HowNG takes a look at the list of ten states to consider when beginning a business, as well as the places that will be targeted in 2024.
Key business variables such as the availability of government incentives, subsidies, or programs were used to rank the states.
There is also the prospect of forming alliances with local businesses or organizations that might provide assistance and chances for business growth.
Another statistic is which states safeguard intellectual property and enforce contracts and agreements, as well as the availability of trained labor, suppliers, and scaling resources.
Here are the top ten cities in Nigeria to consider for launching a business in 2024.
1. Lagos state
According to the Brand Finance City Index 2023, Lagos is the fifth best African city for people to live, work, and invest in.
Lagos is one of Africa’s busiest cities, with a population of over 20 million people, which is larger than the population of certain African countries.
The state’s vastness and cosmopolitanism make it one among the greatest areas in Nigeria to start a business.
This variety can assist you in tailoring your marketing and commercial tactics to different consumer groups.
Furthermore, Lagos combines features such as a big and diverse market, robust infrastructure, government business support, and a well-connected ecosystem, making it an appealing alternative for entrepreneurs and firms wishing to prosper in Nigeria.
According to Lagos Global Reports, the state accounts for 90% of the country’s foreign commerce flow and provides more than 30% of Nigeria’s GDP growth.
Furthermore, Lagos accounts for more than 60% of the country’s energy and has superior infrastructure than many other Nigerian states.
There is also consistent access to energy, transportation networks, and contemporary communication and internet services, all of which are necessary for corporate activities.
The Lagos state government provides a CARES Grant Program for Entrepreneurs/Business Owners, which is open to entrepreneurs and business owners.
The state government also offers numerous tax breaks to business owners, including no tax on rental revenue during the pioneer period, no tax on capital gains on property sold during the first 3-5 years, and no tax on capital gains from property sold within the first 3-5 years. CGT-10% WHT-10% Stamp duty is 2%. Residential property tax of 0.5% – Malls-1.25% – Industrial – 0.5% Subsidizing PPP participants’ statutory costs, Accelerating the issue of land titles to allow investors to receive money more quickly.
Another reason Lagos is appealing is that it is home to two of Nigeria’s major ports: Lagos Port Complex and Tin Can Island Port Complex.
These ports connect Lagos to suppliers and markets both domestically and abroad.
It is also strategically located, with close proximity to Nigeria’s biggest ports, which can promote efficient supply chains and raw material access.
However, rigorous market research, a good business plan, and awareness of the competitive character of the city’s economic environment are all required.
Businesses will always thrive in Abuja, Nigeria’s capital city, according to business expert Chiaka Orjiako.
Abuja, like Lagos, is cosmopolitan, with thousands of local and foreign investors flocking there in search of greener pastures.
Abuja is regarded as one of Africa’s wealthiest cities, making it an ideal location for establishing a business.
Human and material resources are constantly on hand. In comparison to 2015, Abuja is extremely safe for all commercial organizations.
The Federal Government Territory Administration (FCTA) has announced that the Federal Government has provided several fundings to Abuja businesses in order to improve the ease of doing business in Abuja.
Strategic Outreach Support (SOS) also donated approximately N5 million in financing to support market and local women traders in Dutse, Abuja, under the auspices of the Bwari Area Council.
As a result, launching a business in Abuja opens the door to connections and financial assistance.
Sales, school bus service, school uniform design/supply, transportation firm, agricultural and farm products (including beef/fish/chicken), building supplies, and interior design are among the enterprises Orjiako believes will thrive in Abuja.
Others include electronics retailers, furniture stores, security firms, dog breeders, event hall/tent rentals, and human resource services. Affordable solar energy for houses, computerized mechanic services, concierge services, souvenir making, event management, delivery services, home tutoring services, and ‘haute couture’ fashion design services are also available.
3. River State
River State is another appealing business and investment destination, with various advantages for companies.
Nyesom Wike’s eight-year administration left waterways with a plethora of commercial options, having developed 1000km of roads during his term.
A solid road network is beneficial to logistics and distribution enterprises.
The presence of several oil and gas enterprises, refineries, and petrochemical industries gives opportunity for businesses that provide services to these industries, such as logistics, engineering, and supply chain management.
Unlike other regions of the Niger Delta, Port Harcourt and other Rivers State urban districts have seen improved security in recent years.
The state government offers numerous tax breaks and assistance to farmers.
Rivers State is well-known for its cultural richness and tourism potential, which can benefit firms in the hotel and tourism industries.
According to a World Bank analysis from 2018, Kaduna is the best state in Nigeria for doing business.
The state is also Nigeria’s third-largest consumer market, with a significant market for goods and services in all sectors.
The state’s economy is diverse, having opportunities in a variety of industries. While it has a major agricultural presence, particularly in the production of crops such as maize, sorghum, and ginger, it is also becoming known for its manufacturing and industrial operations, such as steel production, cement making, and textile manufacturing.
The annual Kaduna Economic and Investment Summit is always well-attended by thousands of company owners who are doing well in the state.
The state also maintains a Kaduna Investment Promotion Agency, which provides private sector investors with a variety of opportunities in agriculture, manufacturing, mining, and tourism, among others.
Kaduna is a refuge for investors, with a one-of-a-kind mix of resources, market, and business environment that no other state in Nigeria can match.
5. Oyo state
Ibadan, as the capital of Nigeria’s largest state, undoubtedly has numerous business prospects in industries such as agriculture, healthcare, education, tourism, and infrastructure development.
The capital still possesses a big amount of fertile land ideal for agriculture and a sizable population, providing a ready market for agricultural products.
Data suggest that Oyo State is a ready investment market with a landmass and population, providing it a comparative and competitive advantage that just a few Nigerian states have.
