When structured properly, competition among sub-nationals can be one of the most powerful drivers of development. The recent move by the Presidential Enabling Business Environment Council (PEBEC) to spotlight Nigeria’s most reform-driven states and connect them to global capital is, therefore, a step in the right direction. But its success will depend on one critical factor, transparency.
At the heart of this initiative is a simple idea – reward states that make it easier to do business. By ranking performance across key indicators such as infrastructure, electricity, land administration, and regulatory efficiency, PEBEC is effectively creating a league table of governance. Predictably, Lagos State tops the list, followed by Kaduna State and Oyo State, with others like the Federal Capital Territory and Ogun State also making strong showings.
This model, if sustained, could reshape Nigeria’s development trajectory. Rather than waiting for federal direction, states are incentivised to compete on policy clarity, infrastructure delivery, and investor friendliness. In a nation with over 39 million micro, small, and medium enterprises, most of which operate at the state level, this decentralised approach is not just desirable but essential.
However, competition without transparency can be dangerous. Rankings must be credible, data-driven, and free from political manipulation. Investors are not swayed by glossy reports; they respond to consistency, predictability, and verifiable outcomes. If states are to truly compete for capital, the rules of engagement must be clear and fair.
Global experience reinforces this point. In India, the ease of doing business rankings among states has spurred remarkable reforms. States like Gujarat and Maharashtra improved land registration systems, digitised services, and streamlined approvals, not because they were compelled by the federal government, but because they wanted to attract investment ahead of their peers. The transparency of the ranking system ensured credibility and sustained investor interest.
Similarly, in Brazil, competition among states for industrial investment has driven improvements in infrastructure and regulatory efficiency. States that created clear, investor-friendly policies saw manufacturing hubs emerge, while those that lagged behind struggled to attract capital.
Even within Africa, Rwanda provides a compelling example. Though smaller in size, its commitment to transparent, data-driven reforms has made it one of the easiest places to do business on the continent. The lesson is clear – transparency builds trust, and trust attracts capital.
Nigeria stands to gain enormously from this approach if done right. The benefits of healthy competition among states are far-reaching. It drives policy innovation. States begin to experiment with reforms (digital land registries, one-stop investment centres, commercial courts) that reduce bureaucratic friction. Successful models are then replicated across the federation.
Also, it improves accountability. When performance is measured and published, citizens can hold their governments responsible. A state that consistently ranks poorly cannot hide behind talk; the data will speak for itself.
Likewise, it enhances investor confidence. For both domestic and foreign investors, the ability to compare states using standardised metrics reduces uncertainty. Investment decisions become less about guesswork and more about evidence.
Yet, the risks must not be ignored. If rankings are perceived as biased or politically influenced, the entire system collapses. States may focus on ‘gaming’ the indicators rather than implementing genuine reforms. Worse still, it could deepen regional inequalities if only a few states consistently attract investment while others fall further behind.
To avoid this, several safeguards are necessary. Independent verification of data must be strengthened. The methodology for rankings should be publicly available and subject to periodic review. Stakeholders, including the private sector and civil society, should be involved in the assessment process to ensure credibility.
Furthermore, reform must go beyond measurement to actual outcomes. Faster business registration, improved electricity access, and efficient dispute resolution must translate into real economic activity – factories built, jobs created, and incomes improved.
There is also a need for collaboration alongside competition. States should not operate in isolation. Regional partnerships, particularly in areas like trade logistics, power generation, and transportation, can amplify the benefits of individual reforms. Healthy competition should not preclude strategic cooperation.
The broader implication is clear – Nigeria’s economic future will be shaped less by federal pronouncements and more by state-level execution. As the Minister of Budget and Economic Planning has rightly noted, capital flows where certainty grows. That certainty is built not just on policy announcements but on consistent, transparent, and measurable performance.
PEBEC’s initiative, therefore, represents more than a ranking exercise; it is a governance framework. It challenges states to rise above complacency, to compete not in talks but in results. For a nation seeking to build a trillion-dollar economy, this shift is both timely and necessary.
If Nigeria can institutionalise transparent, data-driven competition among its states, the outcome will be transformative. Investment will follow performance. Innovation will follow competition. And development will no longer be an aspiration but become a measurable reality.