure – Getting Electricity in Lagos and comparator economies – Measure of Quality 8 8 7 6 Index score 5 4 4 4 3 2 1.6 1 0 0 0 Lagos Kenya South Africa United Kingdom Kano Sub-Saharan Africa Page 29 Doing Business 2019 Nigeria Details – Getting Electricity in Lagos – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Submit application to Eko Electricity Distribution Company and await site 21 calendar days NGN 0 inspection Agency : Eko Electricity Distribution Company The client’s electrician must collect an application form at Eko Electricity Distribution Company, complete it and submit it to the utility’s office. The information requested includes the electrician’s PIN (Personal Identification Number) and a letter stating that he will be in charge of the internal installation as well as the installation of the transformer. Since the required load is higher than 100 kVA, the request will be sent to EKO Headquarters for approval. Upon approval, the clearance letter will be provided along with the list of materials to be bought by the customer. During the application process, a licensed electrical contractor acts on the customer’s behalf. Contractors have to be licensed so that they can be responsible for the correspondence with the utility. 2 Receive site inspection, approval letter, and submit payment 31 calendar days NGN 50,000 Agency : Eko Electricity Distribution Company Upon receipt of the application, the utility conducts a site visit and provides a clearance letter that describes the materials to be purchased by the client. The materials include the transformer and all things required to make the external connection. The materials must be new, purchased from an accredited distributor, and must include a test certificate of the transformer from the manufacturer. The letter also stipulates that a competent and licensed contractor (either COREN or Nigerian Electricity Management Services Agency registered in category A) should engage to handle the construction of the project. Also, the letter instructs the applicant that the works must be done in accordance with the regulations of the Nigerian Electricity Management Services Agency. 3 Purchase external connection equipment 1 calendar day NGN 1,681,000 Agency : Electrical contractor The customer needs to purchase cables, a distribution transformer, and installation accessories from the local market. 4 Request and receive inspection of purchased materials by Eko Electricity 3 calendar days NGN 0 Distribution Company Agency : Eko Electricity Distribution Company The utility performs an inspection of the purchased connection materials before the electrical contractor executes the installation 5 Conduct installation of transformer and cabling to the nearest utility pole 5 calendar days NGN 65,000 Agency : Eko Electricity Distribution Company Once the material inspection has been carried out, the client's electrical contractor installs the transformer and lays out the cabling to the nearest utility pole. 6 Request and receive inspection by inspecting engineer 25 calendar days NGN 20,000 Agency : Nigerian Electricity Management Services Agency The Nigerian Electricity Management Services Agency (NEMSA) will check if the installation has been properly done. If it is in compliance with all requirements, a Certificate of compliance will be issued. 7 Submit application for meter installation and receive visit from Metering 6 calendar days NGN 0 Department Agency : Eko Electricity Distribution Company Customer submits application for meter installation to utility. 8 Obtain meter installation by utility and electricity flow 30 calendar days NGN 0 Agency : Eko Electricity Distribution Company Utility installs the meter and energizes the warehouse. Takes place simultaneously with previous procedure. Page 30 Doing Business 2019 Nigeria Details – Getting Electricity in Lagos – Measure of Quality Answer Reliability of supply and transparency of tariff index (0-8) 0 Total duration and frequency of outages per customer a year (0-3) 0 System average interruption duration index (SAIDI) .. System average interruption frequency index (SAIFI) .. What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0 Mechanisms for monitoring outages (0-1) 0 Does the distribution utility use automated tools to monitor outages? No Mechanisms for restoring service (0-1) 0 Does the distribution utility use automated tools to restore service? No Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of Yes supply? Financial deterrents aimed at limiting outages (0-1) 0 Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages No exceed a certain cap? Communication of tariffs and tariff changes (0-1) 1 Are effective tariffs available online? Yes Link to the website, if available online https://www.ekedp.co m/commercial Are customers notified of a change in tariff ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Page 31 Doing Business 2019 Nigeria Getting Electricity - Kano Standardized Connection Price of electricity (US cents per kWh) 16.3 Name of utility Kano Electricity Distribution Company City Covered Kano Indicator Kano Sub-Saharan OECD high Best Regulatory Africa income Performance Procedures (number) 8 5.2 4.5 3 (25 Economies) Time (days) 93 112.0 77.2 18 (3 Economies) Cost (% of income per capita) 304.2 3456.5 64.2 0.0 (3 Economies) Reliability of supply and transparency of tariff 0 1.6 7.5 8.0 (27 Economies) index (0-8) Figure – Getting Electricity in Kano and comparator economies – Ranking and Score DB 2019 Getting Electricity Score 0 100 96.45: United Kingdom (Rank: 7) 76.80: Kenya (Rank: 75) 68.79: South Africa (Rank: 109) 45.08: Kano 41.90: Lagos Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity. Page 32 Doing Business 2019 Nigeria Figure – Getting Electricity in Kano – Procedure, Time and Cost Time (days) Cost (% of income per capita) 350 90 80 300 Cost (% of income per capita) 70 250 60 Time (days) 200 50 40 150 30 100 20 50 10 0 0 1 *2 3 4 5 6 7 8 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Figure – Getting Electricity in Kano and comparator economies – Measure of Quality 8 8 7 6 Index score 5 4 4 4 3 2 1.6 1 0 0 0 Kano Kenya South Africa United Kingdom Lagos Sub-Saharan Africa Page 33 Doing Business 2019 Nigeria Details – Getting Electricity in Kano – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Submit application to Kano Electricity Distribution Company (KEDCO) and 32 calendar days NGN 0 await clearance letter Agency : Kano Electricity Distribution Company The client’s electrician must collect an application form at Kano Electricity Distribution Company, complete it and submit it to the utility’s office. The information requested includes the electrician’s PIN (Personal Identification Number) and a letter stating that he will be in charge of the internal installation as well as the installation of the transformer. Upon approval, the clearance letter will be provided along with the list of materials to be bought by the customer. During the application process, a licensed electrical contractor acts on the customer’s behalf. Contractors have to be licensed so that they can be responsible for the correspondence with the utility. 2 Receive site visit and approval letter from KEDCO 21 calendar days NGN 0 Agency : Kano Electricity Distribution Company Upon receipt of the application, the utility will visit the warehouse to determine the materials that will be needed for the external connection works. The letter describes the materials that must be acquired by the client. This letter lists the characteristics of the distribution transformer and other external connection materials. Particularly, the letter requests that the materials have to be new, purchased from an accredited distributor, and must include a test certificate of the transformer from the manufacturer. During this procedure, KEDCO obtains the right of way. The customer will receive the clearance letter and the right of way. 3 Purchase external connection equipment 4 calendar days NGN 1,681,000 Agency : Electrical contractor The customer needs to purchase cables, a distribution transformer, and installation accessories from local market vendors. 4 Request and receive inspection of materials by KEDCO 14 calendar days NGN 0 Agency : Kano Electricity Distribution Company KEDCO’s inspecting engineer must check all materials to ascertain their quality. The engineer will ensure that all the materials comply with the requirements listed by the utility. 5 Install external connection equipment 10 calendar days NGN 72,000 Agency : Electrical contractor Once the inspection of the materials has been carried out, the client's electrical contractor may perform the external works, such as the installation of the external wiring and the transformer. 6 Request and receive inspection of installation by NEMSA 25 calendar days NGN 20,000 Agency : Nigerian Electricity Management Services Agency The customer must contact an engineer from NEMSA, who will perform the inspection of the installation and confirm that the external works have been done in accordance with the national safety standards. 7 Request and receive pre-meter installation site visit by Metering 4 calendar days NGN 0 Department Agency : Kano Electricity Distribution Company The metering department will conduct a site visit to assess the type of meter that must be installed. 8 Obtain meter installation by KEDCO and receive electricity supply 4 calendar days NGN 0 Agency : Kano Electricity Distribution Company The metering department selects the appropriate meter and conducts an installation. In the same moment, KEDCO will turn on the electricity supply. Takes place simultaneously with previous procedure. Page 34 Doing Business 2019 Nigeria Details – Getting Electricity in Kano – Measure of Quality Answer Reliability of supply and transparency of tariff index (0-8) 0 Total duration and frequency of outages per customer a year (0-3) 0 System average interruption duration index (SAIDI) .. System average interruption frequency index (SAIFI) .. What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0 Mechanisms for monitoring outages (0-1) 0 Does the distribution utility use automated tools to monitor outages? No Mechanisms for restoring service (0-1) 0 Does the distribution utility use automated tools to restore service? No Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of Yes supply? Financial deterrents aimed at limiting outages (0-1) 0 Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages No exceed a certain cap? Communication of tariffs and tariff changes (0-1) 1 Are effective tariffs available online? Yes Link to the website, if available online http://www.nercng.or g/index.php/home/co nsumers/how-much- do-i-pay-for- electricity Are customers notified of a change in tariff ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Page 35 Doing Business 2019 Nigeria Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on To make the data comparable across economies, several assumptions about the immovable property (number) parties to the transaction, the property and the procedures are used. • Preregistration procedures (for example, The parties (buyer and seller): checking for liens, notarizing sales agreement, paying property transfer taxes) - Are limited liability companies (or the legal equivalent). - Are located in the periurban area of the economy’s largest business city. For 11 • Registration procedures in the economy's largest economies the data are also collected for the second largest business city. business city. - Are 100% domestically and privately owned. • Postregistration procedures (for example, filling - Have 50 employees each, all of whom are nationals. title with municipality) - Perform general commercial activities. Time required to complete each procedure The property (fully owned by the seller): (calendar days) - Has a value of 50 times income per capita, which equals the sale price. • Does not include time spent gathering - Is fully owned by the seller. information - Has no mortgages attached and has been under the same ownership for the past • Each procedure starts on a separate day - 10 years. though procedures that can be fully completed - Is registered in the land registry or cadastre, or both, and is free of title disputes. online are an exception to this rule - Is located in a periurban commercial zone, and no rezoning is required. - Consists of land and a building. The land area is 557.4 square meters (6,000 • Procedure is considered completed once final square feet). A two-story warehouse of 929 square meters (10,000 square feet) is document is received located on the land. The warehouse is 10 years old, is in good condition, has no • No prior contact with officials heating system and complies with all safety standards, building codes and legal requirements. The property, consisting of land and building, will be transferred in its Cost required to complete each procedure (% of entirety. property value) - Will not be subject to renovations or additional construction following the purchase. • Official costs only (such as administrative fees, - Has no trees, natural water sources, natural reserves or historical monuments of duties and taxes). any kind. - Will not be used for special purposes, and no special permits, such as for • Value Added Tax, Capital Gains Tax and illicit residential use, industrial plants, waste storage or certain types of agricultural payments are excluded activities, are required. - Has no occupants, and no other party holds a legal interest in it. Quality of land administration index (0-30) • Reliability of infrastructure index (0-8) • Transparency of information index (0–6) • Geographic coverage index (0–8) • Land dispute resolution index (0–8) • Equal access to property rights index (-2–0) Page 36 Doing Business 2019 Nigeria Registering Property - Lagos Indicator Lagos Sub-Saharan OECD high Best Regulatory Africa income Performance Procedures (number) 12 6.2 4.7 1 (4 Economies) Time (days) 105 53.9 20.1 1 (New Zealand) Cost (% of property value) 11.1 7.6 4.2 0.0 (Saudi Arabia) Quality of the land administration index (0-30) 8.0 8.8 23.0 None in 2017/18 Figure – Registering Property in Lagos and comparator economies – Ranking and Score DB 2019 Registering Property Score 0 100 75.34: United Kingdom (Rank: 42) 59.32: South Africa (Rank: 106) 55.97: Kenya (Rank: 122) 32.73: Kano 27.75: Lagos Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of the scores for each of the component indicators. Figure – Registering Property in Lagos – Procedure, Time and Cost Time (days) Cost (% of property value) 8 100 7 Cost (% of property value) 80 6 Time (days) 5 60 4 40 3 2 20 1 0 0 1 2 3 4 5 *6 *7 *8 *9 * 10 11 12 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Page 37 Doing Business 2019 Nigeria Figure – Registering Property in Lagos and comparator economies – Measure of Quality 30 25.5 25 Index score 20 16.0 15.0 15 10 8.0 8.8 4.5 5 0 Lagos Kenya South Africa United Kingdom Kano Sub-Saharan Africa Details – Registering Property in Lagos – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Conduct a Property title search at the Land Registry 1 day NGN 2,196,676.94; Agency : Lagos State Lands Registry (NGN 3,750 (search The application letter to conduct the search is required to list purpose of the at Registry) + Legal search. A lawyer is generally used to perform the registration of property. Legal fees for the entire fees are charged based on the Scale of Fees for Conveyancing Matters [Legal process as follows: Practitioners (Remuneration for Legal Documentation and Other Land Matters) NGN 7,500–10,000 + Order 1991]. This is a sliding scale , and averages out at about 7.5% of the 7.5% of values above consideration. The fees include all the steps required until the new title is registered under the buyer’s name. NGN 20,000 if acting for the buyer (5% of The primary objective at this stage is to ascertain that the Vendor has a good values above NGN root of title. A good root of title in this context means the following: 20,000 if acting for that the Vendor is the rightful owner of the land. the seller)) that the land is free from any encumbrance or pending litigation. that the land is not the subject of any Government acquisition. that the land is not subject to any of the overriding interests in land (e.g. short leases, easements, licenses, road or right of way). 