The World Bank recently released its sub-regional ease of doing business report for Nigeria. The document is a series of extensive notes on the progress (or lack of progress) made by various states in the country toward creating a conducive environment for businesses to set up and thrive.
As expected, the report comes packed full with fact-based praise for high performing states and data inspired knocks for lagging regions. It evaluates the ease with which enterprises are able to set up, get a construction permit, register property and enforce contracts- some of the most important aspects of a business’s early stages. The rankings are particularly interesting and have received the greater degree of attention in the media than, say, the report’s recommendation (which aren’t any less significant).
In this article, we’ll be going over the states with the shortest processes, time spans and lowest cost requirements for starting a business in Nigeria, as suggested by the World Bank’s Doing Business report for 2018.
The Easiest States to Set Up a Business in Nigeria
It’s not really surprising that the country’s capital territory would feature at the top of the list. Its status as the headquarters of Nigeria’s business regulatory agencies certainly works in its favour.
The Doing Business report says it takes seven processes and an average of ten days to set up a business in the FCT. And if your annual income is close to the national average, you’ll probably spend the equivalent of a quarter of that figure on starting your own business.
This is another popular destination for starting up a new business in Nigeria. This overwhelmingly urban state is the country’s chief commercial centre and its single largest economy. That’s enough to draw in entrepreneurs from beyond its boundaries.
But the state government has also moved to make the actual startup process easier for would-be entrepreneurs. It’s said that setting up a business in Lagos requires eight processes, all of which can be dealt with in eight days. This is partly because some of the steps involved, such as the payment of stamp duty, are carried out online (this is true for other businesses in the upper end of the rankings).
This South Eastern state has recorded some of the biggest improvements in the ease of doing business index over the past four years. They’ve moved the registration for PAYE tax online, employed additional magistrates to deal with contract issues, and implemented a directive to speed up the resolution of commercial disputes.
In practice, it’ll take you about 11 days to scale through the mine official steps to starting your business in Enugu, if you work on it consistently enough. On the average, you could spend a six-figure sum getting all of this done, but it’s not the most expensive you’ll find in the country.
These reforms have reflected positively on the public perception of the state as a location for building a business. It has moved up 19 places from its position in the World Bank’s previous report.
Ogun has been positioning itself as a viable alternative to Lagos for companies looking to set up or expand their operations. Businesses wary of Lagos’s pricey rents are pegging their tents in the neighbouring state just to the north, a state with much lower costs and plenty of space to spare.
They’re also being lured by the Ogun State government’s deliberate attempts to make it easier to do business in its towns and cities. Entrepreneurs need only go through eight steps to starting a business in the state. That’s the same number of days required as in Lagos. However, it still takes about half a month to go through these processes, so you’ll need to be a bit patient with it.
Kaduna has also seen significant improvements in its receptiveness to new businesses. The state has removed a previously existing requirement that business premises be inspected. Instead, it now issues a certificate as soon as a business premise fee is paid. It is also the easiest place to enforce a business contract in Nigeria, with standard commercial disputes being resolved in just over 300 days.
If you’re going to start a business in Kaduna, you’ll need to get through nine steps to establish one that’s legally recognized. It might take you 13 days to accomplish this.
Other Notable Facts
Other states in the top ten are Katsina (in sixth place), Kano (7), Rivers (8), Jigawa (9), and Nasarawa (10). The bottom three are Osun (35), Adamawa (36) and Ondo (37).
It takes about 12 steps to start an officially recognized business in Ondo State- the most of any state in the federation. And in Adamawa, it takes as much as 45 days to get an enterprise started (this involves in-person manual registrations at the local FIRS offices).
The report also says Kebbi is the least costly state to start a business in Nigeria; it takes less than a quarter of the Nigerian income per capita to secure proper business premises there.