Business Environment of Nigeria
Nigeria is a country in Africa, West Africa. It is among the countries projected to have the potential to become one of the world’s economic leaders in the 21st century. Nigeria relies heavily on natural resources, more so oil. However, corruption, poor management, political instability, and poor infrastructure inhibit the country’s economic growth. The economy is thus classified as an emerging market (The Heritage Foundation, n.d). Over the past few years, since 2007, Nigeria has experienced arising GDP and the government has been trying to regulate inflation and has enacted new policies that have helped improve the country’s financial position(The Heritage Foundation, n.d).
Nigeria offers a hospitable environment for investments, however, the existing hindrances, inadequate utilities, poor infrastructure and corruption, prevents industrialists from investing in the country. Moreover, the various ethnic groups living in the country have seen investors developunique analytical tools and strategies to effectively manage businesses.
Business Environment of UK
The UK economy has beenrecuperatingover the past years after a undergoing a significant downturn. The economic recession experienced in 2008 shrunk the GDP by 0.8% in 2008 and by 5.2% in 2009. The economic recovery begun in2010 while events such as the Summer Olympics that took place in 2012 and Diamond Jubilee that took place in 2013 boosted the country’s economic growth(The Heritage Foundation, n.d). Despite that, the interest rates are still held at a low figure of 0.5% and the confidence of consumerscontinuebeing low. There is a rise in unemployment and low investments in both private and public sectors, something that has been a source of concern. It is projected that the GDP will continue to be at low but positive levels over the coming years. Inflation is also expected to shrink to the target set by the Bank of England by 2017, 2%(The Heritage Foundation, n.d).
The UK has enacted policies that encourage foreign direct investment (FDI), which made up 2.5% of the total GDP in 2012 and about 3.2% of the total GDP between the year 2008 and 2012(Bowles & White, 1994). The “Doing Business in the UK” report released by HSBC said that the UK’s geographic location allows the country to act asthe heartof accessing the world markets. The country also has excellent transportation infrastructure, which opens up the markets and facilitates reaching markets other markets. The UK government committed $17 billion dollars into the improvement of infrastructure that will help improve transportation network, communications, energy and water provision. The infrastructural improvements will be completed by 2020.(HBSC, 2012). This is projected to attract more investors.
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||Nigeria has a relatively weak economic freedom of 55.6 as compared to the UK. It is the 120th freest economy in the 2015 Index.
||The UK has a strong economic freedom of 75.8.It is the 13th freest economy in the 2015 Index.
||Nigeria has a weak rule of law with corruption accompanying majority of government spending which inhibits the growth of the private sector.
||United Kingdom’s economy is built on a strong rule of law with strong corruption is very minimal. This fosters a strong open trading environment which has promotes both private and public sectors.
||The Nigerian economy promotes adverse protectionist competition.
||The UK economy comprises of large government spending, which takes up almost half of the total domestic economy.
|| The Nigerian public sector is overstaffed, ineffective and highly bureaucratic, which weakens property rights.
||The UK private property contracts and rights are secure, which makes the property rights effective.
|Starting a business
||The regulatory procedures of starting a business remain costly and time-consuming.
||The UK regulatory procedures for starting a business are transparent, cheap as there is no minimum capital requirement, and fast as it takes less than a week.
||There are barriers that restrict agricultural imports, and cause custom delays. These legal policies cause substantial challenges for foreign investors
||Although there are several non-tariff barriers the British economy is very open to external trade. The U.K. is very accommodating to both domestic and foreign investors equivalently.