2 Draft and Execute the Deed of Assignment 1 day included in cost from Agency : Lawyer's office (Deed of Assignment) procedure 1 Representatives of the firms (assignor and assignee) complete and affix their seals on the Land Form 1C and four (4) copies of the Deed of Assignment. The Land Form 1c is a document obtained at the Land Registry to be completed by the parties and duly notarized by a Notary Public or signed by a Commissioner for oaths. Lawyers often have the Form in their office. The Deed of Assignment on the other hand is as legal instrument conveying the interest/tile in a property to another. This is prepared by a lawyer and is to be executed by both parties in the presence of a witness. 3 Obtain Certified True Copy (CTC) of title document and a Certified True 4 days NGN 7,500; (NGN Copy of the Survey plan 5,625 + NGN 1,875) Agency : Land Registry The application letter to obtain a Certified True Copy of the title of ownership and a CTC of the land survey plan are accompanied by a sworn affidavit of purpose to support an application. Without these two documents the application for the Governor's consent would not be admitted. Parties obtain a copy of the survey Plan, as approved by the Office of the Surveyor General, which is required for the Governor's Consent. Under Nigerian law, a clear proof of the identity of the land plot is needed. The survey plan gives the coordinates of the plot and must fit in the official map of Lagos. It identifies the boundary of the property. If using a private surveyor, he must be a registered one. 4 Payment of the Charting Fee, Endorsement fee and Form 1C at a 1 day NGN 10,500; designated bank (Charting Fees (NGN Agency : Government accrediated bank 7,500) + Payment advice to be obtained from the Revenue Office for the purpose of PID Endorsement Fees Number generation after which is affected in the Bank. Payment for the above (NGN 1,500) + NGN can be made to any Government accreditated bank either by a bank draft, 1,500 for Form 1C) cheque or cash. The Bank then issues a Government Revenue receipt. The receipts is what is submitted together with the application for Governor's Consent. Page 38 Doing Business 2019 Nigeria 5 Submit application for processing Governor's Consent and obtain the Title 90 days no charge Agency : Directorate of Land Services By virtue of the Land Use Act, promulgated in 1978, all land in each State in the Federation became vested in the Governor of that State, who’s prior Consent is mandatory for the legal validity of any transfers or alienation of interest in landed property. In August 2005, the Governor’s Consent procedure underwent major reform, with the aim that Consent should be granted within 30 working days following submission of a duly completed application. Incomplete applications are not accepted. New procedures and documentation requirements have been widely published. The Land Services will also conduct their own checking for encumbrances on the property and whether the land has no government dispute. Obtaining the Governor’s consent require the following documentation: • Covering letter with Address and Telephone Nos. • Completed Form 1C • Certified True Copy (CTC) of Title Document of Assignor • Current Tax Clearance Certificates of the Assignor and Assignee • For Limited Liability Companies, the Internal Revenue Certificate of PAYE Directors • Four (4) copies of the Deed of which Consent is sought should be attached. • Copy of the Survey Plan, as approved by the surveyor General office and a picture of the Building • Evidence of payment for Charting fee, Endorsement fee, Form 1C • Evidence of payment of Land Use Charge • Where the Property is covered by a State Leasehold or Certificate of Occupancy, evidence of payment of Ground Rent, up to date. • A photograph of the property • A copy of the applicant and/or his agent/legal representative’s identification 6 Charting of survey plans attached to the Deeds 10 days no charge Agency : Surveyor General's office Upon submission of the application documents and payment of the administrative fee, the application is given a unique reference number, processes and delivered to the Surveyor General's office for charting to ensure that plans were prepared in accordance with survey rules and the property is free from the government acquisition. If there are no queries, the Deeds are returned to the Directorate of Lands service for issuance of the Assessment Notice. Where the survey plan is queried, a notice of the query is issued to the applicant. 7 Obtain Demand Notice for Registration fees, Consent fees, Neighborhood 3 days no charge improvement charge at the Land Registry Agency : Directorate of Land Services After investigation and assessment of the true value of the property, the applicant will be issued with an assessment letter. The Letter will contain the amount for the Registration fee, Consent fee, Neighborhood improvement charge and the Capital gains tax that should be paid to the Lagos State Government Account. 8 Obtain Demand Notice for Stamp Duty 1 day no charge Agency : Lagos State Inland Revenue Service or Federal Internal Revenue service (FIRS) After investigation and assessment of the true value of the property, the applicant will be issued with an assessment letter. The Letter will contain the amount for Stamp duty verified with Federal Internal Revenue Service. Payment of the Stamp duty should be paid to the Lagos State Government Account. Page 39 Doing Business 2019 Nigeria 9 Payment of Stamp duty , Registration fees, Consent fees, Neighborhood 1 day NGN 1,031,130.57; improvement charge at a commercial bank (Consent Fee 1.5% + Agency : Designated bank Stamp duty for Legal The applicant pays the remaining fees at the designated bank by means of Entities 1.5% + certified checks: Registration fee 0.5% Consent Fee 1.5% + Registration fee for Legal Entities 1.5% + Stamp duty 0.5% + the Neighborhood + capital gains tax of 0.5%. Furthermore, the Neighborhood Improvement Charges (N.I.C) are also paid. Receipts are provided to the applicant, who will Improvement make copies of those receipts before submitting the original receipts to the Land Charges (N.I.C) (for Registry for verification. private and excised lands), which is On January 5, 2015, the Government of the Lagos State of the Federal Republic calculated by taking of Nigeria adopted the Executive Bill No EO/BRF/001 of 2015. The Order, which the size of land x N2 takes immediate effect, reduces Consent Fees from 6 percent to 1.5 percent per square meter, x while Capital Gains tax, which was previously 2 percent, is reduced to 0.5 number of years of percent. Also cost of Stamp Duty has been reduced from 2 percent to 0.5 percent relevant title (10 while Registration Fees has been reduced from 3 percent to 0.5 percent. years in our case scenario). (Capital However, the Executive Order provides, among others, that "unless otherwise gains tax of 0.5% is indicated, the valuation of landed property for the determination of tax and other charges payable shall be by reference to the Statement of Fair market Value also paid, but are not produced by relevant professionals, adopted by the State Government and included in the published from time to time in the Official Government Gazette". calculation per methodology).) Submit the Receipts of the Registration fees, Consent fees, Neighborhood 1 day no charge 10 improvement charge, Stamp duty Agency : Directorate of Land Services Receipts obtained from the bank are submitted as proof of payment to the Land Registry. These receipts are internally forwarded to the Account Department for reconciliation. The lawyer retains copies of the deposit/payment slip is retained for his/her record. The Land Registry manually confirms these payments to the relevant departments. Once payment is confirmed by the Accounts Department, the Land Services Department sends the file directly to one of the designated commissioners to grant the Consent on behalf of the Governor. 11 Stamping of the deed of assignment 1 day Already paid in Agency : Stamping duties office Procedure 9 Deeds are presented by assignee’s lawyer for stamping at the Stamp Duties Registry (agency of Inland Revenue Services). Stamping takes place only after Registry receives confirmation of receipt of payment. The documentation shall include: receipts confirming payment of stamp duty. 12 Registration of Certificate of Occupancy or Deed and Title conferred 7 days Already paid in Agency : Land Registry Procedure 9 The lawyer will then follow up on the deed to be filed to the Lands Registry. The receipt and paying-in slips evidencing payment are given to the cashier at the Lands Registry. With proof of payment, a lands officer is assigned to enter the Deed into the Registry records. Takes place simultaneously with previous procedure. Page 40 Doing Business 2019 Nigeria Details – Registering Property in Lagos – Measure of Quality Answer Score Reliability of infrastructure index (0-8) 2.0 What is the institution in charge of immovable property registration? Lagos State Land Registry In what format are the majority of title or deed records kept in the largest business city—in a Computer/Scann 1.0 paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, restrictions Yes 1.0 and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Office of the State Surveyor General In what format are the majority of maps of land plots kept in the largest business city—in a Paper 0.0 paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for recording boundaries, checking plans and providing No 0.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the cadastral Separate 0.0 or mapping agency kept in a single database, in different but linked databases or in separate databases databases? Do the immovable property registration agency and cadastral or mapping agency use the No 0.0 same identification number for properties? Transparency of information index (0–6) 3.0 Who is able to obtain information on land ownership at the agency in charge of immovable Only 0.0 property registration in the largest business city? intermediaries and interested parties Is the list of documents that are required to complete any type of property transaction made Yes, online 0.5 publicly available–and if so, how? Link for online access: http://landsburea u.lagosstate.gov. ng/2017/05/16/dir ectorate-of-land- registry-2/ Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available–and if so, how? Link for online access: https://landsbure au.lagosstate.gov .ng/schdule-of- fees/ Does the agency in charge of immovable property registration commit to delivering a legally Yes, in person 0.0 binding document that proves property ownership within a specific time frame–and if so, how does it communicate the service standard? Link for online access: https://landsbure au.lagosstate.gov .ng/schdule-of- fees/ Is there a specific and separate mechanism for filing complaints about a problem that Yes 1.0 occurred at the agency in charge of immovable property registration? Contact information: https://citizensgat e.lagosstate.gov. ng/#/complaint Are there publicly available official statistics tracking the number of transactions at the No 0.0 immovable property registration agency? Number of property transfers in the largest business city in 2017: Page 41 Doing Business 2019 Nigeria Who is able to consult maps of land plots in the largest business city? Only 0.0 intermediaries and interested parties Is the applicable fee schedule for accessing maps of land plots made publicly available— Yes, online 0.5 and if so, how? Link for online access: http://surveyorge neral.lagosstate. gov.ng/2018/03/1 2/procedure-for- sales-of-digital- mapping- products- applicable-fees/ http://surveyorge neral.lagosstate. gov.ng/wp- content/uploads/s ites/208/2017/11/ schedule_of_surv ey_fees.pdf Does the cadastral or mapping agency commit to delivering an updated map within a No 0.0 specific time frame—and if so, how does it communicate the service standard? Link for online access: Is there a specific and separate mechanism for filing complaints about a problem that Yes 0.5 occurred at the cadastral or mapping agency? Contact information: https://citizensgat e.lagosstate.gov. ng/#/complaint Geographic coverage index (0–8) 0.0 Are all privately held land plots in the economy formally registered at the immovable property No 0.0 registry? Are all privately held land plots in the largest business city formally registered at the No 0.0 immovable property