Starting a business in Nigeria is an exciting venture, but choosing the right location is important for success. This guide, compiled by experts on the Nigerian business landscape, will help you with the knowledge to identify the state that best suits your needs.
We’ll take a look at some of the key factors like ease of doing business rankings, available resources, and market potential to help you make an informed decision.
Let’s get started.
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List of Top 10 States For Doing Business In Nigeria
While there are many factors to consider when choosing a location for your business in Nigeria, several states consistently rank high in terms of ease of doing business, resources, and market potential.
Here’s our list of the Top 10 States for Business in Nigeria for 2024, based on recent rankings and economic indicators:
Rank | State | Key Strengths |
|---|---|---|
1 | Gombe | Secure environment, efficient regulations, infrastructure development |
2 | Jigawa | Business-friendly atmosphere, government support for entrepreneurs |
3 | Sokoto | Skilled workforce, agricultural potential |
4 | Kebbi | Stable environment, growing market |
5 | Katsina | Strategic location, infrastructure development |
6 | Anambra | Entrepreneurial spirit, well-developed infrastructure |
7 | Kaduna | Large talent pool, diversified economy |
8 | Oyo | Central location, large consumer base, growing industrial sector |
9 | Kano | Vast market, trade, and manufacturing opportunities |
10 | Ogun | Manufacturing and industry hub, excellent infrastructure, proximity to Lagos |
Let’s dive Into each state, and learn what makes them ideal for your businesses.
1. Gombe
Gombe State, in northeastern Nigeria, is an ideal state for business ease. This surprising rise is basically from efficient regulations, streamlined registration, and government support for entrepreneurs, as shown by their top ranking in the 2024 PEBEC report.
Gombe is actively investing in infrastructure like transportation, power, and communication, creating a reliable and cost-effective environment.
Additionally, the state enjoys relative peace and security which is essential for business continuity. While Gombe offers opportunities across industries, some sectors stand out.
Fertile land and a focus on agriculture make it ideal for businesses in crop production, livestock rearing, and food processing, with readily available resources and government initiatives.
The improving infrastructure and growing consumer base make it attractive for light manufacturing companies. Gombe’s location also presents opportunities for trade and distribution, with potential for improved logistics as transportation networks develop.
Success stories like “Gombe Rice Mills” highlight the benefits. This local company has seen significant growth due to government support and available raw materials.
Gombe’s impressive score of 7.15 on the 2024 PEBEC ranking also emphasizes its commitment to promoting a thriving business environment.
However, consider all factors. Depending on your industry, skilled labor availability could be a concern. Training programs or partnerships with local institutions can be solutions.
Gombe’s location may be far from major markets compared to coastal cities, but the improving infrastructure could bridge this gap.
2. Jigawa
Jigawa State is another top state for business, following closely behind Gombe. Jigawa has a strong focus on attracting entrepreneurs, with a business-friendly atmosphere and government support programs.
Similar to Gombe, Jigawa is investing in infrastructure development to create a more reliable operating environment. Also, the state enjoys a reputation for stability.
While Jigawa presents opportunities across various sectors, its agricultural potential is impressive. The state is a major producer of crops like rice, sesame, and groundnut, making it ideal for businesses in agriculture and agro-processing.
Government initiatives and available resources also enhance the appeal of these industries. Jigawa’s “Maigatari Border Free Zone” initiative is a unique program attracting businesses involved in international trade.
This zone offers benefits like tax immunities and streamlined customs procedures. The state’s commitment to promoting business is clear in its ranking on the 2024 PEBEC report.
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3. Sokoto
Sokoto State offers a great option for businesses desiring a skilled workforce and agricultural potential. This state, ranked competitively in the 2024 PEBEC report, has strong talent across different sectors.
Businesses in manufacturing and construction can benefit from available labor. Sokoto’s agriculture is another key strength. The state is a major producer of crops like cotton, rice, and peanuts, and the fertile land creates opportunities for businesses in agriculture and agro-processing.
Government initiatives, such as subsidized fertilizers and access to loans, also support these industries. However, a potential consideration for some businesses may be access to advanced resources or specialized technology.
We also learn about the success stories like Sokoto Thread Mills, a company experiencing massive growth in textile production, highlighting the potential of Sokoto’s skilled workforce.
4. Kebbi
Kebbi State is another ideal place for business In Nigeria, with a stable environment and a growing market for businesses seeking a strategic location.
With fantastic security results, this state is ranked in the 2024 PEBEC report. Kebbi’s position in the northwest region presents opportunities for businesses looking to expand their reach to neighboring states.
