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.

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The Nigeria Customs Service (NCS) has strengthened collaboration with the African Continental Free Trade Area Secretariat to advance the implementation of the Simplified Trade Regime (STR) aimed at supporting small-scale cross-border traders.

This followed a high-level engagement held at the Customs Headquarters in Abuja on March 23, 2026, focused on improving trade facilitation and inclusion for Micro, Small and Medium Enterprises (MSMEs).

Push for inclusive trade

The Comptroller-General of Customs, Adewale Adeniyi, represented by Deputy Comptroller-General Caroline Niagwan, reaffirmed the Service’s commitment to simplifying trade processes.

She said the initiative is designed to make cross-border trade more transparent, efficient and inclusive, particularly for small-scale traders.

“Our goal is to make trade easier, more transparent, and inclusive for small-scale traders, while ensuring compliance with regulations,” she stated.

Nigeria named pilot country

Leading the AfCFTA delegation, Pedro Estevao highlighted Nigeria’s selection as the pilot country for the STR in West Africa.

He noted that Nigeria’s large market size positions it strategically to drive regional trade integration and economic growth under the AfCFTA framework.

Digital systems and simplified procedures

During the meeting, the NCS presented its draft Standard Operating Procedure (SOP) for implementing the STR.

The proposal includes simplified customs processes for informal cross-border trade, passenger baggage handling, and low-value e-commerce transactions.

It also features digital declaration platforms and risk-based control systems to improve efficiency and compliance.

AfCFTA framework alignment

AfCFTA consultant Nabil Zibani outlined the continental framework, stressing the importance of accessible and transparent systems that enable MSMEs to participate effectively in regional trade.

Discussions identified key areas of alignment between Nigeria’s draft SOP and the AfCFTA model, including simplified documentation, digital clearance systems, and the introduction of de minimis thresholds for low-value goods.

The framework also prioritises inclusive trade, with a focus on empowering women and small business operators.

Next steps for implementation

Both parties agreed on the need for continued technical engagement to address operational challenges and ensure alignment between national and continental strategies.

The initiative is expected to enhance Nigeria’s role in regional trade, strengthen economic integration, and create new opportunities for MSMEs.

Analysts say successful implementation of the STR could significantly reduce trade barriers, formalise informal trade, and boost economic participation across West Africa.

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