registry? Are all privately held land plots in the economy mapped? No 0.0 Are all privately held land plots in the largest business city mapped? No 0.0 Land dispute resolution index (0–8) 3.0 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private guarantee? Yes 0.5 Is there a specific compensation mechanism to cover for losses incurred by parties who No 0.0 engaged in good faith in a property transaction based on erroneous information certified by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a property Yes 0.5 transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Lawyer; Does the legal system require verification of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar; Lawyer; Is there a national database to verify the accuracy of identity documents? No 0.0 For a standard land dispute between two local businesses over tenure rights of a property Lagos State High worth 50 times gross national income (GNI) per capita and located in the largest business Court city, what court would be in charge of the case in the first instance? How long does it take on average to obtain a decision from the first-instance court for such a More than 3 0.0 case (without appeal)? years Page 42 Doing Business 2019 Nigeria Are there any statistics on the number of land disputes in the first instance? No 0.0 Number of land disputes in the largest business city in 2017: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes Do married men and married women have equal ownership rights to property? Yes 0.0 Page 43 Doing Business 2019 Nigeria Registering Property - Kano Indicator Kano Sub-Saharan OECD high Best Regulatory Africa income Performance Procedures (number) 11 6.2 4.7 1 (4 Economies) Time (days) 47 53.9 20.1 1 (New Zealand) Cost (% of property value) 11.8 7.6 4.2 0.0 (Saudi Arabia) Quality of the land administration index (0-30) 4.5 8.8 23.0 None in 2017/18 Figure – Registering Property in Kano and comparator economies – Ranking and Score DB 2019 Registering Property Score 0 100 75.34: United Kingdom (Rank: 42) 59.32: South Africa (Rank: 106) 55.97: Kenya (Rank: 122) 32.73: Kano 27.75: Lagos Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of the scores for each of the component indicators. Figure – Registering Property in Kano – Procedure, Time and Cost Time (days) Cost (% of property value) 6 45 40 5 Cost (% of property value) 35 4 30 Time (days) 25 3 20 15 2 10 1 5 0 0 1 2 3 4 *5 6 7 8 9 10 11 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Page 44 Doing Business 2019 Nigeria Figure – Registering Property in Kano and comparator economies – Measure of Quality 30 25.5 25 Index score 20 16.0 15.0 15 10 8.0 8.8 4.5 5 0 Kano Kenya South Africa United Kingdom Lagos Sub-Saharan Africa Details – Registering Property in Kano – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Pay search fee and consent application fee at designated bank 1 day NGN 7,000; (NGN Agency : Designated Bank 5,000 search fee + Buyer, or their representative, makes payment at designated bank. NGN 2,000 consent application fee) 2 Conduct search of property title and obtain consent application form at 7 days no charge Bureau of Land Management Agency : Bureau for Land Management The lawyer representing the parties fills out and submits a letter together with the proof of payment of search fee and proceeds to conducting the search. 3 Draft and execute deed of assignment and consent application form 1 day NGN 1,092,838.47; Agency : Lawyer's Office (3.75% of property Seller and buyer sign four (4) copies of the deed of assignment and the value legal fee) application for consent form. Legal fees are charged based on the Scale of Fees for Conveyancing Matters [Legal Practitioners (Remuneration for Legal Documentation and Other Land Matters) Order 1991]. This is a sliding scale based on slices of the consideration involved, and averages out at about 7.5% of the consideration. In practice, due to competition among lawyers, the fees charged for property assignment in Kano are lower than those prescribed and amount to approximately 3.75% of property value. The fees will include all the steps required until the new title is registered under the buyer's name 4 Submit application to obtain Governor's consent to the assignment at the 30 days NGN 10,000; Bureau for Land Management (processing fee) Agency : Bureau for Land Management By virtue of the Land Use Act, promulgated in 1978, all land comprised in territory of each state in the federation became vested in the Governor of that state, whose prior consent is mandatory for the legal validity of any transfers or alienation of interest in landed property. In Kano, the authority to grant the consent has been delegated by the Governor to the Commissioner for Lands, who delegated it further to the Permanent Secretary for Lands. In order to obtain such consent, the following documents must be submitted: a. Proof of settlement of outstanding ground rates; b. Letter of clearance of the title holder and board’s resolution in case of a corporate body; c. Three years tax clearance certificates of the seller and buyer; d. Registration particulars and articles of association of the company. 5 Receive inspection of the property from the Bureau for Land Management 7 days Included in cost of Agency : Bureau for Land Management procedure 2, The valuation includes a physical inspection of the property to assess its market value. Upon completion of valuation, a valuation report is issued, based on which registration fees are assessed. 6 Obtain demand order for payment and letter of consent 1 day no charge Agency : Bureau for Land Management The applicant receives a letter of consent, which is conditional on payment of the prescribed fees. Registration must be done within 4 months; failure to do so attracts a penalty of NGN 100 payable on each defaulting day including weekends. 7 Pay registration fee at designated bank 1 day NGN 1,457,117.96; Agency : Designated Bank (5% of property After receiving the conditional letter of consent that stipulates the fees to be paid, value) the applicant pays the registration fee to the Designated Bank. Page 45 Doing Business 2019 Nigeria 8 Assess deed of assignment at the Stamp Duty Office (Federal Inland 1 day no charge Revenue Services) Agency : Stamp Duty Office, Federal Board of Inland Revenue The deed of assignment is then submitted to FIRS to be assessed. The FIRS typically uses the figure indicated by the Lands Registry in their assessment of fees. 9 Pay Stamp Duty at the designated bank 1 day NGN 874,270.77; Agency : Designated Bank (Stamp Duty fee is The applicable stamp duty is paid at the designated bank. 3% of property value) 10 Submit payment receipt of Stamp Duty and stamp the deed of assignment 1 day no charge (Federal Inland Revenue Services) Agency : Stamp Duty Office, Federal Board of Inland Revenue The deed is presented by buyer's lawyer for stamping at the FIRS. Stamping takes place only after the FIRS receives confirmation of receipt of payment. 11 Register the deed of assignment at Lands Registry 3 days no charge Agency : Ministry of Lands and Physical Planning Buyer's lawyer submits payment receipts to the Schedule Officer at Lands Registry, who in turn enters the deed into the Lands Registry records. Takes place simultaneously with previous procedure. Page 46 Doing Business 2019 Nigeria Details – Registering Property in Kano – Measure of Quality Answer Score Reliability of infrastructure index (0-8) 1.0 What is the institution in charge of immovable property registration? Kano State Bureau of Land Management In what format are the majority of title or deed records kept in the largest business city—in a Paper 0.0 paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for checking for encumbrances (liens, mortgages, restrictions No 0.0 and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Kano State Bureau of Land Management In what format are the majority of maps of land plots kept in the largest business city—in a Paper 0.0 paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the cadastral Separate 0.0 or mapping agency kept in a single database, in different but linked databases or in separate databases databases? Do the immovable property registration agency and cadastral or mapping agency use the No 0.0 same identification number for properties? Transparency of information index (0–6) 0.5 Who is able to obtain information on land ownership at the agency in charge of immovable Only 0.0 property registration in the largest business city? intermediaries and interested parties Is the list of documents that are required to complete any type of property transaction made Yes, in person 0.0 publicly available–and if so, how? Link for online access: Is the applicable fee schedule for any property transaction at the agency in charge of Yes, in person 0.0 immovable property registration in the largest business city made publicly available–and if so, how? Link for online access: Does the agency in charge of immovable property registration commit to delivering a legally Yes, online 0.5 binding document that proves property ownership within a specific time frame–and if so, how does it communicate the service standard? Link for online access: Is there a specific and separate mechanism for filing complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Are there publicly available official statistics tracking the number of transactions at the No 0.0 immovable property registration agency? Number of property transfers in the largest business city in 2017: Who is able to consult maps of land plots in the largest business city? Only 0.0 intermediaries and interested parties Is the applicable fee schedule for accessing maps of land plots made publicly available— Yes, in person 0.0 and if so, how? Link for online access: Page 47 Doing Business 2019 Nigeria Does the cadastral or mapping agency commit to delivering an updated map within a No 0.0 specific time frame—and if so, how does it communicate the service standard? Link for online access: Is there a specific and separate mechanism for filing complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 0.0 Are all privately held land plots in the economy formally registered at the immovable property No 0.0 registry? Are all privately held land plots in the largest business city formally registered at the No 0.0 immovable property registry? Are all privately held land plots in the economy mapped? No 0.0 Are all privately held land plots in the largest business city mapped? No 0.0 Land dispute resolution index (0–8) 3.0 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private guarantee? Yes 0.5 Is there a specific compensation mechanism to cover for losses incurred by parties who No 0.0 engaged in good faith in a property transaction based on erroneous information certified by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a property Yes 0.5 transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Lawyer; Does the legal system require verification of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar; Lawyer; Is there a national database to verify the accuracy of identity documents? No 0.0 For a standard land dispute between two local businesses over tenure rights of a property High Court of worth 50 times gross national income (GNI) per capita and located in the largest business Kano State. city, what court would be in charge of the case in the first instance? How long does it take on average to obtain a decision from the first-instance court for such a More than 3 0.0 case (without appeal)? years Are there any statistics on the number of land disputes in the first instance? No 0.0 Number of land disputes in the largest business city in 2017: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes Do married men and married women have equal ownership rights to property? Yes 0.0 Page 48 Doing Business 2019 Nigeria Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions through 2 sets of • Rights of borrowers and lenders through indicators. The depth of credit information index measures rules and practices collateral laws (0-10) affecting the coverage, scope and accessibility of credit information available • Protection of secured creditors’ rights through through a credit registry or a credit bureau. The strength of legal rights index bankruptcy laws (0-2) measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first Depth of credit information index (0–8) determined whether a unitary secured transactions system exists. Then two case • Scope and accessibility of credit information scenarios, case A and case B, are used to determine how a nonpossessory security distributed by credit bureaus and credit registries interest is created, publicized and enforced according to the law. Special emphasis (0-8) is given to how the collateral registry operates (if registration of security interests is possible). The case scenarios involve a secured borrower, company ABC, and a Credit bureau coverage (% of adults) secured lender, BizBank. • Number of individuals and firms listed in largest In some economies the legal framework for secured transactions will allow only case credit bureau as a percentage of adult population A or case B (not both) to apply. Both cases examine the same set of legal provisions Credit registry coverage (% of adults) relating to the use of movable collateral. • Number of individuals and firms listed in credit Several assumptions about the secured borrower (ABC) and lender (BizBank) registry as a percentage of adult population are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. Page 49 Doing Business 2019 Nigeria Getting Credit - Lagos Indicator Lagos Sub-Saharan OECD high Best Regulatory Africa income Performance Strength of legal rights index (0-12) 9 5.2 6.1 12 (5 Economies) Depth of credit information index (0-8) 8 3.3 6.7 8 (42 Economies) Credit registry coverage (% of adults) 0.8 7.0 21.8 100.0 (4 Economies) Credit bureau coverage (% of adults) 11 8.9 65.3 100.0 (25 Economies) Figure – Getting Credit in Lagos and comparator economies – Ranking and Score DB 2019 Getting Credit Score 0 100 90.00: Kenya (Rank: 8) 85.00: Kano 85.00: Lagos 75.00: United Kingdom (Rank: 32) 60.00: South Africa (Rank: 73) Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in Lagos and comparator economies 9 10 9 8 7 7 6 5.2 Index Score 5 5 4 3 2 1 0 Lagos Kenya South Africa United Kingdom Kano Sub-Saharan Africa Page 50 Doing Business 2019 Nigeria Details – Legal Rights in Lagos Strength of legal rights index (0-12) 9 Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and Yes enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a specific description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a Yes specific description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and Yes replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be Yes secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by No asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? Yes Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed Yes online by any interested third party? Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency Yes procedure? Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? No Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization No procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow Yes the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Lagos and comparator economies 8 8 8 8 8 7 7 6 Index Score 5 4 3.3 3 2 1 0 Lagos Kenya South Africa United Kingdom Kano Sub-Saharan Africa Page 51 Doing Business 2019 Nigeria Details – Credit Information in Lagos Depth of credit information index (0-8) Credit Credit Score bureau registry Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative credit data distributed? Yes No 1 Are data from retailers or utility companies - in addition to data from banks and Yes No 1 financial institutions - distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries Yes No 1 that distribute more than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes No 1 By law, do borrowers have the right to access their data in the credit bureau or Yes No 1 credit registry? Can banks and financial institutions access borrowers’ credit information online Yes No 1 (for example, through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help Yes No 1 banks and financial institutions assess the creditworthiness of borrowers? Total Score ("yes" to either public bureau or private registry) 8 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 9,940,375 755,076 Number of firms 1,234,413 69,311 Total 11,174,788 824,387 Percentage of adult population 11 0.8 Page 52 Doing Business 2019 Nigeria Getting Credit - Kano Indicator Kano Sub-Saharan OECD high Best Regulatory Africa income Performance Strength of legal rights index (0-12) 9 5.2 6.1 12 (5 Economies) Depth of credit information index (0-8) 8 3.3 6.7 8 (42 Economies) Credit registry coverage (% of adults) 0.8 7.0 21.8 100.0 (4 Economies) Credit bureau coverage (% of adults) 11 8.9 65.3 100.0 (25 Economies) Figure – Getting Credit in Kano and comparator economies – Ranking and Score DB 2019 Getting Credit Score 0 100 90.00: Kenya (Rank: 8) 85.00: Kano 85.00: Lagos 75.00: United Kingdom (Rank: 32) 60.00: South Africa (Rank: 73) Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in Kano and comparator economies 9 10 9 8 7 7 6 5.2 Index Score 5 5 4 3 2 1 0 Kano Kenya South Africa United Kingdom Lagos Sub-Saharan Africa Page 53 Doing Business 2019 Nigeria Details – Legal Rights in Kano Strength of legal rights index (0-12) 9 Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and Yes enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a specific description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a Yes specific description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and Yes replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be Yes secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by No asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? Yes Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed Yes online by any interested third party? Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency Yes procedure? Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? No Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization No procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow Yes the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Kano and comparator economies 8 8 8 8 8 7 7 6 Index Score 5 4 3.3 3 2 1 0 Kano Kenya South Africa United Kingdom Lagos Sub-Saharan Africa Page 54 Doing Business 2019 Nigeria Details – Credit Information in Kano Depth of credit information index (0-8) Credit Credit Score bureau registry Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative credit data distributed? Yes No 1 Are data from retailers or utility companies - in addition to data from banks and Yes No 1 financial institutions - distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries Yes No 1 that distribute more than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes No 1 By law, do borrowers have the right to access their data in the credit bureau or Yes No 1 credit registry? Can banks and financial institutions access borrowers’ credit information online Yes No 1 (for example, through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help Yes No 1 banks and financial institutions assess the creditworthiness of borrowers? Total Score ("yes" to either public bureau or private registry) 8 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 9,940,375 755,076 Number of firms 1,234,413 69,311 Total 11,174,788 824,387 Percentage of adult population 11 0.8 Page 55 Doing Business 2019 Nigeria Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions • Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related- party transactions The business (Buyer): • Extent of director liability index (0–10): Ability - Is a publicly traded corporation listed on the economy’s most important stock of minority shareholders to sue and hold exchange. If there are fewer than ten listed companies or if there is no stock interested directors liable for prejudicial related- exchange in the economy, it is assumed that Buyer is a large private company with party transactions; Available legal remedies multiple shareholders. (damages, disgorgement of profits, fines, - Has a board of directors and a chief executive officer (CEO) who may legally act on imprisonment, rescission of the transaction) behalf of Buyer where permitted, even if this is not specifically required by law. • Ease of shareholder suits index (0–10): - Has a supervisory board in economies with a two-tier board system on which Mr. Access to internal corporate documents; James appointed 60% of the shareholder-elected members. Evidence obtainable during trial and allocation of - Has not adopted bylaws or articles of association that go beyond the minimum legal expenses requirements. Does not follow codes, principles, recommendations or guidelines that are not mandatory. • Extent of conflict of interest regulation index - Is a manufacturing company with its own distribution network. (0–10): Simple average of the extent of disclosure, extent of director liability and ease of The transaction involves the following details: shareholder indices - Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two • Extent of shareholder rights index (0-10): directors to Buyer’s five-member board. Shareholders’ rights and role in major corporate - Mr. James also owns 90% of Seller, a company that operates a chain of retail decisions hardware stores. Seller recently closed a large number of its stores. • Extent of ownership and control index (0-10): - Mr. James proposes that Buyer purchase Seller’s unused fleet of trucks to expand Governance safeguards protecting shareholders Buyer’s distribution of its food products, a proposal to which Buyer agrees. The price from undue board control and entrenchment is equal to 10% of Buyer’s assets and is higher than the market value. - The proposed transaction is part of the company’s principal activity and is not • Extent of corporate transparency index (0-10): outside the authority of the company. Corporate transparency on ownership stakes, - Buyer enters into the transaction. All required approvals are obtained, and all compensation, audits and financial prospects required disclosures made—that is, the transaction was not entered into fraudulently. • Extent of shareholder governance index (0– - The transaction causes damages to Buyer. Shareholders sue Mr. James and the 10): Simple average of the extent of shareholders executives and directors that approved the transaction. rights, extent of ownership and control and extent of corporate transparency indices • Strength of minority investor protection index (0–10): Simple average of the extent of conflict of interest regulation and extent of shareholder governance indices Page 56 Doing Business 2019 Nigeria Protecting Minority Investors - Lagos Indicator Lagos Sub-Saharan OECD high Best Regulatory Africa income Performance Extent of disclosure index (0-10) 7.0 5.5 6.5 10 (13 Economies) Extent of director liability index (0-10) 7.0 3.5 5.3 10 (Cambodia) Ease of shareholder suits index (0-10) 7.0 5.5 7.3 10 (Djibouti) Extent of shareholder rights index (0-10) 5.0 4.6 6.4 10 (Kazakhstan) Extent of ownership and control index (0-10) 5.0 3.4 5.4 None in 2017/18 Extent of corporate transparency index (0-10) 9.0 4.1 7.6 10 (6 Economies) Figure – Protecting Minority Investors in Lagos and comparator economies – Ranking and Score DB 2019 Protecting Minority Investors Score 0 100 78.33: Kenya (Rank: 11) 75.00: United Kingdom (Rank: 15) 73.33: South Africa (Rank: 23) 66.67: Kano 66.67: Lagos Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores are the simple average of the scores for the extent of conflict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Lagos and comparator economies – Measure of Quality Lagos 9 7 7 5 5 7 Kano 9 7 7 5 5 7 Kenya 5 10 10 6 7 9 South Africa 5 8 8 7 8 8 United Kingdom 8 7 10 5 7 8 OECD high income 7.4 5.5 6.5 5.2 6.3 7.4 Sub-Saharan Africa 4.3 3.6 5.6 3.4 4.7 5.6 0 5 10 15 20 25 30 35 40 45 50 Sub-Indicator Score Extent of corporate transparency index (0-10) Extent of director liability index (0-10) Extent of disclosure index (0-10) Extent of ownership and control index (0-10) Extent of shareholder rights index (0-10) Ease of shareholder suits index (0-10) Page 57 Doing Business 2019 Nigeria Details – Protecting Minority Investors in Lagos – Measure of Quality Answer Score Extent of conflict of interest regulation index (0-10) 7 Extent of disclosure index (0-10) 7.0 Whose decision is sufficient to approve the Buyer-Seller transaction? (0-3) Shareholders 3.0 excluding interested parties Must an external body review the terms of the transaction before it takes place? (0-1) Yes 1.0 Must Mr. James disclose his conflict of interest to the board of directors? (0-2) Existence of a 1.0 conflict without any specifics Must Buyer disclose the transaction in periodic filings (e.g. annual reports)? (0-2) Disclosure on the 2.0 transaction and on the conflict of interest Must Buyer immediately disclose the transaction to the public? (0-2) No disclosure 0.0 obligation Extent of director liability index (0-10) 7.0 Can shareholders representing 10% of Buyer's share capital sue for the damage the Yes 1.0 transaction caused to Buyer? (0-1) Can shareholders hold Mr. James liable for the damage the transaction caused to Buyer? (0- Liable if unfair or 2.0 2) prejudicial Can shareholders hold the other directors liable for the damage the transaction caused to Liable if negligent 1.0 Buyer (0-2) Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay profits made from the transaction upon a successful claim by Yes 1.0 shareholders? (0-1) Is Mr. James disqualified upon a successful claim by shareholders? (0-1) No 0.0 Can a court void the transaction upon a successful claim by shareholders? (0-2) Voidable if 1.0 negligently concluded Ease of shareholder suits index (0-10) 7.0 Before suing, can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Can the plaintiff obtain any documents from the defendant and witnesses at trial? (0-3) Documents that 1.0 the defendant relied on Can the plaintiff request categories of documents from the defendant without identifying No 0.0 specific ones? (0-1) Can the plaintiff directly question the defendant and witnesses at trial? (0-2) Yes 2.0 Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plaintiffs recover their legal expenses from the company? (0-2) Yes regardless of 2.0 outcome Extent of shareholder governance index (0-10) 6.3 Extent of shareholder rights index (0-10) 5.0 Does the sale of 51% of Buyer's assets require shareholder approval? No 0.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? Yes 1.0 Page 58 Doing Business 2019 Nigeria Do shareholders automatically receive preemption rights every time Buyer issues new No 0.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the affected Yes 1.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require No 0.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all or almost all members consent to add a No 0.0 new member? Assuming that Buyer is a limited company, must a member first offer to sell their interest to No 0.0 the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 5.0 Is it forbidden to appoint the same individual as CEO and chairperson of the board of No 0.0 directors? Must the board of directors include independent and nonexecutive board members? No 0.0 Can shareholders remove members of the board of directors without cause before the end Yes 1.0 of their term? Must the board of directors include a separate audit committee exclusively comprising board Yes 1.0 members? Must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Yes 1.0 Buyer? Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve No 0.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender offer to No 0.0 all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute profits within a maximum No 0.0 period set by law? Extent of corporate transparency index (0-10) 9.0 Must Buyer disclose direct and indirect beneficial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and Yes 1.