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Northern Nigeria best place to do business – World Bank report
THE four years’ subnational series data on the Doing Business in Nigeria (DBN) 2018 by the World Bank, comparing Business Regulation for Domestic Firms in 36 States and FCT Abuja with 189 Other Economies, has ranked the North West, North East and North Central top regions that proffer ease of doing business in the country.
The report analysed business regulations in Nigeria using four Indicators –ease of Starting a Business, Dealing with Construction Permits, Registering Property, and Enforcing Contracts.
Chronologically, North West at 61.03 per cent, North East 58.8 per cent, North Central 57.4 per cent aced the derived national average of 56.93 per cent whereas the South West; 55.82 per cent, South-South; 53.85 per cent and South East; 53.32 per cent hit below the national average.
Results arrived at from the indicators showed that it is easier to start a business in Abuja, however, on a state-to-state basis, data reveals that Kaduna state has the highest score of 65.97 per cent in terms of business regulations for domestic firms. In other words, Kaduna state offers the best environment for doing business.
Niger, Kano, Jigawa, Ekiti and Bauchi ranks higher in dealing with construction permits. Lagos and Rivers were ranked least states at 37 and 36 respectively.
While Kaduna and Zamfara, Jigawa, Abuja, Kastina emerged are top five states where registration of property is easy and cheap as against Rivers, Kebbi, Cross River and Rivers ranked worst states for ownership registrations.
Imo, Cross River, Anambra, Adamawa state ranked amongst the lowest state with enabling business environment for contract enforcement.
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Over the past four years, 29 Nigerian states have implemented 43 reforms across the four regulatory areas benchmarked, although 32 states had already implemented 77 reforms across the four regulatory areas benchmarked since the DBN 2010 study.
“It is encouraging to note that the private sector acknowledges the business environment reform agenda initiated at the Federal level is trickling down to several states.
“While these findings are encouraging, substantial variation remains across the country. Going forward it will be critical for the states to engage in peer learning and put in place the institutional mechanisms that will ensure continuous improvement and the sustainability of reforms,” said Rachid Benmessaoud, Country Director, World Bank Nigeria.
Although it is indicated that the gap between regions and states had started to shrink over the past eight years from 2004-2014, recent trends still show that despite an increase in the number of business reforms in the states, these reforms have been mostly in areas where the federal government has pushed for them.
Areas where it is up to the states to improve, such as property registration or construction permitting, have not moved as fast.
“On average, the stamp duty and the CAC registration fee together account for more than half of the total cost of starting a business, this fee ranges from N2,000 in Kebbi and Zamfara to NGN N100,200 in Gombe, making Gombe not only the most expensive state to start a business in Nigeria but one of the most expensive locations globally.
“Improving the business regulatory environment across Nigeria will be key to the country’s economic growth. Nigeria’s heavy dependence on oil has posed structural challenges that have made it difficult to achieve sustained growth, create jobs and reduce poverty,” the World Bank report states.
Nevertheless, the DBN report purported ample opportunities remain for states, “if the country succeeds in diversifying its economy, the long-term prospects are positive, according to PwC’s projections, Nigeria has the potential to become the world’s 14th largest economy by 2050 and enjoy an average annual growth rate of more than 4 percent in the long run.”