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 (pdf) 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.
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.