Publication: An Assessment of the Investment
Climate in Nigeria
Loading...
Published
2009
ISSN
Date
2012-03-19
Author(s)
Editor(s)
Abstract
Nigeria's vision of 2020 is a bold desire to be among the top twenty economies by the year 2020. The economy has posted impressive growth figures since 2003 driven by higher oil prices and a series of home-grown, economic reforms. The country is now firmly on the road to middle-income status. This Investment Climate Analysis is built on a 2,300 firm survey and provides evidence-based recommendations designed to support the vision 2020. Survey results represent investment climate status in Nigeria and are grouped by the following topics: firm productivity and business environment, comparison of state level investment climates, access to finance, entrepreneurship and managerial capacity in firms, and investment climate aspects. The authors conclude that stakeholder consultations on the diagnostic work, policy assessment, and design would improve Nigeria's investment climate.
Link to Data Set
Citation
“Iarossi, Giuseppe; Mousley, Peter; Radwan, Ismail. 2009. An Assessment of the Investment
Climate in Nigeria. Directions in Development ; private sector development. © World Bank. http://hdl.handle.net/10986/2608 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication Democratic Republic of Congo Urbanization Review(Washington, DC: World Bank, 2018)The Democratic Republic of Congo has the third largest urban population in sub-Saharan Africa (estimated at 43% in 2016) after South Africa and Nigeria. It is expected to grow at a rate of 4.1% per year, which corresponds to an additional 1 million residents moving to cities every year. If this trend continues, the urban population could double in just 15 years. Thus, with a population of 12 million and a growth rate of 5.1% per year, Kinshasa is poised to become the most populous city in Africa by 2030. Such strong urban growth comes with two main challenges – the need to make cities livable and inclusive by meeting the high demand for social services, infrastructure, education, health, and other basic services; and the need to make cities more productive by addressing the lack of concentrated economic activity. The Urbanization Review of the Democratic Republic of Congo argues that the country is urbanizing at different rates and identifies five regions (East, South, Central, West and Congo Basin) that present specific challenges and opportunities. The Urbanization Review proposes policy options based on three sets of instruments, known as the three 'I's – Institutions, Infrastructures and Interventions – to help each region respond to its specific needs while reaping the benefits of economic agglomeration The Democratic Republic of the Congo is at a crossroads. The recent decline in commodity prices could constitute an opportunity for the country to diversify its economy and invest in the manufacturing sector. Now is an opportune time for Congolese decision-makers to invest in cities that can lead the country's structural transformation and facilitate greater integration with African and global markets. Such action would position the country well on the path to emergence.Publication Strengthening Competitiveness In Bangladesh—Thematic Assessment(Washington, DC: World Bank, 2016-07-15)This is volume 2 of a three-volume publication on Bangladesh’s trade prospects. Bangladesh’s ambition is to build on its very solid growth and poverty reduction achievements, and accelerate growth to become a middle income country by 2021, and share prosperity more widely amongst its citizens. This includes one of its greatest development challenges: to provide gainful employment to the over 2 million people that will join the labor force each year over the next decade. Moreover, only 54.1 million of its 94 million working age people are employed. Bangladesh needs to use its labor endowment even more intensively to increase growth and, in turn, to absorb the incoming labor. The Diagnostic Trade Integration Study identifies the following actions centered around four pillars to sustain and accelerate export growth: (1) breaking into new markets through a) better trade logistics to reduce delivery lags ; as world markets become more competitive and newer products demand shorter lead times, to generate new sources of competitiveness and thereby enable market diversification; and b) better exploitation of regional trading opportunities in nearby growing and dynamic markets, especially East and South Asia; (2) breaking into new products through a) more neutral and rational trade policy and taxation and bonded warehouse schemes; b) concerted efforts to spur domestic investment and attract foreign direct investment, to contribute to export promotion and diversification, including by easing the energy and land constraints; and c) strategic development and promotion of services trade; (3) improving worker and consumer welfare by a) improving skills and literacy; b) implementing labor and work safety guidelines; and c) making safety nets more effective in dealing with trade shocks; and (4) building a supportive environment, including a) sustaining sound macroeconomic fundamentals; and b) strengthening the institutional capacity for strategic policy making aimed at the objective of international competitiveness to help bring focus and coherence to the government’s reform efforts. This second volume provides in-depth analysis across seven cross-cutting themes that underpin most of the findings of pillars 1 and 2 above.Publication An Investment Framework for Nutrition(Washington, DC: World Bank, 2017-04-12)The report estimates the costs, impacts and financing scenarios to achieve the World Health Assembly global nutrition targets for stunting, anemia in women, exclusive breastfeeding and the scaling up of the treatment of severe wasting among young children. To reach