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? No 0.0 Must a detailed notice of general meeting be sent 21 days before the meeting? Yes 1.0 Can shareholders representing 5% of Buyer’s share capital put items on the general meeting Yes 1.0 agenda? Must Buyer's annual financial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? Yes 1.0 Assuming that Buyer is a limited company, can members representing 5% put items on the Yes 1.0 meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual financial statements be Yes 1.0 audited by an external auditor? Page 59 Doing Business 2019 Nigeria Protecting Minority Investors - Kano Indicator Kano Sub-Saharan OECD high Best Regulatory Africa income Performance Extent of disclosure index (0-10) 7.0 5.5 6.5 10 (13 Economies) Extent of director liability index (0-10) 7.0 3.5 5.3 10 (Cambodia) Ease of shareholder suits index (0-10) 7.0 5.5 7.3 10 (Djibouti) Extent of shareholder rights index (0-10) 5.0 4.6 6.4 10 (Kazakhstan) Extent of ownership and control index (0-10) 5.0 3.4 5.4 None in 2017/18 Extent of corporate transparency index (0-10) 9.0 4.1 7.6 10 (6 Economies) Figure – Protecting Minority Investors in Kano and comparator economies – Ranking and Score DB 2019 Protecting Minority Investors Score 0 100 78.33: Kenya (Rank: 11) 75.00: United Kingdom (Rank: 15) 73.33: South Africa (Rank: 23) 66.67: Kano 66.67: Lagos Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores are the simple average of the scores for the extent of conflict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Kano and comparator economies – Measure of Quality Kano 9 7 7 5 5 7 Kenya 5 10 10 6 7 9 Lagos 9 7 7 5 5 7 South Africa 5 8 8 7 8 8 United Kingdom 8 7 10 5 7 8 OECD high income 7.4 5.5 6.5 5.2 6.3 7.4 Sub-Saharan Africa 4.3 3.6 5.6 3.4 4.7 5.6 0 5 10 15 20 25 30 35 40 45 50 Sub-Indicator Score Extent of corporate transparency index (0-10) Extent of director liability index (0-10) Extent of disclosure index (0-10) Extent of ownership and control index (0-10) Extent of shareholder rights index (0-10) Ease of shareholder suits index (0-10) Page 60 Doing Business 2019 Nigeria Details – Protecting Minority Investors in Kano – Measure of Quality Answer Score Extent of conflict of interest regulation index (0-10) 7 Extent of disclosure index (0-10) 7.0 Whose decision is sufficient to approve the Buyer-Seller transaction? (0-3) Shareholders 3.0 excluding interested parties Must an external body review the terms of the transaction before it takes place? (0-1) Yes 1.0 Must Mr. James disclose his conflict of interest to the board of directors? (0-2) Existence of a 1.0 conflict without any specifics Must Buyer disclose the transaction in periodic filings (e.g. annual reports)? (0-2) Disclosure on the 2.0 transaction and on the conflict of interest Must Buyer immediately disclose the transaction to the public? (0-2) No disclosure 0.0 obligation Extent of director liability index (0-10) 7.0 Can shareholders representing 10% of Buyer's share capital sue for the damage the Yes 1.0 transaction caused to Buyer? (0-1) Can shareholders hold Mr. James liable for the damage the transaction caused to Buyer? (0- Liable if unfair or 2.0 2) prejudicial Can shareholders hold the other directors liable for the damage the transaction caused to Liable if negligent 1.0 Buyer (0-2) Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay profits made from the transaction upon a successful claim by Yes 1.0 shareholders? (0-1) Is Mr. James disqualified upon a successful claim by shareholders? (0-1) No 0.0 Can a court void the transaction upon a successful claim by shareholders? (0-2) Voidable if 1.0 negligently concluded Ease of shareholder suits index (0-10) 7.0 Before suing, can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Can the plaintiff obtain any documents from the defendant and witnesses at trial? (0-3) Documents that 1.0 the defendant relied on Can the plaintiff request categories of documents from the defendant without identifying No 0.0 specific ones? (0-1) Can the plaintiff directly question the defendant and witnesses at trial? (0-2) Yes 2.0 Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plaintiffs recover their legal expenses from the company? (0-2) Yes regardless of 2.0 outcome Extent of shareholder governance index (0-10) 6.3 Extent of shareholder rights index (0-10) 5.0 Does the sale of 51% of Buyer's assets require shareholder approval? No 0.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? Yes 1.0 Page 61 Doing Business 2019 Nigeria Do shareholders automatically receive preemption rights every time Buyer issues new No 0.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the affected Yes 1.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require No 0.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all or almost all members consent to add a No 0.0 new member? Assuming that Buyer is a limited company, must a member first offer to sell their interest to No 0.0 the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 5.0 Is it forbidden to appoint the same individual as CEO and chairperson of the board of No 0.0 directors? Must the board of directors include independent and nonexecutive board members? No 0.0 Can shareholders remove members of the board of directors without cause before the end Yes 1.0 of their term? Must the board of directors include a separate audit committee exclusively comprising board Yes 1.0 members? Must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Yes 1.0 Buyer? Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve No 0.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender offer to No 0.0 all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute profits within a maximum No 0.0 period set by law? Extent of corporate transparency index (0-10) 9.0 Must Buyer disclose direct and indirect beneficial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and Yes 1.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? No 0.0 Must a detailed notice of general meeting be sent 21 days before the meeting? Yes 1.0 Can shareholders representing 5% of Buyer’s share capital put items on the general meeting Yes 1.0 agenda? Must Buyer's annual financial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? Yes 1.0 Assuming that Buyer is a limited company, can members representing 5% put items on the Yes 1.0 meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual financial statements be Yes 1.0 audited by an external auditor? Page 62 Doing Business 2019 Nigeria Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as the administrative burden of paying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit). The most recent round of data collection for the project was completed in May 2018 covering for the Paying Taxes indicator calendar year 2017 (January 1, 2017 – December 31, 2017). See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory contributions a 2017 (number per year adjusted for electronic medium size company must pay in a year, and measures the administrative burden and joint filing and payment) of paying taxes, contributions and dealing with postfiling processes. Information is also compiled on frequency of filing and payments, time taken to comply with tax • Total number of taxes and contributions paid or laws, time taken to comply with the requirements of postfiling processes and time withheld, including consumption taxes (value waiting. added tax, sales tax or goods and service tax) • Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: - TaxpayerCo is a medium-size business that started operations on January 1, 2016. Time required to comply with 3 major taxes It produces ceramic flowerpots and sells them at retail. All taxes and contributions (hours per year) recorded are paid in the second year of operation (calendar year 2017). Taxes and • Collecting information, computing tax payable mandatory contributions are measured at all levels of government. • Preparing separate tax accounting books, if The VAT refund process: required - In June 2017, TaxpayerCo. makes a large capital purchase: the value of the • Completing tax return, filing with agencies machine is 65 times income per capita of the economy. Sales are equally spread per month (1,050 times income per capita divided by 12) and cost of goods sold are • Arranging payment or withholding equally expensed per month (875 times income per capita divided by 12). The machinery seller is registered for VAT and excess input VAT incurred in June will be Total tax and contribution rate (% of commercial profits) fully recovered after four consecutive months if the VAT rate is the same for inputs, sales and the machine and the tax reporting period is every month. Input VAT will • Profit or corporate income tax exceed Output VAT in June 2017. • Social contributions, labor taxes paid by The corporate income tax audit process: employer - An error in calculation of income tax liability (for example, use of incorrect tax • Property and property transfer taxes depreciation rates, or incorrectly treating an expense as tax deductible) leads to an • Dividend, capital gains, financial transactions incorrect income tax return and a corporate income tax underpayment. TaxpayerCo. taxes discovered the error and voluntarily notified the tax authority. The value of the underpaid income tax liability is 5% of the corporate income tax liability • Waste collection, vehicle, road and other taxes due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax return, but within the tax assessment period. Postfiling Index • Time to comply with a VAT refund (hours) • Time to obtain a VAT refund (weeks) • Time to comply with a corporate income tax correction (hours) • Time to complete a corporate income tax correction (weeks) Page 63 Doing Business 2019 Nigeria Paying Taxes - Lagos Indicator Lagos Sub-Saharan OECD high Best Regulatory Africa income Performance Payments (number per year) 48 37.4 11.2 3 (Hong Kong SAR, China) Time (hours per year) 353 280.6 159.4 49 (Singapore) Total tax and contribution rate (% of profit) 34.8 46.8 39.8 26.1% (32 Economies) Postfiling index (0-100) 47.48 54.63 84.41 None in 2017/18 Figure – Paying Taxes in Lagos and comparator economies – Ranking and Score DB 2019 Paying Taxes Score 0 100 87.14: United Kingdom (Rank: 23) 81.13: South Africa (Rank: 46) 72.37: Kenya (Rank: 91) 54.26: Kano 53.31: Lagos Note: The ranking of economies on the ease of paying taxes is determined by sorting their scores for paying taxes. These scores are the simple average of the scores for each of the component indicators, with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax and contribution rate. The threshold is defined as the total tax and contribution rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax and contribution rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Lagos and comparator economies – Measure of Quality 100 80 71.00 Index score 62.03 60.28 60 54.63 47.48 47.48 40 20 0 Lagos Kenya South Africa United Kingdom Kano Sub-Saharan Africa Page 64 Doing Business 2019 Nigeria Details – Paying Taxes in Lagos Tax or Payments Notes on Time Statutory Tax base Total tax Notes on mandatory (number) Payments (hours) tax rate and TTCR contribution contribution rate (% of profit) Corporate 1.0 71.0 30% taxable profit 18.07 income tax Social 1.0 online 156.0 10% gross salaries 11.28 Security Contributions Tertiary 0.0 jointly 2% taxable profit 2.41 education trust fund contribution Training Tax 1.0 1% gross salaries 1.13 Employee 12.0 1% gross salaries 1.13 Compensatio n Contribution paid by the employer Capital gains 1.0 10% capital gains 0.47 tax Tax on money 0.0 withheld 10% interest 0.26 not included market income interest Land Use 1.0 0.00132 property 0.20 Charge value Stamp duty 1.0 0.2% 2/1000 of 0.08 on checks value of check Road license 1.0 NGN 5,000 fixed fee 0.04 per vehicle depending on type of vehicle State 1.0 NGN 5,000 fixed fee 0.02 business levy Stamp duty 1.0 NGN 50 Deposit of 0.00 small amount on contracts NGN 1,000 or more Value added 12.0 126.0 5% value added 0.00 not included tax (VAT) National 12.0 2.5% gross salaries 0.00 withheld Housing Fund Advertising 1.0 various rates 0.00 small amount tax Employee 0.0 jointly 0.00 withheld labor tax Fuel tax 1.0 included in 0.00 fuel price Infrastructure 1.0 NGN 100 per fixed fee 0.00 withheld Development employee Tax Totals 48 353 34.8 Page 65 Doing Business 2019 Nigeria Details – Paying Taxes in Lagos – Tax by Type Taxes by type Answer Profit tax (% of profit) 21 Labor tax and contributions (% of profit) 13.5 Other taxes (% of profit) 0.3 Page 66 Doing Business 2019 Nigeria Details – Paying Taxes in Lagos – Measure of Quality Answer Score Postfiling index (0-100) 47.48 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? No Restrictions on VAT refund process Input tax on capital purchase is irrecoverable Percentage of cases exposed to a VAT audit (%) Not applicable Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) No VAT refund 0 per case study scenario Time to obtain a VAT refund (weeks) No VAT refund 0 per case study scenario Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 0% - 24% Time to comply with a corporate income tax correction (hours) 7.0 89.91 Time to complete a corporate income tax correction (weeks) No tax audit per 100 case study scenario Notes: Names of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax correction and time to complete a corporate income tax correction. N/A = Not applicable. Page 67 Doing Business 2019 Nigeria Paying Taxes - Kano Indicator Kano Sub-Saharan OECD high Best Regulatory Africa income Performance Payments (number per year) 48 37.4 11.2 3 (Hong Kong SAR, China) Time (hours per year) 328.5 280.6 159.4 49 (Singapore) Total tax and contribution rate (% of profit) 34.8 46.8 39.8 26.1% (32 Economies) Postfiling index (0-100) 47.48 54.63 84.41 None in 2017/18 Figure – Paying Taxes in Kano and comparator economies – Ranking and Score DB 2019 Paying Taxes Score 0 100 87.14: United Kingdom (Rank: 23) 81.13: South Africa (Rank: 46) 72.37: Kenya (Rank: 91) 54.26: Kano 53.31: Lagos Note: The ranking of economies on the ease of paying taxes is determined by sorting their scores for paying taxes. These scores are the simple average of the scores for each of the component indicators, with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax and contribution rate. The threshold is defined as the total tax and contribution rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax and contribution rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Kano and comparator economies – Measure of Quality 100 80 71.00 Index score 62.03 60.28 60 54.63 47.48 47.48 40 20 0 Kano Kenya South Africa United Kingdom Lagos Sub-Saharan Africa Page 68 Doing Business 2019 Nigeria Details – Paying Taxes in Kano Tax or Payments Notes on Time Statutory Tax base Total tax Notes on mandatory (number) Payments (hours) tax rate and TTCR contribution contribution rate (% of profit) Corporate 1.0 70.5 30% taxable profit 18.08 income tax Social 1.0 online 150.0 10% gross