BACKGROUND

Since 2003, the African Institute for Applied Economics has been leading research and advocacy on the business environment in Nigeria with the aim of promoting the growth and competitiveness of the private sector. In the course of such research and advocacy, it has been observed that there is an acute shortage of disaggregated analysis of business environment and investment climate in line with federal structure of the country. Rather, most existing assessments (for example, Global Competitiveness Reports, Doing Business Indicators, Business Environment Surveys, Investment Climate Surveys) World Economic Forum (WEF), World Bank (WB), Commonwealth Business Council (CBC), United Nations Industrial Development Organisation (UNIDO) are cross-country comparisons, which treat Nigeria as a homogenous entity. In effect, the business environment and competitiveness (BEC) reports on Nigeria simply depict national aggregates and ignores differentiation across the states.

The few existing state-level assessments have been disparate, discontinuous and not sufficiently coherent to support state-level evidence-based advocacy by private sector and civil society organisations. Nigeria is a federal state and national and sub-national governments share concurrent jurisdictions in many policy and institutional spheres that impinge on the business environment and private sector. Hence, analysis that does not reflect variations across states is too general and has little utility for state-level business environment appraisals, monitoring and feedback. The current shortage of authoritative and comprehensive assessments of state-level business environment and competitiveness (BEC) across Nigeria underscores the need for disaggregated analysis based on comparable indicators.

It is against this background that the African Institute for Applied Economics (AIAE), Enugu is now leading a consortium of research organisations, private sector and civil society organisations, which include the Department of Economics, Federal University of Technology (FUT), Yola, Manufacturers Association of Nigeria (MAN), Nigerian Association of Small and Medium Enterprises (NASME), Human Rights and Law Services (HURILAWS) in a flagship Nigerian sub-national business environment and competitiveness project. The project, christened Business Environment and Competitiveness across Nigerian States (BECANS), seeks to systematically assess, update and report the business environment and level of competitiveness among Nigerian states. Unlike previous and ongoing assessments, this project explicitly integrates BEC survey with state-level advocacy in order to foster critical constituencies for BEC reforms in the states. Such constituencies are the principal stakeholders in this project and will, based on the survey results, engage respective State Governments to optimize their policy domains and constitutional responsibilities for improving the business environment.

The project will:

• Develop a domesticated framework of benchmarks and indicators for monitoring and assessing the business environment and competitiveness across states.
• Collect and analyze data to empirically evaluate the benchmarks and indicators.
• Update in a cumulative and continual manner the business environment and competitiveness indicators to provide an ongoing annual monitoring and reporting mechanism.
• Prepare flagship business environment profiles and competitiveness reports across the states.
• Disseminate the states’ business environment profiles and competitiveness reports and promote their utilisation as bases of advocacy by private sector organizations and civil society organizations. State governments would also find the reports as useful guide in designing institutional and regulatory reforms. 
• Provide regular private sector feedback on reforms under the State Economic Empowerment and Development Strategy (SEEDS) throughout the country.

METHODOLOGY

The methodology combines qualitative and quantitative methods including fact-finding missions, executive opinion surveys and enterprise level surveys. Data will come from both surveys and documentary reviews. The survey will cover the spectrum of economic sectors and enterprise sizes throughout the states.

Under BECANS, four categories of business environment conditions are delineated: infrastructure and utilities, legal and regulatory services, business support and investment promotion, security. These dimensions can be further decomposed as follows:

These issues and parameters are currently being developed into comparable state-level indicators by BECANS Technical Working Group (TWG).

The project has several interacting organs, namely a Project Advisory Committee (PAC), a Project Imple-menting Institution (PII), a Technical Working Group (TWG) and Stakeholder Contact Groups (SCGs). BECANS is being carried out in collaboration with key government partners - National Planning Commission (NPC) and Central Bank of Nigeria (CBN).