Lagos State has been ranked as the best state for doing business in Nigeria, reaffirming its position as the country’s economic powerhouse, according to a new nationwide assessment of business environments.
The report was unveiled in Abuja on March 28 during the Reform and Diplomatic Roundtable 2026, organised by the Presidential Enabling Business Environment Council in collaboration with UK International Development and the Nigeria Economic Stability and Transformation Programme.
Top-performing states
Lagos secured the top position due to its strong regulatory framework, infrastructure, and institutional transparency. It was followed by Kaduna State, Oyo State, the Federal Capital Territory, Ogun State, Enugu State, Plateau State, Ekiti State, Kano State, and Nasarawa State.
State-level reforms now critical
The report emphasised that Nigeria’s economic growth is increasingly influenced by how well state governments tackle local business challenges.
With over 39 million Micro, Small and Medium-sized Enterprises (MSMEs) operating nationwide, subnational performance is now a key determinant of economic resilience and long-term growth.
It noted that while federal reforms remain important, the real business climate is shaped at the state level, where companies interact daily with regulatory systems and infrastructure.
How the ranking was determined
The assessment used 16 key indicators, including electricity access, infrastructure, digital connectivity, land administration, taxation, trade logistics, and workforce development.
These were further broken down into 36 sub-indicators tied to administrative data, ensuring that rankings reflect both policy frameworks and actual service delivery.
Why Lagos ranked first
Lagos stood out due to its relatively stable electricity supply, efficient land administration, and functional commercial courts.
The state also benefits from strong market access, a skilled workforce, and critical infrastructure such as airports and rail networks, which support business operations.
However, the report identified areas for improvement, including issues like touting, weak investor aftercare systems, and uneven digital connectivity in less urbanised areas.
Regional performance gaps
A regional breakdown showed uneven performance across Nigeria’s geopolitical zones.
The South-West dominated the top 10 with four states, followed by the North-Central with three. The North-West had two states, while the South-East had only one entry.
Notably, no state from the North-East or South-South regions made the top 10 list.
Spotlight on Enugu
Enugu State, the only South-East state ranked, placed sixth with strengths in digital infrastructure, electricity access, and workforce development.
However, it continues to face challenges related to access to credit and investor support systems.
Key challenges and recommendations
The report highlighted persistent barriers such as slow business registration processes and limited transparency, which discourage many MSMEs from formalising their operations.
To address these issues, it outlined key reforms including digitising land administration, improving access to credit, expanding commercial courts, and strengthening dispute resolution systems.
Other recommendations include improving logistics infrastructure, enhancing digital connectivity, removing interstate trade barriers, and establishing one-stop investment centres.
Outlook
The findings underscore the growing importance of subnational reforms in shaping Nigeria’s business environment.
Analysts say sustained improvements at the state level will be critical to unlocking economic growth, attracting investment, and supporting millions of businesses across the country.