salaries 11.28 Security Contributions National 12.0 2.5% gross salaries 2.82 withheld Housing Fund Tertiary 0.0 jointly 2% taxable profit 2.41 education trust fund contribution Employee 0.0 jointly 2.34 withheld labor tax Employee 12.0 1% gross salaries 1.13 Compensatio n Contribution paid by the employer Training Tax 1.0 1% gross salaries 1.13 Capital gains 1.0 10% capital gains 0.47 tax Tax on money 0.0 withheld 10% interest 0.26 not included market income interest Land Use 1.0 0.125% property 0.19 Charge value Stamp duty 1.0 0.2% 2/1000 of 0.08 on checks value of check Road license 1.0 NGN 5,000 fixed fee 0.04 per vehicle depending on type of vehicle State 1.0 NGN 5,000 fixed fee 0.02 business levy Stamp duty 1.0 0.00 small amount on contracts Value added 12.0 108.0 5% value added 0.00 not included tax (VAT) Fuel tax 1.0 included in 0.00 fuel price Infrastructure 1.0 NGN 500 per fixed fee 0.00 withheld Development employee Tax Advertising 1.0 various rates 0.00 small amount tax Totals 48 328.5 34.8 Page 69 Doing Business 2019 Nigeria Details – Paying Taxes in Kano – Tax by Type Taxes by type Answer Profit tax (% of profit) 21 Labor tax and contributions (% of profit) 13.5 Other taxes (% of profit) 0.3 Page 70 Doing Business 2019 Nigeria Details – Paying Taxes in Kano – Measure of Quality Answer Score Postfiling index (0-100) 47.48 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? No Restrictions on VAT refund process Input tax on capital purchase is irrecoverable Percentage of cases exposed to a VAT audit (%) Not applicable Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) No VAT refund 0 per case study scenario Time to obtain a VAT refund (weeks) No VAT refund 0 per case study scenario Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 0% - 24% Time to comply with a corporate income tax correction (hours) 7.0 89.91 Time to complete a corporate income tax correction (weeks) No tax audit per 100 case study scenario Notes: Names of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax correction and time to complete a corporate income tax correction. N/A = Not applicable. Page 71 Doing Business 2019 Nigeria Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: • Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 days are or border handling in origin economy recorded as 22×24=528 hours). If customs clearance takes 7.5 hours, the data are • Obtaining, preparing and submitting documents recorded as is. Alternatively, suppose documents are submitted to a customs agency required by destination economy and any transit at 8:00a.m., are processed overnight and can be picked up at 8:00a.m. the next day. economies The time for customs clearance would be recorded as 24 hours because the actual procedure took 24 hours. • Covers all documents required by law and in practice, including electronic submissions of Cost: Insurance cost and informal payments for which no receipt is issued are information excluded from the costs recorded. Costs are reported in U.S. dollars. Contributors Border compliance are asked to convert local currency into U.S. dollars based on the exchange rate prevailing on the day they answer the questionnaire. Contributors are private sector • Customs clearance and inspections experts in international trade logistics and are informed about exchange rates. • Inspections by other agencies (if applied to more than 20% of shipments) Assumptions of the case study: - For all 190 economies covered by Doing Business, it is assumed a shipment is in a • Handling and inspections that take place at the warehouse in the largest business city of the exporting economy and travels to a economy’s port or border warehouse in the largest business city of the importing economy. - It is assumed each economy imports 15 metric tons of containerized auto parts (HS Domestic transport 8708) from its natural import partner—the economy from which it imports the largest • Loading or unloading of the shipment at the value (price times quantity) of auto parts. It is assumed each economy exports the warehouse or port/border product of its comparative advantage (defined by the largest export value) to its • Transport between warehouse and port/border natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. • Traffic delays and road police checks while - The mode of transport is the one most widely used for the chosen export or import shipment is en route product and the trading partner, as is the seaport or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 72 Doing Business 2019 Nigeria Trading across Borders - Lagos Indicator Lagos Sub-Saharan OECD high Best Regulatory Africa income Performance Time to export: Border compliance (hours) 135 97.3 12.5 1 (19 Economies) Cost to export: Border compliance (USD) 786 605.8 139.1 0 (19 Economies) Time to export: Documentary compliance (hours) 119 72.8 2.4 1 (26 Economies) Cost to export: Documentary compliance (USD) 250 168.8 35.2 0 (20 Economies) Time to import: Border compliance (hours) 264 126.3 8.5 0 (25 Economies) Cost to import: Border compliance (USD) 1077 684.3 100.2 0 (28 Economies) Time to import: Documentary compliance (hours) 144 97.7 3.4 1 (30 Economies) Cost to import: Documentary compliance (USD) 564 283.5 24.9 0 (30 Economies) Figure – Trading across Borders in Lagos and comparator economies – Ranking and Score DB 2019 Trading Across Borders Score 0 100 93.76: United Kingdom (Rank: 30) 68.06: Kenya (Rank: 112) 59.64: South Africa (Rank: 143) 23.08: Kano 23.08: Lagos Note: The ranking of economies on the ease of trading across borders is determined by sorting their scores for trading across borders. These scores are the simple average of the scores for the time and cost for documentary compliance and border compliance to export and import. Figure – Trading across Borders in Lagos – Time and Cost Time (hours) Cost (USD) 300 1200 264 1077 250 1000 Time (hours) 786 Cost (USD) 200 800 135 144 564 150 600 119 100 400 250 50 200 0 0 Export Export Import Import - - - - Border Documentary Border Documentary Compliance Compliance Compliance Compliance Page 73 Doing Business 2019 Nigeria Details – Trading across Borders in Lagos Characteristics Export Import Product HS 40: Rubber and articles thereof HS 8708: Parts and accessories of motor vehicles Trade partner United Kingdom Japan Border Apapa port Apapa port Distance (km) 11 11 Domestic transport time (hours) 72 72 Domestic transport cost (USD) 650 650 Details – Trading across Borders in Lagos – Components of Border Compliance Time to Complete (hours) Associated Costs (USD) Export: Clearance and inspections required 107.0 382.1 by customs authorities Export: Clearance and inspections required 0.0 0.0 by agencies other than customs Export: Port or border handling 63.4 403.6 Import: Clearance and inspections required 170.0 400.0 by customs authorities Import: Clearance and inspections required 24.0 150.0 by agencies other than customs Import: Port or border handling 105.7 526.8 Page 74 Doing Business 2019 Nigeria Details – Trading across Borders in Lagos – Trade Documents Export Import Bill of lading Bill of lading Certificate of origin Cargo Release Order Commercial invoice Combined Certificate of Value and Origin (CCVO) Single Goods Declaration (SGD) Form C 2010 Commercial invoice Nigerian Export Proceeds Form (NXP Form) Exit Gate Clean Certificate of Inspection (CCI) e-Form "M" (valid for foreign exchange) Packing list Manufacturer's certificate of production or SONCAP Terminal handling receipt Packing list Request for information (RFI) Payment receipt of customs fees and duties SOLAS certificate Pre-Arrival Assessment Report (PAAR) Single Goods Declaration (SGD) Terminal handling receipts Product Certificate 1 (Unregistered Status) SOLAS certificate Page 75 Doing Business 2019 Nigeria Trading across Borders - Kano Indicator Kano Sub-Saharan OECD high Best Regulatory Africa income Performance Time to export: Border compliance (hours) 135 97.3 12.5 1 (19 Economies) Cost to export: Border compliance (USD) 786 605.8 139.1 0 (19 Economies) Time to export: Documentary compliance (hours) 119 72.8 2.4 1 (26 Economies) Cost to export: Documentary compliance (USD) 250 168.8 35.2 0 (20 Economies) Time to import: Border compliance (hours) 264 126.3 8.5 0 (25 Economies) Cost to import: Border compliance (USD) 1077 684.3 100.2 0 (28 Economies) Time to import: Documentary compliance (hours) 144 97.7 3.4 1 (30 Economies) Cost to import: Documentary compliance (USD) 564 283.5 24.9 0 (30 Economies) Figure – Trading across Borders in Kano and comparator economies – Ranking and Score DB 2019 Trading Across Borders Score 0 100 93.76: United Kingdom (Rank: 30) 68.06: Kenya (Rank: 112) 59.64: South Africa (Rank: 143) 23.08: Kano 23.08: Lagos Note: The ranking of economies on the ease of trading across borders is determined by sorting their scores for trading across borders. These scores are the simple average of the scores for the time and cost for documentary compliance and border compliance to export and import. Figure – Trading across Borders in Kano – Time and Cost Time (hours) Cost (USD) 300 1200 264 1077 250 1000 Time (hours) 786 Cost (USD) 200 800 135 144 564 150 600 119 100 400 250 50 200 0 0 Export Export Import Import - - - - Border Documentary Border Documentary Compliance Compliance Compliance Compliance Page 76 Doing Business 2019 Nigeria Details – Trading across Borders in Kano Characteristics Export Import Product HS 40: Rubber and articles thereof HS 8708: Parts and accessories of motor vehicles Trade partner United Kingdom Japan Border Apapa port Apapa port Distance (km) 1002 1002 Domestic transport time (hours) 135 135 Domestic transport cost (USD) 1650 1650 Details – Trading across Borders in Kano – Components of Border Compliance Time to Complete (hours) Associated Costs (USD) Export: Clearance and inspections required 107.0 382.1 by customs authorities Export: Clearance and inspections required 0.0 0.0 by agencies other than customs Export: Port or border handling 63.4 403.6 Import: Clearance and inspections required 170.0 400.0 by customs authorities Import: Clearance and inspections required 24.0 150.0 by agencies other than customs Import: Port or border handling 105.7 526.8 Page 77 Doing Business 2019 Nigeria Details – Trading across Borders in Kano – Trade Documents Export Import Bill of lading Bill of lading Certificate of origin Cargo Release Order Commercial invoice Combined Certificate of Value and Origin (CCVO) Single Goods Declaration (SGD) Form C 2010 Commercial invoice Nigerian Export Proceeds Form (NXP Form) Exit Gate Clean Certificate of Inspection (CCI) e-Form "M" (valid for foreign exchange) Packing list Manufacturer's certificate of production or SONCAP Terminal handling receipt Packing list Request for information (RFI) Payment receipt of customs fees and duties SOLAS certificate Pre-Arrival Assessment Report (PAAR) Single Goods Declaration (SGD) Terminal handling receipts Product Certificate 1 (Unregistered Status) SOLAS certificate Page 78 Doing Business 2019 Nigeria Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. The most recent round of data collection was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract between 2 courts (calendar days) domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt • Time to file and serve the case enforcement. • Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses several • Time to enforce the judgment assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller and courts (% of claim) Buyer), both located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. • Attorney fees - The buyer orders custom-made goods, then fails to pay alleging that the goods are • Court fees not of adequate quality. - The value of the dispute is 200% of the income per capita or the equivalent in local • Enforcement fees currency of USD 5,000, whichever is greater. - The seller sues the buyer before the court with jurisdiction over commercial cases Quality of judicial processes index (0-18) worth 200% of income per capita or $5,000. • Court structure and proceedings (-1-5) - The seller requests the pretrial attachment of the defendant’s movable assets to secure the claim. • Case management (0-6) - The dispute on the quality of the goods requires an expert opinion. • Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. • Alternative dispute resolution (0-3) - The seller enforces the judgment through a public sale of the buyer’s movable assets. Page 79 Doing Business 2019 Nigeria Enforcing Contracts - Lagos Standardized Case Claim value NGN 1,100,778 Court name Lagos Magistrates Court, Small Claims Court City Covered Lagos Indicator Lagos Sub-Saharan OECD high Best Regulatory Africa income Performance Time (days) 447 655.1 582.4 None in 2017/18 Cost (% of claim value) 42.0 42.3 21.2 None in 2017/18 Quality of judicial processes index (0-18) 8.5 6.7 11.5 None in 2017/18 Figure – Enforcing Contracts in Lagos and comparator economies – Ranking and Score DB 2019 Enforcing Contracts Score 0 100 68.69: United Kingdom (Rank: 32) 58.37: Kano 58.27: Kenya (Rank: 88) 57.76: Lagos 54.10: South Africa (Rank: 115) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average of the scores for each of the component indicators. Figure – Enforcing Contracts in Lagos – Time and Cost Time (days) Cost (% of claim value) 700 655.1 45.7 50 Cost (% of claim value) 41.8 42.0 582.4 600 42.3 600 40 500 476 465 33.2 Time (days) 447 437 28.4 30 400 21.2 300 20 200 10 100 0 0 Kano Kenya Lagos OECD South Sub-Saharan United high Africa Africa Kingdom income Page 80 Doing Business 2019 Nigeria Figure – Enforcing Contracts in Lagos and comparator economies – Measure of Quality Lagos 2.5 1.5 0 4.5 Kano 2.5 1 0 3 Kenya 2 2 0.5 4.5 South Africa 2.5 2 0.5 2 United Kingdom 2 5 3.5 4.5 OECD high income 2.5 3.1 2.3 3.6 Sub-Saharan Africa 2.2 1.1 0.3 3.1 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Alternative dispute resolution (0-3) Case management (0-6) Court automation (0-4) Court structure and proceedings (-1-5) Details – Enforcing Contracts in Lagos Indicator Time (days) 447 Filing and service 40 Trial and judgment 265 Enforcement of judgment 142 Cost (% of claim value) 42.0 Attorney fees 25 Court fees 12 Enforcement fees 5 Quality of judicial processes index (0-18) 8.5 Court structure and proceedings (-1-5) 4.5 Case management (0-6) 1.5 Court automation (0-4) 0.0 Alternative dispute resolution (0-3) 2.5 Page 81 Doing Business 2019 Nigeria Details – Enforcing Contracts in Lagos – Measure of Quality Answer Score Quality of judicial processes index (0-18) 8.5 Court structure and proceedings (-1-5) 4.5 1. Is there a court or division of a court dedicated solely to hearing commercial cases? Yes 1.5 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, but manual 0.5 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 1.5 1. Time standards 1.0 1.a. Are there laws setting overall time standards for key court events in a civil Yes case? 1.b. If yes, are the time standards set for at least three court events? Yes 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.5 2.a. Does the law regulate the maximum number of adjournments that can be Yes granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? Yes 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? No 3. Can two of the following four reports be generated about the competent court: (i) time to No 0.0 disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the No 0.0 competent court? 