May 20, 2008 — Across Nigeria, states vary substantially on the ease of doing business, but they can achieve better business environments by sharing and adopting good practices. This is a key finding from Doing Business in Nigeria 2008, the first sub-national report of the Doing Business series in Sub-Saharan Africa.
The report tracks the number of procedures, costs, and time it takes for Nigerian companies to comply with business regulation. It uses four indicators: starting a business, dealing with construction licenses, registering property, and enforcing contracts.
The report finds that registering a business has become significantly easier, due to a computerized registry and newly established zonal branches of the country’s Corporate Affairs Commission and Stamp Duty Offices.
The report finds differences in some indicators across states. For example, complying with building regulations is easier and cheaper in northern states, while the cost of building permits varies widely throughout the country. A permit for a warehouse would cost 25 percent of Nigeria’s income per capita in Sokoto, whereas the same permit would cost 826 percent in Lagos. The report also finds that dealing with licenses is easiest in Kaduna.
The sub-national variances show that states can play a significant role in shaping Nigeria’s local business environment. Simple administrative reforms at the local level can make Nigerian states more competitive both nationally and globally.
Nigerian states do not need to look far for ideas on how to improve their business environments. Should any state adopt the best regulations already in place, its ranking would improve in all four indicators studied by the report. Higher rankings on the ease of doing business are associated with growth, more jobs, and a smaller informal sector. In the global Doing Business 2008 report, Nigeria -- represented by Lagos -- ranked 108 among 178 economies.
Doing Business in Nigeria 2008 is part of the Nigeria sub-national investment climate program, which supports state governments in improving their business environments. This program is part of a country partnership strategy between the Nigerian government, the United Kingdom’s Department for International Development, and the World Bank Group. It aims to create momentum for reform through dialogue between the private and public sectors in participating states, as well as drive investments and growth in non-oil sectors and reduce poverty through shared sustainable economic growth.
Information about the report, its findings, and methodology is available at www.doingbusiness.org/Nigeria.
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