I was recently invited to a meeting of Commonwealth Alliance of Young Entrepreneurs – West Africa (CAYE – WA) which held in Lagos, Nigeria. The meeting focused on the challenges of young entrepreneurs and seeks to identify what government can do to make it easier for young people to do business.
There are several things the government can do and I know most people will be looking at financing, infrastructure and a few other things. Financing and infrastructure are important but there are a a few simple, yet frustrating, issues that the government can handle, if at all it understands the possible impact of young entrepreneurs in any nation.
The issues I think the government can address speedily include but not limited to:
1. Many young entrepreneurs are struggling to raise the required funds for business registration. In some cases, the cost of a business registration either as a venture/enterprise or limited liability company is what the entrepreneur needs to start a business. Why then should a young entrepreneur spend his or her capital on registration and be left with nothing? For this reason, a number of people are no longer considering registering their businesses. This limits their opportunities because they can’t do many business transactions without proof of registration. The government needs to bring down the cost of registering a business as a to encourage many more young entrepreneurs. They should have to choose between their capital or cost of registering the business.
2. The procedure for registering a business, for instance in Nigeria, is still too tedious and usually takes about three to four weeks, if something does not go wrong. Several people have tried unsuccessfully to register a business within a month. There are still too many physical paper work involved when the government can take business registrations online. Time wasted trying to register a business is delimited and the process becomes effective. The registration can be done with 48 hours with autogenerated certificates of incorporation and physical certificates ready within a week. Many more people will be encouraged to register their businesses when it becomes easy to do so online.
3. The government, Central Bank of Nigeria (CBN) and the commercial banks should make it a lot easier to open corporate bank accounts and this should be done within 48 hours or at most a week. The banks still give too many headaches to young entrepreneurs who want to run corporate accounts. Sadly, the bottlenecks are mostly as a result of policies from the central bank.
4. For so long, I knew about the Federal Inland Revenue Service but didn’t know their relevance to my business. When I eventually checked out their website, most of the addresses listed had changed. How can they have a website with old addresses? Many young entrepreneurs who have registered businesses and corporate accounts have not had any dealing with the Federal Inland Revenue Service (FIRS) and state internal revenue service in various states. Recently, the CBN in Nigeria introduced the policy of obtaining Tax Identification Number (TIN) before registered businesses can open corporate accounts. The FIRS has done very little in orienting young entrepreneurs about its activities and what needs to be done. They have a website but it is hardly update with relevant information. They should go online, update their websites with relevant addresses and let people register online for VAT or Tax Identification Number (TIN). We should also be able to file taxes online.
5. Since young entrepreneurs and small businesses are being killed by cost of rent, government can consider converting a lot of its abandoned buildings to office hubs for start ups. There are to many buildings, in Nigeria, that are owned by the Federal Government being put to good use. The government also has some from of presence in every part of the country with many office spaces. Entrepreneurs can be encouraged with office spaces coming at a reduced rate.
6. Central Bank of Nigeria (CBN) policies need to be revamped regarding the issue of foreign exchange, financial inclusion and cashless economy.
– On cashless policy:
A. Reduce the denominations we have in circulation and see how it psychologically forces down the prices of some goods;
B. Encourage the use of POS with very little charges on the services providers;
C. Drive the orientation on mobile money. We can’t talk cashless economy when I still can’t pay the cab driver, bread seller, soft drink seller, grocery store keeper and stationery store keeper with my debit cards, mobile money or email payment system.
7. The government should do it’s regulatory job effectively through the Nigeria Communications Commission (NCC) over the telecoms companies. This translates to start ups being able to work from wherever they are and cutting the cost of renting an office space, especially if you don’t need it, and traveling around with several hours lost to traffic.
8. The rigid Corporate Affairs Commission (CAC) approach and bottle necks regarding registering professional businesses – media, training, consulting and others – needs to be revisited. This is discouraging some from registering their businesses.
9. The National Assembly – Senate and House of Representatives – should have an open session for youths and spend the day listening to real youths on their challenges, solutions and possible policies that can help the businesses of young people.
There are several other simple things that the government can do without breaking a sweat. It will help to start with the few things listed above and be should be very serious about this. Once we fix these, there a number of things that will fall into place.
Fola Daniel Adelesi