The large consumer base opens up potential for enterprises to enter a variety of areas, from retail and services to manufacturing and agriculture.
The state government established the Bureau of Public Procurement as a separate body and hired a Director General who previously worked in the private sector. This agency’s mandate includes the creation of opportunities for SMEs.
One of the explanations is that Oyo State has established a favorable climate for the private sector to grow. In 2022 alone, the state attracted $65 million in Foreign Direct Investment (FDI).
Seyi Makinde, the state’s governor, has tried to transform the Akufo, Eruwa, and Ilora Farm Settlements into agricultural industrial clusters.
Feldspar, Talc, Marble, Pyraiba, Gold, Tourmaline, Quartz, Beryl, and Granite reserves abound in the city. The city of Ibadan has an 11-MW Independent Power Project (IPP).
Finally, Ibadan’s proximity to Lagos, Nigeria’s economic powerhouse, provides firms with the opportunity to reach a large market and connect with suppliers and clients in Lagos.
6. Kano State
It is also a popular destination for low-cost labor, a welcoming business environment, and tax breaks.
Kano State is one of the greatest areas to do business in Nigeria because of its infrastructure, diversity, accessibility, availability of raw materials for industrial production, and historical significance.
Kano also has a huge and relatively inexpensive labor force, making it an appealing alternative for enterprises trying to reduce operational costs.
Many banks and other multinational corporations have a substantial presence in Kano, demonstrating the city’s prominence as a booming business center.
The agricultural sector, particularly the production of groundnuts and cotton, is the state’s principal source of revenue.
The service, commerce, and trade industries all contribute significantly to the state’s economic growth.
Kano State is well-known for its production of hides, skins, cotton, chili pepper, garlic, and gum Arabic.
Gold, Arabic jewelry, footwear, plastics, cosmetics, pottery, dairy goods, vegetable oil, pharmaceuticals, and food and beverages have all earned a name for themselves in the state.
This vast range of economic activity highlights Kano’s importance as a Nigerian industrial and commercial powerhouse.
7. Ogun State
Ogun state is close to Lagos, Nigeria’s commercial and economic hub, giving firms easy access to a big consumer market as well as transportation linkages.
Its proximity to Lagos enables enterprises to capitalize on Lagos’ economic possibilities and infrastructure advantages while often benefiting from lower operational costs.
Many manufacturing and industrial enterprises are based in Abeokuta, including the automobile, cement, and food processing industries. Because of the concentration of sectors, opportunities for business synergy and support services exist.
Ogun State has a transparent tax system, with quarterly reports published.
The government of Ogun State has launched a number of efforts to encourage investment and company development.
The existence of higher education institutions, particularly universities, adds to a pool of well-educated professionals and workers in Ogun State.
In recent years, the state’s security has improved, producing a more suitable atmosphere for corporate operations.
8. Gombe State
Gombe state ranks first in the Subnational Ease of Doing Business (EoDB) Report, with an EoDB score of 7.15.
The performance of the state is notable for various reasons, including its third-place ranking in infrastructure, transparency and accessibility of information (2nd), skills and labor (9th).
It is also lauded for its secure and stable environment, which is ranked first, in regulatory environment, which is ranked fifth, and in economic potential, which is ranked thirteenth. These rankings indicate Gombe’s commitment to creating a business-friendly environment.
9. Akwa Ibom
The transformation in Akwa Ibom State’s security condition during the previous few years has been fairly dramatic.
The state is unquestionably one of the most calm and secure areas to reside in the country, if not the top of the list.
One cannot discuss the friendly business environment in Akwa Ibom without addressing the government’s desire to improve the ease of doing business.
Among the several incentives is a first-of-its-kind effort that has hastened the issuance of Certificates of Occupancy (C of O) for investors intending to establish enterprises in the state.
The futuristic Ibom Industrial City, which spans four local government areas, is one of the sites that potential investors may find appealing. The City, which is intended to be a national and regional economic hub, would house many high-profile companies, including a refinery, petrochemical and fertilizer factories, a power plant, and manufacturing facilities for a variety of products.
There’s also the Ibom Deep Sea Port, which Vice President Yemi Osinbajo promised will be operating soon.
The port will serve as Nigeria’s transhipment facility for the West and Central African regions, occupying 2,565 hectares of land over three local government areas. It would provide seaside access to a railway line that would connect to the Victor Attah International Airport. It would also benefit investors both within and outside of the state who are interested in the marine industry, petrochemicals, auto factories, and power plants.
Akwa Ibom is well-known in Nigeria for its tourism and hospitality industries. Given the amount of hotels that have sprung up in recent years, investors are already taking advantage of the favorable climate to invest heavily in hospitality.
The decision of the Kenya-based Icon Group Hotel Africa, a household name in hospitality on the continent, to partner with the state government in the operation of the Ibom Icon Hotel and Resorts, the state’s leading hospitality facility, is a testament to the allure of hospitality for investors in Akwa Ibom.
10. Anambra state
Onitsha, a thriving commercial metropolis in southern Nigeria, is one of the greatest cities in Nigeria for business because of its strategic position, vibrant trade, and various economic activity.
Onitsha is well-known in Nigeria as a significant trading hub, particularly for wholesale and retail trade.
Entrepreneurs can find work in a variety of industries, including import/export, retail, and distribution.
The Onitsha Main Market is one of West Africa’s largest and busiest markets, acting as a hub for a variety of economic activity.
The city’s manufacturing sector is expanding, with companies in food processing, textile manufacture, plastics, and other fields.
The city’s proximity to local and regional markets can benefit entrepreneurs in several fields.