Besides, the state’s economy is experiencing steady growth, creating a larger consumer base for various industries. Agriculture is a major sector in Kebbi, with the state being a prominent producer of rice, soybeans, and onions.
Businesses in agriculture and agro-processing can benefit from available resources and government support programs. However, Kebbi’s distance from major ports can be a consideration for businesses reliant on international trade.
A potential example of success is Kebbi Mega Rice Farm, a large-scale initiative attracting investment and showcasing the prospect of Kebbi’s agricultural sector.
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5. Katsina
Katsina State is quite impressive for its strategic location and focus on infrastructure development which makes the state an attractive option for businesses looking for a central hub.
This state offers easy access to surrounding markets. Katsina’s ongoing investments in transportation networks, power supply, and communication facilities are creating a more reliable and cost-effective environment for businesses.
This could be particularly beneficial for companies involved in logistics, distribution, and manufacturing that depend on efficient infrastructure. The state also boasts a strong agricultural sector, with a focus on crops like cotton, groundnut, and millet.
However, depending on your industry’s needs, access to a highly specialized workforce can require additional consideration. Investing in training programs or partnering with local institutions could be potential solutions.
6. Anambra
Anambra State, recognized for its entrepreneurial energy and well-developed infrastructure, is a powerhouse in the southeastern region.
Ranked in the 2024 PEBEC report, Anambra encourages a business environment that flourishes on innovation and collaboration.
The state has a strong presence of commercial banks and financial institutions, making it a hub for financing and business development.
Additionally, Anambra’s infrastructure is quite developed, with reliable transportation networks, power supply, and communication facilities.
This creates a more favorable environment for businesses in different sectors. Anambra is a particularly attractive location for businesses in trade, manufacturing, and finance.
The state is home to Onitsha, one of the largest commercial cities in Nigeria, and Nnewi, a well-known industrial center. Companies like Innoson Vehicle Manufacturing, a leading Nigerian automobile company headquartered in Anambra, exemplify the state’s potential for manufacturing.
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7. Kaduna
One of the companies doing well In Kano state is Kaduna Textiles Limited, which has been experiencing renewed growth to tell us more about the potential of Kaduna’s manufacturing sector.
However, it’s important to consider that security concerns might exist in some remote areas of the state. Despite these considerations, Kaduna has a mix of businesses seeking a large talent pool and a diversified economy.
Kaduna boasts a well-educated workforce In different sectors. This makes it an attractive location for businesses requiring skilled labor in manufacturing, technology, or service industries.
Also, Kaduna’s economy does not rely on a single sector to offer stability and opportunities for businesses. The state is strong in manufacturing, agriculture, and trade.
8. Oyo
Oyo State’s central location within Nigeria makes it a fantastic choice for businesses pursuing a central hub. This state boasts a large consumer base, which is great for various products and services.
The state is experiencing growth in its industrial sector, creating opportunities for businesses involved in manufacturing, logistics, and distribution.
Also, Oyo’s strong infrastructure network, including major highways and an international airport, facilitates efficient transportation of goods and services.
Several success stories underscore the possibility of Oyo for businesses. OLAM Feeds, a leading animal feed producer with a powerful presence in Oyo State, is a prime example. Their thriving operations demonstrate the prospect of Oyo’s growing industrial sector. Other businesses are finding success in Oyo’s supportive environment for entrepreneurs.
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9. Kano
Kano State is a major commercial center, which makes it an ideal location for businesses looking for an established trade network and a large consumer base.
This state offers a vast market with a growing population, making It particularly attractive for businesses involved in trade, distribution, and retail.
Kano’s strategic location at the crossroads of major trade routes historically positioned it as a center for commerce. This legacy continues today, with strong connections to neighboring countries and easy transportation networks within Nigeria.
Dangote Group, a prominent Nigerian conglomerate, has a presence in Kano. Also, Kano is a hub for smaller businesses, with a thriving informal sector.
10. Ogun
Ogun is known as the “Industrial Capital of Nigeria” for a reason. The state government invests in industrial development, with several operational industrial parks.
This creates a supportive environment for businesses in manufacturing, construction, and logistics. Besides, Ogun’s proximity to Lagos allows for the transportation of goods and easy access to a large consumer base.
Different successful companies testify to Ogun’s reputation as a manufacturing hub. For example, Dangote Cement, a leading cement producer in Africa, has a major plant in Ogun.
This underlines the state’s ability to support large-scale industrial operations. Ogun might have a higher cost of living compared to some other states.
However, the benefits of a large market-developed infrastructure and established industrial presence can outweigh this factor for many businesses.
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