Challenges, opportunities of doing business in Nigeria

Nigeria, the largest economy in Africa, presents a myriad of challenges and opportunities for businesses operating at the state level. A recent report by PwC highlighted key obstacles such as poor infrastructure development, tax multiplicity, shortage of skilled personnel, and high cost of land acquisition. Adedayo Akinbiyi, Senior Economist at PwC, delved into these issues in a recent interview with CNBC Africa, shedding light on the complexities of doing business in Nigeria. The report emphasized the importance of understanding the business environment at the state level to drive reforms effectively. Akinbiyi pointed out that states need to identify their competitive advantages and attract investments to key sectors like agriculture, infrastructure development, and industrialization. Akinbiyi highlighted the distinct themes prevalent across various states in Nigeria. For instance, Niger State's strong agro-based economy positions it as a hub for agricultural processing and value addition. Ogun State, on the other hand, is focused on industrialization, boasting a significant presence of FMCG and industrial companies. Edo State's emphasis on agro-processing, particularly in palm and cassava products, aims to establish itself as a distribution hub for agricultural products. These strategic focus areas align with the states' competitive strengths and aim to drive economic growth and development. Despite the potential for growth, Akinbiyi noted several key constraints that hinder investor confidence in Nigeria. Policy inconsistency, regulatory challenges, and inadequate infrastructure were cited as major concerns for businesses. Investors are wary of policy flip-flops and contractual uncertainties, which create a sense of instability and unpredictability. Akinbiyi emphasized the need for robust institutional frameworks and clear regulatory guidelines to provide a conducive environment for investments. The issue of policy continuity and institutional stability remains a recurring challenge at the state level in Nigeria. Akinbiyi attributed this to the evolving nature of the country's democracy and the need for stronger leadership commitment to drive policy reforms. While some states have made strides in improving business regulations and streamlining processes, there is a disparity in progress across different regions. Akinbiyi underscored the importance of political will and external support from developmental agencies to facilitate meaningful reforms. In line with efforts at the federal level to enhance ease of doing business, Akinbiyi urged states to adopt similar initiatives and replicate successful policies. He cited examples such as automation of business registration processes and expedited procedures for setting up enterprises as best practices that could be emulated at the state level. By aligning with federal reforms and leveraging technology, states can create a more investor-friendly environment and drive economic growth. As Nigeria navigates the complex landscape of business challenges and opportunities, it is crucial for state governments to prioritize policy coherence, regulatory stability, and infrastructure development. By addressing these key areas and fostering a conducive business environment, Nigeria can attract greater investments, spur economic growth, and ultimately enhance its competitiveness on the global stage.