By Loy Okezie
Doing business in Nigeria is very complicated. For years, Nigerian firms especially in the private sector have faced a tough business environment. Yet, resourceful and resilient entrepreneurs continue to find ways to build a vibrant enterprise culture.
Experts believe that efficient, accessible, and simple regulations and clear property rights could unleash the natural entrepreneurship of small and medium-size firms even further.
The World Bank’s Doing Business 2010 report finds that Nigerian States have been actively reforming to encourage business activity over the past two years. The report suggests that if Nigeria adopted nationwide all of its states’ best practices identified, it would rank 72nd out of 183 countries globally — 53 places ahead of Nigeria’s current position in the global Doing Business 2010 report.
Doing Business in Nigeria 2010 provides a quantitative measure of the federal and state regulations for starting a business, dealing with construction permits, registering property, and enforcing contracts – as they apply to domestic small and medium-size enterprises.
The report which updates the information presented in 2008 expands the analysis to all 36 Nigerian states and the capital city, to provide a comprehensive map of the ease of doing business in the country.
According to the report, it is easiest to do business in Jigawa and most difficult in Ogun. In this article, we have featured the 10 Best Places to Do Business in Nigeria, along with some key indicators and statistics about these places.
The 10 Best Places to Do Business
Jigawa — Population: 4,988,888 (2005 estimate); GDP: $2.99 billion (2007); Per capita: $673
Just two years ago, the World Bank Group and the Central Bank of Nigeria (CBN) declared Jigawa as the poorest state in Nigeria. In the Doing Business in Nigeria 2010 Report, The World Bank Group declares Jigawa as the best state to do business in Nigeria.
But what really makes Jigawa tick?
Amongst other indicators, the type of leadership, institutional frameworks and business regulations such as dealing with construction permits and enforcing contractsare some of the indices that make the state the best place to do business.
Some more indicators below:
– Starting a business in Jigawa takes 35 days in 7 procedures.
– Jigawa ranks 1st in dealing with construction permits with only 10 procedures and taking 47 days complete, compared with 23 procedures in Ebonyi.
– Registering property takes 11 procedures in a total of 28 days, thus ranking 5th in Nigeria.
– In Jigawa, there are only two inspections during construction, while in Ebonyi, a site analysis report is required before construction starts, followed by 12 inspections during the construction.
– Jigawa ranks 4th in enforcing contracts. To enforce a contract in Jigawa state, it takes about 261 days. Thus, fast approval of construction permits, like in Jigawa, would mean that dealing with construction permits is three times faster than the OECD average (157 days).
– Resolving a commercial dispute in 261 days, like in Jigawa, would put Nigeria among the 10 fastest countries in the world, similar to Rwanda and faster than the United Kingdom.
Gombe — Population: 2,353,000 (2006); GDP: $2.50 billion (2007); Per capita: $1,036
In the Doing Business in Nigeria 2010 Report, The World Bank Group ranks Gombe as the second best state to do business in Nigeria.
Some of the key indicators for this ranking are:
– Gombe ranks 4th in the list of easiest states to start a business, with 8 procedures and 24 days to complete.
– Registering property is easiest in Gombe, where it takes 8 procedures, 16 days, and 6.6% of the property value to transfer a title. By contrast, in Rivers state, it takes 13 procedures, 201 days, and 23.2% of the property value to complete the same process.
– Legal fee for registering property is only 1% of the property value in Gombe, compared to 10% in some states like Lagos.
– The cost of starting a business in Gombe is 66.2% of income per capita, 9th in Nigeria after Akwa-Ibom.
– Obtaining a building permit does not require development authorities to conduct inspections in Gombe, as compared to 12 inspections during construction in Ebonyi and 7 in Lagos.
Borno — Population: 4,588,668 (2005 estimate); GDP: $5.18 billion (2007 estimate); Per Capita: $1,214
Borno state is the third easiest place to do business in Nigeria, according to the Doing Business Report.
Some key indicators include:
– Starting a business in Borno takes 34 days in 8 procedures.
– It takes only 14 days and 8 procedures to register a property in Borno, placing 2nd after Gombe. Interestingly, the time needed to register property in Borno is similar to Finland.
– In Borno, it takes two weeks to transfer a property title, while in Anambra it takes seven months. However, the time is largely dependent on the state governor’s consent, though obtaining this consent is the biggest bottleneck in property registration for most Nigerian states.
– Depending on whether or not this power has been delegated by the governor to a Ministry of Lands official, it takes two days to obtain a Governors’ consent in Borno, compared to six months in Kebbi.
– The cost of registering property in Borno is set at 5% of the property value. This cost includes: the consent fee, registration fee, stamp duty, and legal fees.
– Borno is ranked 5th easiest state when enforcing a contract, taking 371 days in 40 procedures to complete.
Kebbi — Population: 3,630,931 (2005 estimate); GDP: $3.29 billion (2007); Per capita: $993
Kebbi is ranked 4th overall best place to do business in Nigeria for the following factors:
– In Kebbi, the business premises permit can be obtained in one day, at a single-access point within the Ministry of Commerce, against a small flat fee.
– It is easy to start a business in Kebbi with 8 procedures lasting 30 days. Kebbi is 3rd easiest place to start a business after Abuja F.C.T and Kogi.
– The state is also the 3rd easiest place to enforce a contract in 40 procedures lasting 365 days, after Katsina and Yobe.
Kogi — Population: 3,595,789 (2005 estimate); GDP: $4.64 billion (2007); Per capita: $1,386
Kogi is 5th best state to do business in Nigeria.
