Lagos State, Nigeria’s economic hub, has emerged as the leading subnational entity for ease of doing business in the country, according to a new report assessing business environments nationwide.
The report was unveiled in Abuja on Friday, March 28, during The Reform and Diplomatic Roundtable 2026, organised by the Presidential Enabling Business Environment Council in collaboration with UK International Development and Nigeria Economic Stability and Transformation Programme.
Lagos secured the top position by demonstrating a strong combination of regulatory readiness, infrastructure, and institutional transparency. It was followed by Kaduna, Oyo, the FCT, Ogun, Enugu, Plateau, Ekiti, Kano, and Nasarawa.
What the report is saying
The report highlights that Nigeria’s economic trajectory is increasingly shaped by how effectively state governments address local bottlenecks that influence everyday business operations. While federal reforms remain important, the report notes that meaningful progress must occur at the state level, where businesses operate.
- “Nigeria’s business environment remains central to the country’s economic resilience and long-term growth prospects. With more than 39 million Micro, Small and Medium-sized Enterprises (MSMEs) operating across states, how each subnational is performing has never been more important,” the report stated.
The assessment also serves as an evidence-based tool for tracking reform progress and identifying high-impact interventions.
- “This assessment adds to that goal by offering more than a scorecard. It provides a grounded, evidence-based view of how Nigeria’s states are enabling businesses, where progress is emerging and where challenges continue to hold firms back. The analysis relies primarily on secondary data that captures the adoption of technology, automation and digitalisation in public service delivery.”
More insights
Nairametrics’ review of the report shows that it utilised a framework of 16 indicators covering key areas such as electricity access, infrastructure, digital connectivity, land administration, justice delivery, taxation, trade logistics, investor support, crisis resilience, and workforce development.
Each of these indicators was further broken down into 36 operational sub-indicators linked to specific administrative datasets, ensuring that the findings reflect both regulatory frameworks and actual service delivery on the ground.
Lagos ranked first due to its advanced business environment, supported by relatively reliable electricity, functional land administration systems, and efficient commercial courts. Its strengths include strong market access, a skilled workforce, effective contract enforcement, and robust infrastructure such as airports and rail networks.
However, the report identified key gaps, including issues related to touting and loitering, weak investor aftercare systems, and uneven digital connectivity in non-urban areas.
- “The presence of unauthorized individuals loitering around key business and logistics touchpoints creates an environmental nuisance and introduces significant security and safety concerns for commercial operators and the public. This negatively impacts the predictable flow of commercial activities, particularly those engaged in transport and trade, creating an insecure environment.”
A critical review of the report by Nairametrics revealed an uneven performance across Nigeria’s six geopolitical zones. The South-West accounted for four states in the top 10, followed by the North-Central with three states, the North-West with two states, and the South-East with one state. No state from the North-East or South-South made the top 10.
Enugu State, the only South-East state on the list, ranked sixth, with strengths in digital connectivity, electricity access, workforce development, and social infrastructure. However, it also faces challenges related to investor aftercare and access to credit.
What you should know
In September last year, Nairametrics noted that company registries are critical touchpoints for investors, as they formalise businesses and enable corporate operations. However, the report indicates that opaque processes and slow registration timelines still discourage many of Nigeria’s 39 million MSMEs from formalising their operations.
- To address these challenges, the report outlines 10 strategic priorities to improve the ease of doing business nationwide. These include digitising and automating land administration processes, improving access to credit through collaboration with development finance institutions, expanding commercial and small claims courts, and strengthening alternative dispute resolution systems.
Other recommendations include establishing investor aftercare units, removing interstate trade barriers, improving domestic logistics infrastructure, enhancing digital connectivity, enforcing right-of-way policies, implementing electricity sector reforms, developing one-stop investment centres, adopting alternative energy solutions in transportation, and creating effective grievance redress mechanisms.
