By Florence Allor
The latest Subnational Ease of Doing Business, EoDB, assessment released by the Presidential Enabling Business Environment Council, PEBEC, has exposed sharp disparities in the performance of Nigerian states, revealing deep structural weaknesses in more than two-thirds of subnational governments and the agencies that serve them.
The 2025 report—described as the most detailed diagnostic of Nigeria’s business environment since PEBEC’s creation in 2016—shows that while pockets of reform are emerging, systemic challenges continue to frustrate over 39 million Micro, Small and Medium-sized Enterprises, MSMEs, across the country.
According to the assessment, over 70% of states underperformed across five critical reform indicators: investor aftercare, access to credit, interstate trade facilitation, commercial dispute resolution and electricity reliability. These weaknesses, the report warns, are depressing productivity, restricting investment inflows and widening competitiveness gaps between states.
Although tax digitalisation and selected online processes have improved nationwide, the review notes that the majority of states still lack structured investor-support systems, predictable judicial processes, harmonised trade rules and functional electricity markets—elements essential for sustaining modern businesses.
PEBEC identified five high-impact interventions required for urgent adoption by state governments. These include the establishment of statewide investor aftercare systems, MSME credit-enablement schemes, harmonised interstate trade rules, expanded commercial justice mechanisms and upgraded power solutions for production clusters. The Council emphasised that these interventions represent low-hanging fruits capable of delivering significant economic results within short timelines if states demonstrate political will.
The report also presents a new performance ranking, with Lagos, Kaduna, Oyo, the FCT and Ogun emerging as the top five states, reflecting sustained investment in digitalisation, regulatory clarity and coordinated reform programmes. The Southwest region recorded the strongest overall performance, while the North-East remained the least competitive due to entrenched structural constraints.
Conversely, several states—particularly in the North-West and parts of the South-South—were flagged for weak institutional foundations, poor infrastructure readiness, fragmented tax and trade regimes and limited administrative automation. States such as Jigawa, Zamfara, Katsina and others in the lower tier recorded minimal progress in electricity reforms, land administration digitisation and dispute-resolution systems.
The evaluation, based on 16 indicators and 36 sub-indicators, relied exclusively on verified administrative and regulatory data drawn from agencies such as the Central Bank of Nigeria, CBN, Nigerian Electricity Regulatory Commission, NERC, Nigerian Communications Commission, NCC, National Bureau of Statistics, NBS, and state MDAs. It emphasised transparency and replicability, using a 73-point scoring framework to benchmark states.
The report highlights that many states are quick to implement administrative reforms requiring minimal institutional overhaul—such as digital connectivity and website upgrades—while avoiding deeper structural changes in areas like electricity, justice delivery, logistics and credit markets.
PEBEC says the Subnational EoDB Review will now serve as an annual baseline for tracking reform momentum and guiding state governments’ economic-transformation plans. It urges governors to prioritise actionable reforms rather than cosmetic improvements, insisting that Nigeria’s economic future increasingly depends on the competitiveness of its states.
With MSMEs accounting for 99.6% of all enterprises, the Council warned that delays in addressing the identified gaps will continue to undermine national growth prospects.
The report concludes with a clear message: without strong, coordinated and technology-driven reforms at the subnational level, Nigeria cannot build a resilient, investment-ready economy capable of creating sustainable jobs.
