Nigeria, Africa’s largest economy, has long been touted as one of the continent’s most promising business hubs.
In the first quarter of 2015, foreign direct investment inflow surpassed $700 million and even though investor confidence is shaky given the uncertainty during and since the 2015 elections, things are expected to pick up once a clear economic direction is put in place by President Buhari.
But despite offering so many opportunities, Nigeria remains one of the worst countries to do business, as data from the World Bank Doing Business report shows. The report ranks Nigeria 169 out of the 189 in consideration—essentially unmoved from last year’s 170 rank. Nigeria ranked 39th among the listed African countries.
The report measures the ease of doing business along various parameters such as paying taxes, ease of obtaining construction permits, getting electricity, enforcing contracts, registering property, trading across borders and getting credit.
While Nigeria has strengthened minority investor protection, where it ranks 20 out of the 189 countries, it still has numerous problems to contend with. Starting a business is a cumbersome process with inefficient business registration processes and new businesses are often tied up in layers of government bureaucracy with many resorting to third party agents to help facilitate the process of registering a business. Accessing credit and getting electricity also remain low-scoring parameters in the World Bank report and it does not much better in Africa’s other top economies.
Ranking of Africa’s top ten economies for ease of doing business
Country Global ranking
Nigeria 169
South Africa 73
Egypt 131
Algeria 163
Angola 181
Morocco 75
Libya 188
Sudan 159
Kenya 108
Ethiopia 146
Data: World Bank
Overall, Mauritius, which is often promoted as a tax haven, is the highest ranked African nation (32) with good ratings on enforcing contracts and paying taxes.
Highest ranked African countries for ease of doing business
Country Global ranking
Mauritius 32
Rwanda 62
Botswana 72
South Africa 73
Tunisia 74
Morocco 75
Seychelles 95
Zambia 97
Namibia 101
Swaziland 105
Data: World Bank