The Most Commercially Aware States in Nigeria

It is often been said that people from the eastern part of the Nigeria are best known for having a head for business. However we decided to challenge that belief by looking at how commercially aware the residents of each of the state in Nigeria were. Commercial awareness is the ability to view situations from a commercial or business perspective. It is an understanding of how and what makes any business successful.

Commercial awareness demonstrates that one can:

· Recognise, utilise and create business opportunities.

· Demonstrate an understanding of what is happening in the private sector.

· Understand how businesses are structured.

· Display an appropriate level of financial awareness.

· Identify, implement/monitor business idea development.

To help us capture all these aspects, we looked at the following:

A. Entrepreneurial Spirit

We took the data from Nigeria Bureau of Statistics’ Micro, Small and Medium Enterprise National Survey conducted in 2013 to compare how the projected population in 2013 for each of the states were involved in creating micro, small and medium enterprises (MSMEs) to seize whatever opportunities abound in their locality.

We did this by comparing the number of each category of MSMEs as shown in the table below.

Table 1. Entrepreneurial Spirit of each state determined by comparing the ratio of the projected 2013 population to the number of businesses established in each category of MSMEs

Adamawa, Borno and Yobe were excluded from the survey as a result of the Boko Haram insurgency at that time.

B. Highly Skilled Workforce

Research ash shown that having access to a highly skilled workforce play a significant role in fostering the growth of businesses as well as ensures economic prosperity. A productive and flexible workforce enables businesses to compete in more sophisticated market segments and to maintain competitive positions. An unproductive and inflexible workforce keeps businesses in unattractive market segments, curtails innovation and retards growth.

A poor skill base also makes it difficult for businesses to move up the value chain from competing with low-cost producers of goods and services to competing with the producers of high valued-added goods and services for sophisticated markets.

We measured the proportion of the workforce that were highly skilled in each state by using the proportion of respondents who listed their occupation as either professional, technical or managerial in the Demographic and Health Surveys for Nigeria done in 2003, 2008 and 2013, and used the figures to project what proportion of the workforce could be considered highly skill in 2015. The results are shown in the table below.

Table 2. The States Ranked by the Proportion of Highly Skilled Workers in the Labour Force

C. Ease of Doing Business

The data used in this category is from the World Bank’s The Doing Business project which provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level.

The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle.

By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy.

For the states in Nigeria, 4 areas of business regulation were looked at and include the following;

· Starting A Business

· Dealing With Construction Permits

· Registering Property

· Enforcing Contracts

The overall results are shown below:

Table 3: States Rankings from the World Bank’s 2014 Report — Doing Business in Nigeria 2014: Understanding Regulations for Small and Medium-Size Enterprise

Borno was not included the Doing Business report due to the Boko Haram insurgency.

D. GDP Per Employed Person

The GDP (Gross Domestic Product) per employed person gives an indication how efficient organisations in generating tangible value that contributes towards the overall economy. We calculated the total labour using data from the National Bureau of Statistics (NBS) and the Nigerian Population Commission (NPC), while the employment rate was from the Demographic and Health Surveys for Nigeria. This gave us the total number of people that were actively in each state. The GDP was acquired from our State of States report, which can viewed here.

Table 4: States Rankings for GDP Per Employed Person

Final Results

Each of the categories listed above were equally weighted and the average score for each of the state was calculated and state ranked as shown in the table below.

Table 5: States Rankings for the Most Commercially Aware States in Nigeria

Figure 1. Map Showing Nigerian States Ranked by Commercial Awareness

From the map it can be seen that the geopolitical zones for residents who are most commercially aware will be from the South West of the country.