these four targets, the world needs $70 billion over 10 years to invest in high-impact nutrition-specific interventions. This investment would have enormous benefits: 65 million cases of stunting and 265 million cases of anemia in women would be prevented in 2025 as compared with the 2015 baseline. In addition, at least 91 million more children would be treated for severe wasting and 105 million additional babies would be exclusively breastfed during the first six months of life over 10 years. Altogether, achieving these targets would avert at least 3.7 million child deaths. Every dollar invested in this package of interventions would yield between $4 and $35 in economic returns, making investing in early nutrition one of the best value-for-money development actions. Although some of the targets—especially those for reducing stunting in children and anemia in women—are ambitious and will require concerted efforts in financing, scale-up, and sustained commitment, recent experience from several countries suggests that meeting these targets is feasible. These investments in the critical 1000 day window of early childhood are inalienable and portable and will pay lifelong dividends – not only for children directly affected but also for us all in the form of more robust societies – that will drive future economies.Publication At a Crossroads(World Bank, Washington, DC, 2017-05-02)Higher education (HE) has expanded dramatically in Latin America and the Caribbean (LAC) since 2000. While access became more equitable, quality concerns remain. This volume studies the expansion, as well as HE quality, variety and equity in LAC. It investigates the expansion’s demand and supply drivers, and outlines policy implications.Publication Getting to Work(Washington, DC: World Bank, 2020-03-02)Sri Lanka has shown remarkable persistence in low female labor force participation rates—at 36 percent in the past two years, compared with 75 percent for same-aged men—despite overall economic growth and poverty reduction over the past decade. The trend stands in contrast to the country’s achievements in human capital development that favor women, such as high levels of female education and low total fertility rates, as well as its status as a lower-middle-income country. This study intends to better understand the puzzle of women’s poor labor market outcomes in Sri Lanka. Using nationally representative secondary survey data—as well as primary qualitative and quantitative research—it tests three hypotheses that would explain gender gaps in labor market outcomes: (1) household roles and responsibilities, which fall disproportionately on women, and the associated sociophysical constraints on women’s mobility; (2) a human capital mismatch, whereby women are not acquiring the proper skills demanded by job markets; and (3) gender discrimination in job search, hiring, and promotion processes. Further, the analysis provides a comparison of women’s experience of the labor market between the years leading up to the end of Sri Lanka’s civil war (2006–09) and the years following the civil war (2010–15). The study recommends priority areas for addressing the multiple supply- and demand-side factors to improve women’s labor force participation rates and reduce other gender gaps in labor market outcomes. It also offers specific recommendations for improving women’s participation in the five private sector industries covered by the primary research: commercial agriculture, garments, tourism, information and communications technology, and tea estate work. The findings are intended to influence policy makers, educators, and employment program practitioners with a stake in helping Sri Lanka achieve its vision of inclusive and sustainable job creation and economic growth. The study also aims to contribute to the work of research institutions and civil society in identifying the most effective means of engaging more women—and their untapped potential for labor, innovation, and productivity—in Sri Lanka’s future.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Nigeria 2011(World Bank, Washington, DC, 2011-06)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.Publication The Investment Climate in South Asia : Volume 2. Country Profiles(World Bank, Washington, DC, 2007-01)This report summarizes the findings of Investment Climate Assessments (ICAs) carried out for all countries in the South Asia region. It compares South Asian countries to countries in other regions, analyzes similarities and differences within the region, and identifies the way forward in improving the investment climate. The first volume analyzes similarities and differences within the region and between South Asia and the comparator countries. Chapter 1 assesses the investment climate in South Asia vis-a-vis a number of comparator countries. Chapter 2 analyzes the dimensions of the South Asian investment climate. Chapter 3 highlights the costs imposed by deficiencies in the investment climate. Chapter 4 reviews the policy recommendations proposed by the various lCA surveys for the different dimensions identified: infrastructure (power, transportation), factors of production (finance, labor market and skills, technology), regulatory burden and corruption, and risk and uncertainty (policy predictability, judicial reforms, security). The second volume provides the detailed and standardized country-specific data underpinning the analysis in Volume 1.Publication The Investment Climate in South Asia : Volume 1(World Bank, Washington, DC, 2006-09)This report summarizes the findings of Investment Climate Assessments (ICAs) carried out for all countries in the South Asia region. It compares South Asian countries to countries in other regions, analyzes similarities and differences within the region, and identifies the way forward in improving the investment climate. The first volume analyzes similarities