The newly released Nigeria Ease of Doing Business Survey Report (EODB) has shown that States in the northern parts of the country are the most suitable for business.

However, this ranking needs to be handled with care because they are at best, perceptions of proprietors and managers of MSMEs across the states. 

Besides, on several indicators, their reported views did not reflect the tangible and measurable realities on the ground.

For instance, MSME respondents from States with lower crime incidences sometimes felt their state was more unstable and insecure than those from states with higher crime prevalence, and vice versa.

Typically, respondents to the survey from the southern parts of the country perceived their states to be less suited for business due to safety and security concerns than their northern counterparts thought of their states.

This corroborates the caveat contained in the report that “subnationals’ satisfaction with security as it affects doing business is not necessarily linked to external perceptions of the security situation on the ground.”

However, beyond this caveat on the contrasts between internal and external perceptions of the ease of doing business in a state, there is a more urgent caveat: the contradictions between the (internal/external) perception and the reality on the ground.

Perception

The Ease of Doing Business Survey relied on “a minimum of 50 respondents for small and medium enterprises and a minimum of 250 for micro-enterprises. 

“The respondents occupied senior positions in the MSMEs surveyed, being either business owners, partners, or CEOs; finance heads, CFOs, VP in charge of Finance, or Directors of Finance; or senior managers or senior executives.”

Their views were quantified with questions as this: On a scale of 0-10, “How satisfied are you with the availability of state, industry, and sector information for your business on the state website?” the EODB 2023 Report indicated.

The report determined the ease of doing business based on indicators like Infrastructure, Stable and secure environment, Transparency and accountability of information, Skills and Labour, Regulatory Environment, and Economic opportunity.

For instance, the Stable and Secure Environment indicator measured the survey respondents’ perception of how physically safe and secure their state was for business. 

These perceptions generally contradict the facts on the ground. 

The actual figures of fatalities from battles, violence against civilians, explosions/remote violence, and so on across the states between 2015 and 2023 suggest a different reality.

The state perceived to be most stable and secure for business is Gombe with a perceived satisfaction score of 7.11. 

In contrast, the MSMEs in Lagos perceive it as the most unstable and insecure State for business, with a score of 4.15 out of 10.

As per infrastructure, the EODB Index measured people’s opinions about electricity supply, ease of transport, and telecommunications and internet connectivity in their respective states.

The respondents from the southern parts of the country rated their states lower than their peers did in the north.

According to the results from the survey from the  EODB report, in Infrastructure,  Kebbi ranked 1st with a perceived satisfaction score of 6.56. 

For the electricity infrastructure, the State has the highest electricity supply score of 6.36. 

Also going by the feelings of the MSMEs in Kebbi, the State has the highest ease of transportation with a satisfaction score of 6.54, and equally the best access to telecommunication and Internet connectivity with a score of 7.11. 

The state ranked the lowest in infrastructure is Delta with a perceived score of 3.79.

How reliable are these perceptions?

Let’s compare them with the tangible realities on the ground.

Reality

Stable and Secure Environment

The EODB score showed that MSMEs in the Northern parts of the country perceive their states to be the most stable and secure for doing business. The reverse is the case for the MSMEs in the Southern parts of the country.

Yet, the crime statistics gathered from ACLED show that the 11 states with the highest number of fatalities from violence against civilians between 2015 and 2023 are in the northern parts of the country. 

The total number of fatalities in those 11 states is 84% of the total fatalities recorded in Nigeria between 2015 and 2023. 

The Ease of Doing Business Scores for security contradicted the number of fatalities in the respective states. 

For Instance, Borno, ranked 8th best safe and secure on the EODB report, has the highest fatalities from situations threatening the stability and security needed for doing business in the state. 

Conversely, the state perceived to be the least stable and secure for doing business is Lagos. Yet, the State recorded one of the lowest fatalities resulting from the usual causes of instability and insecurity. 

The EODB security scores give a weak reflection of the actual security situation on the ground, showing a weak relationship of 19%.

Infrastructure

Going by the opinions of the MSME proprietors and managers in the northern parts of the country, the northern part certainly has the set of infrastructure most suited for business. 

The EODB Infrastructure indicator assesses levels of electricity supply, ease of transport, telecommunications, and Internet connectivity.

However, further analysis of the Infrastructure sub-indicators using the National Bureau of Statistics data on electricity, transportation, telecommunication, and Internet connectivity provided contrary evidence.

Electricity

Electricity is one of the significant factors business owners consider before setting up their businesses in a state or region. 

The EODB report shows that all 19 states in the northern parts of the country are perceived to have the highest electricity supply needed for ease of doing business, except Borno, Nassarawa, Kogi, and the FCT.

However, electricity supply data from the 11 Electricity Distribution Companies (DISCOS) contradict these perception scores.

Five of the 11 DISCOS service the northern parts of the country. These are the Kaduna, Kano, Yola, Jos, and Abuja DISCOS.

The rest service the southern parts of the country. These are the Ibadan, Enugu, Eko, Ikeja, Benin, and Port Harcourt DISCOS.