The Presidential Enabling Business Environment Council (PEBEC) has launched its second Subnational Ease of Doing Business Ranking for 2023.
In the report, Gombe, Jigawa and Sokoto states are the top three most attractive states to do business in the country.
Jumoke Oduwole, special adviser to the president on ease of doing business, said the report is an essential resource for anyone looking to invest in Nigeria’s business climate, providing valuable insights into the most attractive states for businesses.
In 2021, Gombe was ranked first among the thirty-six states and the Federal Capital Territory (FCT). The state also maintained its position in the 2023 ranking.
Jigawa moved from its third position in 2021 to second in 2023 ranking while Sokoto moved from the second position to third in the 2023 ranking.
However, three states including Delta, Enugu and Edo were on the bottom ranking scores as they came in 35th, 36th and 37th positions.
The report addresses ease of doing business across six indicators and 16 sub-indicators.
The sub-indicators under infrastructure include Electricity: availability, cost and experience; Transportation: availability and quality; Logistics: availability, cost and quality; Telecom and Internet: cost and quality.
Transparency and Accessibility of Information
This considers Investment Promotion: availability and experience, and Accessing key Information: availability and awareness.
Skills and Labour
This indicator focuses on the availability of labour at the subnational levels.
Secure and Stable Environment
States were assessed on security and safety; what the availability and experience look like.
Availability, cost and experience in business registration were considered. License renewal: availability, cost and experience; Contract enforcement: availability and accessibility were the focus. Land and Property Acquisition: the report assessed availability, cost and experience as well as Paying taxes: availability, cost and experience were looked at.
Under this indicator, key factors include Funding: availability, cost and experience; Forex: availability and experience, and new/range of customer accessibility.
The report shines a spotlight on the challenges of doing business in Nigeria and why it is essential to overcome those challenges to rekindle growth, investment, and job creation by the Medium, Small and Micro Enterprises (MSMEs).
The report also presents findings of the PEBEC research on subnational ease of doing business (EoDB), including the marginal and clearly insufficient improvements achieved since 2021, the variation between EoDB in different subnational and across the six geopolitical regions, and the progress and limitations of reforms implemented by the subnational to date.
Reforms have been implemented, but generally have not yet improved satisfaction
According to PEBEC, several subnational in their submissions indicated that they have implemented reforms in the areas covered by the indicators but the report shows that the reforms implemented by states have not yet notably increased satisfaction in their business environment.
“Of the eleven subnationals that submitted relevant reforms, six increased their rank in overall EoDB satisfaction. Three maintained their position, while two fell in the rankings. Overall EoDB satisfaction score increased in five of these subnationals, while six saw a decline in overall satisfaction.
“This suggests that implementing reforms alone is not enough to improve satisfaction—the reforms must be properly communicated and be designed to address the specific pain points of MSMEs”.
The Nexus Between Poverty and Ease of Doing Business
It appears that the leading states in the ease of doing business ranking are the poorest states in Nigeria.
Last year, Sokoto, Jigawa, and Gombe were part of the states ranked as the poorest in Nigeria, according to the National Bureau of Statistics (NBS) in its Multidimensional Poverty Index (2022) report.