Some indicators are:
– Starting a business in Kogi takes 28 days in 8 procedures, ranking 2nd after Abuja F.C.T
– In Kogi, registering property takes 9 procedures and lasts 33 days.
– In registering property, Kogi merges three procedures into one i.e., assessing the deed at the Federal Inland Revenue Service (FIRS), paying the stamp duty, and stamping the deed, by allowing applicants to pay the stamp duty at FIRS directly, rather than at a commercial bank.
Yobe — Population: 2,532,395 (2005 estimate); GDP: $2.01 billion (2007); Per capita: $843
According to the Doing Business in Nigeria 2010 Report, Yobe is ranked 6th easiest state to do business in Nigeria.
Below are key indicators:
– Starting a business in Yobe takes 38 days in 8 procedures.
– The Ministry of Commerce in Yobe charges 5,000 NGN (37.50 USD) and NGN for business premises registration for a medium-sized company, compared to 40, 000 NGN ($300 USD) in Kwara.
– In Yobe, it takes 1 year and costs 26.1% of the claim value to resolve a commercial dispute through the courts. In Cross River state, it takes more than twice the time (835 days) and money (52.8%) to get the same result.
– Registering property takes 9 procedures in 80 days. It costs 5.2% of the property value to register a property in Yobe, which is comparable to Germany.
– Obtaining a building permit takes 4 days in Yobe, compared to 90 days in Cross River.
– Getting a warehouse wired to the National power grid can take as little as 14 days in Yobe, compared to 9 months in Lagos.
– Yobe is the 2nd easiest place to enforce a contract in 40 procedures lasting 368 days, after Katsina.
Katsina — Population: 6,483,429 (2005 estimate); GDP: $6.02 billion (2007); Per capita: $1,017
Katsina is 7th best state to do business in Nigeria.
Here are the indicators:
– Starting a business in Katsina takes 37 days in 9 procedures.
– Katsina is the easiest place to enforce a contract in Nigeria in 40 procedures and lasting 285 days.
– It costs 26% of the claim value to enforce a contract lasting 285 days in Katsina, compared to Cross River where it would take more than twice the time (835 days) and money (52.8%) to get the same result.
– Registering a property in Katsina ranks 8th, takes 11 procedures and lasts 33 days.
Kano — Population: 9,383,682 (2006 census); GDP: $12.39 billion (2007); Per capita: $1,288
Kano is one of the states included in the Doing Business in Nigeria 2008 Report. In this year’s report, Kano maintains its position in the Doing Business in Nigeria Top 10 as the 8th easiest state to do business in Nigeria.
Kano made the most progress amongst Nigerian states since 2008, with reforms in three out of four areas measured.
Some of the key indicators are:
– Starting a business in Kano takes 38 days in 9 procedures.
– It costs about 95% of income per capita to deal with construction permits in Kano, compared to 1,509% in Enugu.
– Kano ranks 3rd in dealing with construction permits with only 14 procedures and taking 56 days complete, after Jigawa and Sokoto. Thus, it is easy for construction companies to obtain all construction-related permits and utility connections in Kano.
– Registering a property in Kano ranks 4th, takes 11 procedures and lasts 31 days.
– While the consent fee in registering a property in Ekiti is 15% of the value of the property, Kano has eliminated the consent fee altogether.
– Obtaining Governor’s consent has been decreased to 14 days, after the power to grant consent was further delegated to both the Commissioner and the Permanent Secretary for Lands, thus decreasing the overall time to register property to 31 days.
– Following Abuja’s example, Kano is currently implementing a Geographic Information System (GIS), which captures and stores land information in digital format.
– In Kano, efforts have been made to broaden access to legal resolution and speed-up proceedings by setting up new Magistrates’ Courts.
– Among large states, Kano’s overall performance is better than Lagos, Rivers, and Kaduna.
– Kano also outperforms smaller states on dealing with construction permits and registering property.
– Kano introduced reforms in three areas, thus becoming Nigeria’s top reformer since the publication of Doing Business in Nigeria 2008.
Zamfara — Population: 3,602,356 (2005 estimate); GDP: $4.12 billion (2007); Per capita: $1,237
Zamfara is the 9th easiest state to do business in Nigeria, according to the Doing Business in Nigeria 2010 Report.
Below are key indicators:
– In Zamfara, the business premises permit can be obtained in one day, at a single-access point within the Ministry of Commerce, against a small flat fee.
– Starting a business in Zamfara takes 36 days in 8 procedures.
– Zamfara is the 3rd easiest state to register a property with 10 procedures in 32 days, after Gombe and Borno.
Bauchi — Population: 4,706,909 (2005 estimate); GDP: $4.71 billion (2007); Per capita: $983
Bauchi is one of the states included in the Doing Business in Nigeria 2008 Report and maintains its position as the 10th easiest state to do business in Nigeria.
While Bauchi is the best overall performer among medium-size states, it should implement good practices when starting a business.
Key indicators include:
– Starting a business in Bauchi takes 36 days in 10 procedures.
– Bauchi ranks 7th in dealing with construction permits with only 11 procedures and taking 59 days complete.
– It takes 4 days to stamp property registration documents in Bauchi, where FIRS maintains a stamp-duty office, and 10 days in Bayelsa, where there is no local office.
About Doing Business in Nigeria 2010 report
Doing Business in Nigeria 2010 compares business regulations across all 36 states and the capital. The report focuses on state and national regulations that affect four stages in the life of a small to medium-size domestic firm: starting a business, dealing with construction permits, registering property and enforcing contracts.
For more information about the Doing Business in Nigeria 2010 report, scope and methodology of data, please visit www.doingbusiness.org