The World Bank has released the fourth sub-national report of its Doing Business Series in Nigeria tagged Doing Business in Nigeria 2018. The report ranks FCT Abuja as the best place to do business in Nigeria, with a DTF score of 85.61 to top the Starting a business category.
What the report is all about
The Doing Business in Nigeria 2018 compares business regulations in 36 states and FCT Abuja and measures progress in the states since 2014 in four regulatory areas:
- Starting a new business
- Dealing with construction permits
- Registering property
- Enforcing contracts
Measures of regulatory quality in the latter three indicators are also incorporated in the report. The report points out that 29 states implemented 43 reforms across the four bench marked areas, making it easier for local entrepreneurs to start and operate a business in the states.
Starting a New Business
Abuja topped as the number one destination to do business in Nigeria in 2018, with a DTF score of 85.61. Nigeria’s commercial capital, Lagos, is the second best state to do business with a DTF score of 83.67 while Enugu is third on the ranking with a DFT score of 81.70. Ogun, Kaduna, Katsina, Kano and Rivers followed in that order with DTF scores of 81.69, 81.43, 80.14, 79.73, 79.47 respectively.
According to the World Bank report, the worst state to do business in Nigeria in 2018 is Ondo State with a DTF score of 71.04. Adamawa followed with a DTF score of 71.96 while Osun is the third worst state to do business with 72.48
Most reforms were federally driven in the area of starting a business, and most were focused on the efficiency of processes rather than the quality of regulations.
Dealing with construction permits
Niger State topped the list of states, when it comes to dealing with construction permits, as it was ranked number one among the 36 states and FCT with a DTF score of 79.71. Construction permit takes 11 procedures and 53 days, at a cost of 3.9% of the warehouse value in the state. Kano State is second with DTF score of 79.38 while Jigawa (where it takes only 33 days to secure construction permit) is third with DTF score of 79.06.
Lagos State was adjudged as the worst place to secure construction permit in Nigeria, with DTF score of 51.37, followed by Rivers State with 53.21 while Zamfara is the third worst state with 58.26 DTF score.
Meanwhile, when it comes to registration of new property in Nigeria, Kaduna topped with a DTF score of 45.72 while Zamfara was second with 37.39 DTF score. Jigawa was third best state with 36.79.
In the same vein, if you want to register a property, Cross River should be the last on your mind, as the state is ranked as the worst state in this category with DTF score of 0.00 while Rivers is the second worst with 16.31 and Kebbi emerged third with 17.09.
If you are thinking of enforcing contracts, Kaduna state may be the place to go, as the state emerged top in that category with 65.10 DTF score. Bauchi is ranked second in enforcing contract in Nigeria with 63.99 while Jigawa is third on the list with 63.14 DTF score.
Also, if you want your contracts to be enforced, you may have to move far away from Imo State. it was the least state to enforce contracts throughout Nigeria in 2018 with 43.25, according to the Doing Business in Nigeria 2018 report by the World Bank. Ebonyi State closely followed with 44.28 while Cross River is third with 47.69 DTF score.
Here is the full details of the World Bank Report.
Is 5% returns on mutual funds enough? Here are 5 things you need to know this morning
2021 has been a slow year for mutual fund investors as the best performing fund could only return 4.87%
Last week was another interesting week with a series of activities and events making the rounds in the economy and markets. These events have an effect on your money, and we will be breaking down what it all means.
Joe Biden’s Tax Plans
Biden’s tax plans last week had a strong effect on the market and led to a sell-off in many asset classes – especially crypto. The rumours were that Treasury Secretary Janet Yellen wanted to institute an 80% crypto capital gains tax. The market did not react well to this with over $200 billion dollars lost in cryptocurrencies on Friday as a result.
President Biden plans to fund his ambitious infrastructural plan with the capital gains tax which targets people who earn over $1 million dollars a year.
Many investors are still bullish on the long-term with cryptocurrencies, perhaps this is a good time to ‘buy the dip’ and for those unaware, capital gain tax can only be applied when the asset is sold.
CBN vs Exporters
Last week, the CBN assured exporters of unhindered access to their dollar earnings. The backstory here is that the CBN had in January 2021, announced that all Nigerian exporters who are yet to repatriate their export proceeds, will be barred from banking services effective from January 31, 2021.
The exporters instead prefer to sell their forex to the parallel market where it can be exchanged for a higher naira value, boosting their gains on foreign currency conversions. They also avoid regulatory squabbles by opening foreign bank accounts where most of the export proceeds are warehoused and then sold at the black market.
Nigerian Mutual funds take a 4% dip in Q1 2021
Mutual Funds are traditionally a good investment vehicle for many Nigerians. However, so far, 2021 has been a slow year for mutual funds as the net asset value of the funds declined by 4.01% from N1.57 trillion as of 31st December 2020 to N1.51 trillion as of 1st April 2021.
The highest return for the quarter stacked 4.87% and has a minimum investment of $2,500. However, the question is will investors be satisfied with this return especially with inflation heading to 20%. Considering this particular fund invests in debt instruments an almost 5% ROI should attract a number of investors.
