Harsh business environment in Nigeria forced about 322 organised private companies to close shop between 2009 and 2014, a report by the World Bank Enterprise Survey has shown.
The report also said out of 5,833 firms sampled in the country within the period, at least1,136 were reported to be at the risk of closing down.
A firm is considered to have closed down or exited if it is confirmed as ceasing operation.
The World Bank Enterprise Survey, which focused on emerging markets and developing economies, covered small, medium and large-scale enterprises in the non-agricultural formal private sector.
The study looked at the effects of factors such as trade, finance, labour, infrastructure, innovation, regulations, taxes and business licensing, crime, informality and corruption on business growth.
Results of the survey, which was published in a report by the African Development Bank, entitled ‘Creating Decent Jobs: Strategies, Policies and Instruments’, identified political environment and corruption as major obstacles to the survival of businesses in Nigeria and other African countries.
Stifling business regulations were also identified as a major constraint to doing business, according to the study.
Issues relating to tax rates, access to land, trade registration, tax administration, business licencing and permits are among the constraints relating to business regulations.
Inadequacy of infrastructure, particularly transportation, electricity and telecommunication facilities affected the survival of the businesses as well as access to finance.
The study also found that competition from operators in the informal sector was another factor that undermined the survival of businesses in the review period.
In the same vein, the AfDB report noted that conflict along ethnic and regional lines had stalled economic growth in Nigeria.