and differences within the region and between South Asia and the comparator countries. Chapter 1 assesses the investment climate in South Asia vis-a-vis a number of comparator countries. Chapter 2 analyzes the dimensions of the South Asian investment climate. Chapter 3 highlights the costs imposed by deficiencies in the investment climate. Chapter 4 reviews the policy recommendations proposed by the various lCA surveys for the different dimensions identified: infrastructure (power, transportation), factors of production (finance, labor market and skills, technology), regulatory burden and corruption, and risk and uncertainty (policy predictability, judicial reforms, security). The second volume provides the detailed and standardized country-specific data underpinning the analysis in Volume 1.Publication Financing Small and Medium Enterprises in the Republic of South Africa(World Bank, Washington, DC, 2011)Numerous studies worldwide have highlighted the important contribution made by small and medium-sized enterprises (SMEs) to employment, income and economic growth. In a study of 76 developed and developing economies, Ayyagari and others (2007) found that SMEs account for more than 60 percent of total manufacturing employment and that SMEs contributed significant proportions of Gross Domestic Product (GDP). SME growth requires external financing, but constraints to accessing credit, consistently rated as some of the greatest barriers to the operation and growth of firms, affect SMEs more severely than large firms (Beck and Demirguc-Kunt 2006; Beck and others 2006). The purposes of this report are to: a) analyze the availability of bank finance to SMEs in South Africa and how availability might be enhanced in the context of the economic downturn; and b) offer concrete policy recommendations on how to lessen obstacles to bank SME financing and reduce the negative effects of the economic downturn (or of a similar downturn in future) on access to finance. The report is structured in 5 sections: section two provides a short overview of existing studies and data on SME finance in South Africa. Section three presents the main results of the surveys. Section four provides policy considerations. Section five concludes.Publication Formal Versus Informal Finance : Evidence from China(World Bank, Washington, DC, 2008-01)China is often mentioned as a counterexample to the findings in the finance and growth literature since, despite the weaknesses in its banking system, it is one of the fastest growing economies in the world. The fast growth of Chinese private sector firms is taken as evidence that it is alternative financing and governance mechanisms that support China's growth. This paper takes a closer look at firm financing patterns and growth using a database of 2,400 Chinese firms. The authors find that a relatively small percentage of firms in the sample utilize formal bank finance with a much greater reliance on informal sources. However, the results suggest that despite its weaknesses, financing from the formal financial system is associated with faster firm growth, whereas fund raising from alternative channels is not. Using a selection model, the authors find no evidence that these results arise because of the selection of firms that have access to the formal financial system. Although firms report bank corruption, there is no evidence that it significantly affects the allocation of credit or the performance of firms that receive the credit. The findings suggest that the role of reputation and relationship based financing and governance mechanisms in financing the fastest growing firms in China is likely to be overestimated.
Users also downloaded
Showing related downloaded files
Publication Europe and Central Asia Economic Update, Spring 2025: Accelerating Growth through Entrepreneurship, Technology Adoption, and Innovation(Washington, DC: World Bank, 2025-04-23)Business dynamism and economic growth in Europe and Central Asia have weakened since the late 2000s, with productivity growth driven largely by resource reallocation between firms and sectors rather than innovation. To move up the value chain, countries need to facilitate technology adoption, stronger domestic competition, and firm-level innovation to build a more dynamic private sector. Governments should move beyond broad support for small- and medium-sized enterprises and focus on enabling the most productive firms to expand and compete globally. Strengthening competition policies, reducing the presence of state-owned enterprises, and ensuring fair market access are crucial. Limited availability of long-term financing and risk capital hinders firm growth and innovation. Economic disruptions are a shock in the short term, but they provide an opportunity for implementing enterprise and structural reforms, all of which are essential for creating better-paying jobs and helping countries in the region to achieve high-income status.Publication Morocco Economic Update, Winter 2025(Washington, DC: World Bank, 2025-04-03)Despite the drought causing a modest deceleration of overall GDP growth to 3.2 percent, the Moroccan economy has exhibited some encouraging trends in 2024. Non-agricultural growth has accelerated to an estimated 3.8 percent, driven by a revitalized industrial sector and a rebound in gross capital formation. Inflation has dropped below 1 percent, allowing Bank al-Maghrib to begin easing its monetary policy. While rural labor markets remain depressed, the economy has added close to 162,000 jobs in urban areas. Morocco’s external position remains strong overall, with a moderate current account deficit largely financed by growing foreign direct investment inflows, underpinned by solid investor confidence indicators. Despite significant spending pressures, the debt-to-GDP ratio is slowly declining.Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.