Abuja, 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
subnational 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
The report also 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 subnational 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.
“The report presents an opportunity for Nigerian states to benchmark their
investment climates and compare themselves with other cities with which
they compete for FDI. State governments have an influence in enabling private
sector development, and the report provides a mechanism for evidence-based
dialogue with state governments on reforms,” said Solomon Adegbie-Quaynor,
IFC Country Manager for Nigeria. “The report also lets state governments
track annual improvement in the investment climate."
Nigerian states performed worst on property registration. Obtaining the
governor’s consent, which is required for property transfers, is the main
source of delay and high costs associated with transfers. Currently, all
Nigerian states would rank low in the global Doing Business ranking.
Abuja is Nigeria’s top performer in property registration. But when compared
globally, the state ranks 157 out of 178 economies.
There are also substantial differences in the time and cost to enforce
a commercial contract. Typically, court performance is better in states
such as Abuja, Kaduna, and Lagos that have implemented the new High Court
rules. Across all the states, enforcement is a significant factor to delays
in recovery of commercial debts among all states.
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
“There is no better way to create growth and jobs for Nigerians than through
improving the business environment for private enterprises. The report
will provide a strong basis for dialogue among Nigerian stakeholders on
how to move from analysis to action, so that jobs can be created soon,”
said Onno Ruhl, World Bank Country Director for Nigeria.
Doing Business in Nigeria 2008 is part of the Nigeria subnational 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.
“A better investment climate is vital for accelerating growth and reducing
poverty in Nigeria. The report should be a valuable resource to support
efforts to further reform the investment climate at both federal and state
level. We are delighted to be partners in this endeavor, said Eamon Cassidy,
Head of the United Kingdom Department for International Development in
The report is based on information provided by more than 200 lawyers, accountants,
construction experts, private sector professionals, and public officials.
For more information about the data and methodology, visit www.doingbusiness.org/Nigeria.
About the Doing Business Project
Since 2003, Doing Business has contributed to more than 100 reforms
around the world. The project is based on the efforts of more than 5,000
local experts—business consultants, lawyers, accountants, government officials,
and leading academics around the world, who provided methodological support
and review. For more information, visit www.doingbusiness.org.