5. Are there any electronic case management tools in place within the competent court for No 0.0 use by judges? 6. Are there any electronic case management tools in place within the competent court for No 0.0 use by lawyers? Court automation (0-4) 0.0 1. Can the initial complaint be filed electronically through a dedicated platform within the no 0.0 competent court? 2. Is it possible to carry out service of process electronically for claims filed before the No 0.0 competent court? 3. Can court fees be paid electronically within the competent court? No 0.0 4. Publication of judgments 0.0 4.a Are judgments rendered in commercial cases at all levels made available to the No general public through publication in official gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme No court level made available to the general public through publication in official gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.5 1. Arbitration 1.5 Page 82 Doing Business 2019 Nigeria 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 1.0 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there financial incentives for parties to attempt mediation or conciliation No (i.e., if mediation or conciliation is successful, a refund of court filing fees, income tax credits or the like)? Page 83 Doing Business 2019 Nigeria Enforcing Contracts - Kano Standardized Case Claim value NGN 1,100,778 Court name Kano Magistrates Court City Covered Kano Indicator Kano Sub-Saharan OECD high Best Regulatory Africa income Performance Time (days) 476 655.1 582.4 None in 2017/18 Cost (% of claim value) 28.4 42.3 21.2 None in 2017/18 Quality of judicial processes index (0-18) 6.5 6.7 11.5 None in 2017/18 Figure – Enforcing Contracts in Kano and comparator economies – Ranking and Score DB 2019 Enforcing Contracts Score 0 100 68.69: United Kingdom (Rank: 32) 58.37: Kano 58.27: Kenya (Rank: 88) 57.76: Lagos 54.10: South Africa (Rank: 115) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average of the scores for each of the component indicators. Figure – Enforcing Contracts in Kano – Time and Cost Time (days) Cost (% of claim value) 700 655.1 45.7 50 Cost (% of claim value) 41.8 42.0 582.4 600 42.3 600 40 500 476 465 33.2 Time (days) 447 437 28.4 30 400 21.2 300 20 200 10 100 0 0 Kano Kenya Lagos OECD South Sub-Saharan United high Africa Africa Kingdom income Page 84 Doing Business 2019 Nigeria Figure – Enforcing Contracts in Kano and comparator economies – Measure of Quality Kano 2.5 1 0 3 Kenya 2 2 0.5 4.5 Lagos 2.5 1.5 0 4.5 South Africa 2.5 2 0.5 2 United Kingdom 2 5 3.5 4.5 OECD high income 2.5 3.1 2.3 3.6 Sub-Saharan Africa 2.2 1.1 0.3 3.1 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Alternative dispute resolution (0-3) Case management (0-6) Court automation (0-4) Court structure and proceedings (-1-5) Details – Enforcing Contracts in Kano Indicator Time (days) 476 Filing and service 21 Trial and judgment 365 Enforcement of judgment 90 Cost (% of claim value) 28.4 Attorney fees 10 Court fees 11.3 Enforcement fees 7.1 Quality of judicial processes index (0-18) 6.5 Court structure and proceedings (-1-5) 3.0 Case management (0-6) 1.0 Court automation (0-4) 0.0 Alternative dispute resolution (0-3) 2.5 Page 85 Doing Business 2019 Nigeria Details – Enforcing Contracts in Kano – Measure of Quality Answer Score Quality of judicial processes index (0-18) 6.5 Court structure and proceedings (-1-5) 3.0 1. Is there a court or division of a court dedicated solely to hearing commercial cases? No 0.0 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, but manual 0.5 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 1.0 1. Time standards 1.0 1.a. Are there laws setting overall time standards for key court events in a civil Yes case? 1.b. If yes, are the time standards set for at least three court events? Yes 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.0 2.a. Does the law regulate the maximum number of adjournments that can be Yes granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? No 3. Can two of the following four reports be generated about the competent court: (i) time to No 0.0 disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the No 0.0 competent court? 5. Are there any electronic case management tools in place within the competent court for No 0.0 use by judges? 6. Are there any electronic case management tools in place within the competent court for No 0.0 use by lawyers? Court automation (0-4) 0.0 1. Can the initial complaint be filed electronically through a dedicated platform within the no 0.0 competent court? 2. Is it possible to carry out service of process electronically for claims filed before the No 0.0 competent court? 3. Can court fees be paid electronically within the competent court? No 0.0 4. Publication of judgments 0.0 4.a Are judgments rendered in commercial cases at all levels made available to the No general public through publication in official gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme No court level made available to the general public through publication in official gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.5 1. Arbitration 1.5 Page 86 Doing Business 2019 Nigeria 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 1.0 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there financial incentives for parties to attempt mediation or conciliation No (i.e., if mediation or conciliation is successful, a refund of court filing fees, income tax credits or the like)? Page 87 Doing Business 2019 Nigeria Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are used: • Measured in calendar years • Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotel experiences financial difficulties. Cost required to recover debt (% of debtor’s - The value of the hotel is 100% of the income per capita or the equivalent in local estate) currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over the hotel’s • Measured as percentage of estate value real estate. The hotel cannot pay back the loan, but makes enough money to • Court fees operate otherwise. • Fees of insolvency administrators In addition, Doing Business evaluates the quality of legal framework applicable to • Lawyers’ fees judicial liquidation and reorganization proceedings and the extent to which best • Assessors’ and auctioneers’ fees insolvency practices have been implemented in each economy covered. • Other related fees Outcome • Whether business continues operating as a going concern or business assets are sold piecemeal Recovery rate for creditors • Measures the cents on the dollar recovered by secured creditors • Outcome for the business (survival or not) determines the maximum value that can be recovered • Official costs of the insolvency proceedings are deducted • Depreciation of furniture is taken into account • Present value of debt recovered Strength of insolvency framework index (0- 16) • Sum of the scores of four component indices: • Commencement of proceedings index (0-3) • Management of debtor’s assets index (0-6) • Reorganization proceedings index (0-3) • Creditor participation index (0-4) Page 88 Doing Business 2019 Nigeria Resolving Insolvency - Lagos Indicator Lagos Sub-Saharan OECD high Best Regulatory Africa income Performance Recovery rate (cents on the dollar) 27.5 20.3 70.5 None in 2017/18 Time (years) 2.0 2.9 1.7 0.4 (Ireland) Cost (% of estate) 22.0 22.7 9.3 1.0 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 5.0 6.4 11.9 None in 2017/18 Figure – Resolving Insolvency in Lagos and comparator economies – Ranking and Score DB 2019 Resolving Insolvency Score 0 100 80.27: United Kingdom (Rank: 14) 57.41: Kenya (Rank: 57) 54.49: South Africa (Rank: 66) 30.42: Kano 30.42: Lagos Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Lagos – Time and Cost Time (years) Cost (% of estate) 5 22.7 25 22.0 4.5 22.0 22.0 Cost (% of estate) 4 18.0 20 Time (years) 2.9 3 15 2.0 2.0 9.3 2.0 2 1.7 10 6.0 1.0 1 5 0 0 Kano Kenya Lagos OECD South Sub-Saharan United high Africa Africa Kingdom income Page 89 Doing Business 2019 Nigeria Figure – Resolving Insolvency in Lagos and comparator economies – Measure of Quality Lagos 2 2 1 0 Kano 2 2 1 0 Kenya 4 3 3 3 South Africa 6 3 2 0.5 United Kingdom 5 3 2 1 OECD high income 5.3 2.8 2.2 1.9 Sub-Saharan Africa 4.1 2.3 1 0.5 0 2 4 6 8 10 12 14 Sub-Indicator Score Management of debtor's assets index (0-6) Commencement of proceedings index (0-3) Creditor participation index (0-4) Reorganization proceedings index (0-3) Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.” Figure – Resolving Insolvency in Lagos and comparator economies – Recovery Rate Recovery rate(cents on the dollar) 100 85.3 80 60 40 31.2 34.5 27.5 27.5 20.3 20 0 Lagos Kenya South Africa United Kingdom Kano Sub-Saharan Africa Page 90 Doing Business 2019 Nigeria Details – Resolving Insolvency in Lagos Indicator Answer Score Proceeding receivership Based on the case study assumptions, receivership is the most likely procedure to apply. The Bank will appoint a Receiver to sell the business and attempt to recover some of the debt’s value. The appointment of a Receiver needs to be validated by the court. There are two types of Receiver that can be nominated in a receivership proceeding (i) the regular Receiver, (ii) the Receiver manager. The regular Receiver will try to sell as many assets as he can to pay back the Bank, which could mean the end of the business in a majority of cases. A Receiver manager would keep the business alive and well but it is used for important cases and larger businesses. For such a small claim, the bank would go for a regular Receiver. Outcome piecemeal sale Upon completion of the receivership of Mirage, if the principal and the interest of the loan have been successfully repaid to BizBank, the hotel may be able to continue operating as a going concern. However, it is unlikely that the Receiver would manage it or try to save it: the business would be sold piecemeal. Time (in years) 2.0 A Receiver would be proposed by the Bank, then validated by the court, and the management of the company would be off, then the receiver would identify the assets and organize a sale. Two years would be a reasonable estimate. If the debtor resists (including the delays and appeals) during the process it could go up to 5 years. Cost (% of 22.0 The costs associated with the case would amount to approximately 22% of the value of the estate) debtor's estate. Cost incurred during the entire insolvency process mainly include attorney fees (8%), receiver fees(7%), fees of accountants, assessors, inspectors and other professionals (1- 3%), fees of auctioneers (2-3%), and cost of notification and publication (2-4%). Recovery rate 27.5 (cents on the dollar) Page 91 Doing Business 2019 Nigeria Details – Resolving Insolvency in Lagos – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 5.0 Commencement of proceedings index (0-3) 2.0 What procedures are available to a DEBTOR when commencing insolvency proceedings? (b) Debtor may 0.5 file for liquidation only Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? (b) Yes, but a 0.5 creditor may file for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 2.0 Does the insolvency framework allow the continuation of contracts supplying essential goods No 0.0 and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? No 0.