Nigeria 2011 : An Assessment of the Investment Climate in 26 States
This investment climate analysis reviews the experiences of over 3000 surveyed business owners in 26 states of Nigeria about the aspects of the business climate that affect their businesses. It complements a similar study in 2007 that covered 11 ot...
| Main Authors: | , |
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| Format: | Report |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/732561468144277467/Nigeria-2011-an-assessment-of-the-investment-climate-in-26-states http://hdl.handle.net/10986/27340 |
| Summary: | This investment climate analysis reviews
the experiences of over 3000 surveyed business owners in 26
states of Nigeria about the aspects of the business climate
that affect their businesses. It complements a similar study
in 2007 that covered 11 other Nigerian states. The survey
asks business owners about both their perceptions and the
actual costs of selected constraints. The analysis
benchmarks Nigeria against comparator countries, and
provides detailed data for each state. Nigerian firms have
low productivity, as measured by their output in relation to
their labor and capital inputs. Firms in Kenya are about 40
percent more efficient, firms in Russia almost twice as
productive, and firms in South Africa almost four times as
productive. Nigerian firms that export are about 90 percent
more productive than non-exporters. Although labor in
Nigeria is inexpensive, it is not inexpensive enough to
compensate for this low productivity. The poor performance
of Nigerian firms reflects many factors. This study focuses
on constraints in the business climate and the serious costs
they impose on Nigerian firms. Taken together, the total
indirect costs of poor quality infrastructure, crime and
security, and corruption amount to over 10 percent of sales
for Nigerian firms. This is twice as high as in South
Africa, Brazil, Russia and Indonesia. Microenterprises firms
with fewer than five workers face similar constraints as
larger firm's unreliable power, limited access to
finance, corruption, and transportation bottlenecks. But the
consequences for their businesses are far more severe. For
instance, most microenterprises cannot afford generators, so
power outages are more likely to shut down their operation.
Lacking collateral, almost no microenterprises have access
to formal external financing. |
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