By Bolaji Owasanoye
A sound economy is the surest engine of growth and the shortest route to tackling the challenges posed by endemic poverty in developing countries. Going by the example of well developed nations, sound economic fundamentals contribute to social development which in turn strengthen political stability and good governance.
To ensure a sound economy the legal regime must be equally sound and provide an assuring platform for entrepreneurs and businesses that can create job towards alleviating or at least significantly diminishing poverty.
The role of law in promoting economic development cannot be underscored because most of our lives and interaction with each other are regulated by law. Law serves an economic function because it recognises the freedom to do business within defined parameters.
For example, the law of contract is a devise to promote market institutions and the economy by recognising and protecting the freedom to choose interfaced by deliberate government policies that imply that in promoting selfish economic interests entrepreneurs will promote the overall economic interest of society.
The individual can only make money by supplying commodities or providing services required by the society.
By promoting competition through the mechanism of law government prevents monopolies and undue profits and enhances efficiency in goods and service delivery. In order to enhance the growth of business and consequently economicÂ development, governments in developed societies use law as a catalyst for economic development.
The laws that promote economic development do not atrophy. They respond to social conditions, international developments and emerging trends. They are organic and forward looking.
They tend not to lag behind the activities of entrepreneurs, merchants and business men but rather chart new courses for them in realisation of much needed economic growth and human development.
In the light of these fundamentalÂ bjectives of the role of law in economic development, one notes with sobriety that the legal regime for doing business in Nigeria is several years behind developments in more conscious and sensitive societies desirous of boosting economic growth and alleviating poverty.
The problems with the Nigerian legal regime for economic development are myriad and is indicated by archaic or multiple laws and regulations, overlaps in administrative and institutional structures, absence of laws in critical areas, and a general state of confusion that is a disincentive to investment by local and international investors and entrepreneurs.
To address this problem, the Federal Government through the Federal Ministry of Justice in collaboration with the Department for International Development (DFID) established the National Working Group on the Review of Investment Laws of Nigeria â€œto review the laws and practices affecting economic activities in Nigeria and make recommendations including draft bills for reform and development of the same with a view to removing legal and other impediments to the flow of investment and conduct of business generallyâ€.
Within this broad objective the Working Group focussed attention on three hematic areas considered as integral and critical to Governments desire to boost local and foreign investment in the short medium and long term bearing in mind the need to modernise laws and institutions, fast track economic growth, alleviate poverty and make the environment competitive and at the same time attractive to business and investments.