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit after No 0.0 commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (c) No priority is 0.0 assigned to post- commencement creditors Reorganization proceedings index (0-3) 0.0 Which creditors vote on the proposed reorganization plan? N/A 0.0 Does the insolvency framework require that dissenting creditors in reorganization receive at No 0.0 least as much as what they would obtain in a liquidation? Are the creditors divided into classes for the purposes of voting on the reorganization plan, No 0.0 does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 1.0 Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request information No 0.0 from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to decisions Yes 1.0 accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.” Page 92 Doing Business 2019 Nigeria Resolving Insolvency - Kano Indicator Kano Sub-Saharan OECD high Best Regulatory Africa income Performance Recovery rate (cents on the dollar) 27.5 20.3 70.5 None in 2017/18 Time (years) 2.0 2.9 1.7 0.4 (Ireland) Cost (% of estate) 22.0 22.7 9.3 1.0 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 5.0 6.4 11.9 None in 2017/18 Figure – Resolving Insolvency in Kano and comparator economies – Ranking and Score DB 2019 Resolving Insolvency Score 0 100 80.27: United Kingdom (Rank: 14) 57.41: Kenya (Rank: 57) 54.49: South Africa (Rank: 66) 30.42: Kano 30.42: Lagos Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Kano – Time and Cost Time (years) Cost (% of estate) 5 22.7 25 22.0 4.5 22.0 22.0 Cost (% of estate) 4 18.0 20 Time (years) 2.9 3 15 2.0 2.0 9.3 2.0 2 1.7 10 6.0 1.0 1 5 0 0 Kano Kenya Lagos OECD South Sub-Saharan United high Africa Africa Kingdom income Page 93 Doing Business 2019 Nigeria Figure – Resolving Insolvency in Kano and comparator economies – Measure of Quality Kano 2 2 1 0 Kenya 4 3 3 3 Lagos 2 2 1 0 South Africa 6 3 2 0.5 United Kingdom 5 3 2 1 OECD high income 5.3 2.8 2.2 1.9 Sub-Saharan Africa 4.1 2.3 1 0.5 0 2 4 6 8 10 12 14 Sub-Indicator Score Management of debtor's assets index (0-6) Commencement of proceedings index (0-3) Creditor participation index (0-4) Reorganization proceedings index (0-3) Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.” Figure – Resolving Insolvency in Kano and comparator economies – Recovery Rate Recovery rate(cents on the dollar) 100 85.3 80 60 40 31.2 34.5 27.5 27.5 20.3 20 0 Kano Kenya South Africa United Kingdom Lagos Sub-Saharan Africa Page 94 Doing Business 2019 Nigeria Details – Resolving Insolvency in Kano Indicator Answer Score Proceeding receivership Based on the case study assumptions, receivership is the most likely procedure to apply. The Bank will appoint a Receiver to sell the business and attempt to recover some of the debt’s value. The appointment of a Receiver needs to be validated by the court. There are two types of Receiver that can be nominated in a receivership proceeding (i) the regular Receiver, (ii) the Receiver manager. The regular Receiver will try to sell as many assets as he can to pay back the Bank, which could mean the end of the business in a majority of cases. A Receiver manager would keep the business alive and well but it is used for important cases and larger businesses. For such a small claim, the bank would go for a regular Receiver. Outcome piecemeal sale Upon completion of the receivership of Mirage, if the principal and the interest of the loan have been successfully repaid to BizBank, the hotel may be able to continue operating as a going concern. However, it is unlikely that the Receiver would manage it or try to save it: the business would be sold piecemeal. Time (in years) 2.0 A Receiver would be proposed by the Bank, then validated by the court, and the management of the company would be off, then the receiver would identify the assets and organize a sale by using his network. In fact, it would not take more than a year if the receiver has a good network to find a buyer, and if the debtor does not fight the process. If the debtor resists (including the delays and appeals) during the process it could go indefinitely up to 5 years. Thus, on average 2 years would be a reasonable estimate. Cost (% of 22.0 The costs associated with the case would amount to approximately 22% of the value of the estate) debtor's estate. Cost incurred during the entire insolvency process mainly include attorney fees (8%), insolvency representative or receiver fees(7%), fees of accountants, assessors, inspectors and other professionals (1-3%), fees of auctioneers (2-3%), and cost of notification and publication (2-4%). Recovery rate 27.5 (cents on the dollar) Page 95 Doing Business 2019 Nigeria Details – Resolving Insolvency in Kano – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 5.0 Commencement of proceedings index (0-3) 2.0 What procedures are available to a DEBTOR when commencing insolvency proceedings? (b) Debtor may 0.5 file for liquidation only Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? (b) Yes, but a 0.5 creditor may file for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 2.0 Does the insolvency framework allow the continuation of contracts supplying essential goods No 0.0 and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? No 0.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit after No 0.0 commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (c) No priority is 0.0 assigned to post- commencement creditors Reorganization proceedings index (0-3) 0.0 Which creditors vote on the proposed reorganization plan? N/A 0.0 Does the insolvency framework require that dissenting creditors in reorganization receive at No 0.0 least as much as what they would obtain in a liquidation? Are the creditors divided into classes for the purposes of voting on the reorganization plan, No 0.0 does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 1.0 Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request information No 0.0 from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to decisions Yes 1.0 accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.” Page 96 Doing Business 2019 Nigeria Labor Market Regulation Doing Business presents detailed data for the labor market regulation indicators on the Doing Business website (http://www.doingbusiness.org). The report does not present rankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business. The most recent round of data collection was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions about the (i) whether fixed-term contracts are prohibited for worker and the business are used. permanent tasks; (ii) maximum cumulative duration of fixed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether - Operates a supermarket or grocery store in the economy’s largest business city. nonpregnant and nonnursing women can work For 11 economies the data are also collected for the second largest business city. same night hours as men; (v) length of paid annual - Has 60 employees. leave. - Is subject to collective bargaining agreements if such agreements cover more than 50% of the food retail sector and they apply even to firms that are not party to them. Redundancy rules - Abides by every law and regulation but does not grant workers more benefits than (i) whether redundancy can be basis for terminating those mandated by law, regulation or (if applicable) collective bargaining workers; (ii) whether employer needs to notify agreements. and/or get approval from third party to terminate 1 redundant worker and a group of 9 redundant workers; (iii) whether law requires employer to reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity leave; (iv) whether employees on maternity leave receive 100% of wages; (v) availability of five fully paid days of sick leave a year; (vi) eligibility requirements for unemployment protection. Page 97 Doing Business 2019 Nigeria Labor Market Regulation - Lagos Details – Labor Market Regulation in Lagos Answer Hiring Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single fixed-term contract (months) No limit Maximum length of fixed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 64.2 Ratio of minimum wage to value added per worker 0.2 Maximum length of probationary period (months) n.a. Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 0.0 Premium for overtime work (% of hourly pay) 0.0 Restrictions on night work? No Whether nonpregnant and nonnursing women can work the same night hours as men Yes Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 6.0 Paid annual leave for a worker with 5 years of tenure (working days) 6.0 Paid annual leave for a worker with 10 years of tenure (working days) 6.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 6.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party notification if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party notification if nine workers are dismissed? Yes Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? Yes Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 1.0 Notice period for redundancy dismissal for a worker with 5 years of tenure 4.3 Notice period for redundancy dismissal for a worker with 10 years of tenure 4.3 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 3.2 Severance pay for redundancy dismissal for a worker with 1 year of tenure 0.0 Page 98 Doing Business 2019 Nigeria Severance pay for redundancy dismissal for a worker with 5 years of tenure 0.0 Severance pay for redundancy dismissal for a worker with 10 years of tenure 0.0 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 0.0 Job quality Equal remuneration for work of equal value? No Gender nondiscrimination in hiring? No Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 84.0 Receive 100% of wages on maternity leave? No Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? No Minimum contribution period for unemployment protection (months)? n.a. Page 99 Doing Business 2019 Nigeria Labor Market Regulation - Kano Details – Labor Market Regulation in Kano Answer Hiring Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single fixed-term contract (months) No limit Maximum length of fixed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 64.2 Ratio of minimum wage to value added per worker 0.2 Maximum length of probationary period (months) n.a. Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 0.0 Premium for overtime work (% of hourly pay) 0.0 Restrictions on night work? No Whether nonpregnant and nonnursing women can work the same night hours as men Yes Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 6.0 Paid annual leave for a worker with 5 years of tenure (working days) 6.0 Paid annual leave for a worker with 10 years of tenure (working days) 6.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 6.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party notification if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party notification if nine workers are dismissed? Yes Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? Yes Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 1.0 Notice period for redundancy dismissal for a worker with 5 years of tenure 4.3 Notice period for redundancy dismissal for a worker with 10 years of tenure 4.3 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 3.2 Severance pay for redundancy dismissal for a worker with 1 year of tenure 0.0 Page 100 Doing Business 2019 Nigeria Severance pay for redundancy dismissal for a worker with 5 years of tenure 0.0 Severance pay for redundancy dismissal for a worker with 10 years of tenure 0.0 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 0.0 Job quality Equal remuneration for work of equal value? No Gender nondiscrimination in hiring? No Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 84.0 Receive 100% of wages on maternity leave? No Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? No Minimum contribution period for unemployment protection (months)? n.a. Page 101 Doing Business 2019 Nigeria Business Reforms in Nigeria In the past year, Doing Business observed a peaking of reform activity worldwide. From June 2, 2017, to May 1, 2018, 128 economies implemented a record 314 regulatory reforms improving the business climate. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more difficult to do business. DB2019 Starting a Business: Nigeria made starting a business easier by reducing the time needed to register a company at the corporate affairs commission and introducing an online platform to pay stamp duty. This reform applies to both Kano and Lagos. Getting Electricity: Nigeria made getting electricity easier by requiring that the distribution companies obtain the right of way on behalf of the customers and by turning on the electricity once the meter is installed. This reform applies to both Kano and Lagos. Registering Property: Nigeria (Kano) made property registration less transparent by no longer publishing online the fee schedule and the list of documents necessary to register a property Trading across Borders: Nigeria reduced the time needed to export and import by implementing joint inspections, the NICIS2 electronic system and around-the-clock operations at Apapa Port. This reform applies to both Kano and Lagos. Enforcing Contracts: Nigeria (Lagos) made enforcing contracts easier by issuing new rules of civil procedure for small claims courts which limit adjournments to unforeseen and exceptional circumstances. DB2018 Starting a Business: Nigeria made starting a business faster by allowing electronic stamping of registration documents. This reform applies to both Kano and Lagos. Dealing with Construction Permits: Nigeria (Kano) increased transparency by publishing all relevant regulations, fee schedules and pre- application requirements online. Nigeria (Lagos) made is easier to obtain construction permits by streamlining the process to obtain construction permits and increased transparency by publishing all relevant regulations, fee schedules and pre-application requirements online. Registering Property: Nigeria, Lagos made transferring property easier and more transparent by removing the sworn affidavit for certified copies of the land ownership records, introducing a specific and independent complaint mechanism, and by publishing statistics on land transfers. Nigeria, Kano made transferring property more transparent by publishing the list documents, fee schedule and service standards for property transactions. Getting Credit: Nigeria improved access to credit information by guaranteeing borrowers the legal right to inspect their credit data from the credit bureau and by starting to provide credit scores to banks, financial institutions and borrowers. Nigeria also strengthened access to credit by adopting a new law on secured transactions and establishing a modern collateral registry. These changes apply to both Kano and Lagos. Paying Taxes: Nigeria made paying taxes easier by introducing new channels for payment of taxes and mandating taxpayers to file tax returns at the nearest "Federal Inland Revenue Service (FIRS)" office. This reform applies to both Kano and Lagos. DB2017 Starting a Business: Nigeria made starting a business easier by improving online government portals . This reform applies to both Kano and Lagos. DB2016 Registering Property: Nigeria made transferring property in Lagos less costly by reducing fees for property transactions. Protecting Minority Investors: Nigeria strengthened minority investor protections by requiring that related-party transactions be subject to external review and to approval by disinterested shareholders. This reform applies to both Kano and Lagos. DB2013 Getting Credit: Nigeria improved access to credit information by distributing credit information from retail companies. Paying Taxes: Nigeria introduced a new compulsory labor contribution paid by the employer. DB2010 Getting Credit: Nigeria improved its credit information system through a central bank guideline defining the licensing, operational and regulatory requirements for a privately owned credit bureau. Page 102 Doing Business 2019 Nigeria DB2009 Trading across Borders: Nigeria speeded up exporting and importing by upgrading facilities at Apapa port in Lagos. DB2008 Starting a Business: Nigeria made starting a business easier by introducing an online system for company name search and increasing efficiency at the company registry. Dealing with Construction Permits: Nigeria made dealing with construction permits easier by setting an official time limit for issuing permits Page 103 Doing Business 2019 Nigeria Page 104