Why investors shun Nigeria, by World Bank

Unstable power supply, lack of access to finance, 

high cost of financing businesses, high taxation, 

poor infrastructure, corruption and macroeconomic 

environment have been identified as some of the 

reasons for poor investment in 

Nigeria.The Country Director, World Bank in Nigeria, 

Onno Ruhl said the above reasons were largely 

responsible for the poor performances of 

Nigerian firms compare to their counterparts 

in Kenya, Russia and South Africa.
Ruhl spoke at the presentation of Nigeria 2011 

Investment Climate Assessment Key Findings in 

26 states of the federation, held in Benin City, 

Edo State capital on Thursday.

             

World Bank President, Robert Zoellick

The World Bank representative explained 

that the assessment was a diagnostic instrument 

to assess the policy infrastructure at the federal 

and states level, adding that the survey was 

carried out in over 3,157 businesses in 26 states 

including Edo State.
According to him, electricity remains a major 

constraint to businesses in Nigeria, affecting all 

categories of firms.
He said about 83 percent of the firms identified 

electricity as a serious obstacle to their growth.
“Corruption and transportation were also serious 

concerns for many firms in Nigeria. Over 1/3rd of the 

managers said that these were serious problems. 

Bribes and product lost while in transit are also 

high in Nigeria. Manufacturing firms reportedly 

paid an average of 3.2 percent of sales in bribes 

and losses during transit are equal to 2.4 percent of sales.
“Inefficiencies in the business environment impose a 

huge indirect cost on manufacturing in Nigeria.

The cost of doing business is twice as high for firms in 

Nigeria as they are for firms in South Africa, Brazil, 

Russia and Indonesia”, he said