Bitcoin peer to peer trading surges 27% after CBN crypto ban
CBN’s restriction on banks facilitating cryptocurrency exchanges has enabled Nigerians to find other ways to buy crypto through P2P (peer to peer). Data reveals that Nigerians have moved over $103 million.
Cryptocurrency adoption in Nigeria is still on the rise and there seems very little the regulators can do about it. The Nigerian central bank is not the only regulator trying to control cryptocurrency adoption, last week, the CBRT (Central Bank Republic of Turkey) also announced a ban on cryptocurrency citing excessive volatility and lack of regulation.
Hyundai & Kia to set up an assembly plant in Ghana in 2022
Ghana has proven to be a prime investor location for Foreign Direct Investment in Sub-Saharan Africa. This announcement is just a few weeks after Twitter announced its plans to open its first African office in the country.
An official statement from Alan John Kyerematen, Ghana’s Minister of Trade and Industry reads “The local assembly of vehicles, 3,600 direct and indirect jobs would be created in Ghana, and the addition of components and parts manufacturing will also add about 6,600 direct and indirect jobs.”
It has become more glaring that attracting investment into Nigeria is increasingly difficult due to regulatory uncertainties and macro factors.
Motorcycle “Okada” fare in Nigeria surges by 102.5% in March 2021
Specifically, the average fare increased from N134.07 recorded in March 2020 to N271.44 in March 2021.
The cost of commuting in Nigeria by motorcycle popularly known as “okada” surged by 102.46% year-on-year in March 2021 to stand at N271.44. This is according to the National Bureau of Statistics (NBS) report on transport fare watch.
According to the report the average fare paid by commuters for journey by motorcycle, increased by 1.76% month-on-month and 102.46% year-on-year. Specifically, it increased from N134.07 recorded in March 2020 to N271.44 in March 2021.
- The increase could be partly attributed to the increase in the price of fuel across the country, the ban on okada in some areas, and the effect of the covid-19 pandemic, which affected most aspects of the country’s economy.
- States with the highest journey fare by motorcycle per drop were Rivers (N420.35), Taraba (N420.15), and Yobe (N420.1).
- States with the lowest journey fare by motorcycle per drop were Adamawa (N90.43), Katsina (N147.64), and Niger State (N159.2).
Transport fare by Air
The average fare paid by air passengers for specified routes single journey increased by 18.71% year-on-year to N36,495.41 in March.
- On a month-on-month basis, the average fare paid by air passengers increased by 18.71% from N36,458.11 in February 2021 to N36,495.41 in the month under review.
- States with the highest airfare were Anambra/Lagos (N38,600.00), Delta/Jigawa (N38,500.00), Bauchi (N38,450.00).
- Meanwhile, states with the lowest airfare were Akwa-Ibom (N32,700.00), Sokoto (N33,200.00), and Katsina (N35,150.00).
Transport fare by Bus
The average fare paid by commuters for bus journey within the city increased by 4.42% month-on-month and by 82.50% year-on-year to N377.27 in March 2021 from N361.31 in February 2021.
- Also, the average fare paid by commuters for bus journey intercity increased by 1.62% month-on-month and by 42.58% year-on-year to N2,411.29 in March 2021 from N2,372.87 in February 2021.
- States with the highest bus journey fare within the city were Zamfara (N618.23), Bauchi (N597.14), and Ekiti (N500.15) while States with the lowest bus journey fare within the city were Oyo (N197.55), Abia (N209.87), and Borno (N258.14).
- States with the highest bus journey fare intercity were Abuja (N4,576.28), Lagos (N3,425.18), and Sokoto State (N3,380.20).
- While States with the lowest bus journey fare within the city were Bayelsa (N1,700.19), Enugu (N1,720.45), and Bauchi State (N1,725.35).
Transport fare by Water Way
- The average fare paid by passengers for waterway passenger transport increased by 1.81% month-on-month and by 43.52% year-on-year to N808.38 in March 2021 from N794.02 in February 2021.
- States with the highest fare by waterway passenger transport were Bayelsa (N2,300.80), Delta (N2,300.60), and Rivers (N2,285.67) while states with the lowest fare by water way passenger transport were Borno (N250.30), Gombe (N320.15), and Abuja (N350.79).
What this means
The transportation sector constitutes one of the major features of the economic development of any country. However, Nigerians continue to pay more for transporting themselves and conveying goods from one place to another.
The increase in transport fare is basically due to higher fuel prices, persistent decline in the exchange rate, and the general increase in the prices of goods and services in the country. Core inflation is currently at 12.67%, the highest in almost four years.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- 2021 Q1 Results: FTN Cocoa Processor Plc reports loss after tax of N162.21 million
- Tantalizers Plc reports a loss after tax of N97.75 million in FY 2020 in Q1 2021.
- Courteville Business Solutions Plc proposes final dividend of 3 kobo per share for FY 2020.
- 2020 FY Results: UPDC Real Estate Investment Trust records over 500% growth in Profit after tax.
- Sovereign Trust Insurance records a 43% surge in profit after tax to N392.1 million in Q1 2021.