States must compete for private investment – NESG

The Nigerian Economic Summit Group has urged state governments to compete more aggressively for private investment by improving governance, strengthening institutions and creating business-friendly environments rather than relying on fiscal incentives.

The private sector-led policy group said stronger competition among states for capital could help spread economic opportunities beyond a handful of major cities and unlock the productive potential of different regions.

The NESG stated this in a statement on Monday on the Scale Nigeria sub-theme of the 32nd Nigerian Economic Summit, scheduled for October 26 and 27, 2026, at the Transcorp Hilton Hotel, Abuja.

It said states seeking to attract investors must improve land administration, provide predictable regulations, strengthen dispute-resolution systems and adopt development policies that support businesses.

“State governments will be challenged to compete for investment not through unsustainable fiscal concessions but through the quality of their governance, the competence of their institutions, and the strategic intelligence of their development planning,” the group said.

According to the NESG, Nigeria’s economic activity remains heavily concentrated in a small number of states and cities, particularly Lagos, Abuja, Kano and Port Harcourt, while large parts of the country remain economically marginalised despite possessing agricultural, mineral and cultural resources.

It warned that the concentration of investment and formal economic activity in a few locations was creating significant disparities among states and limiting Nigeria’s overall economic potential.

The group said, “Nigeria’s economic geography tells a story of striking inequality. A handful of states and cities such as Lagos, Abuja, Kano, and Port Harcourt concentrate the bulk of formal economic activity, financial flows, and investment.

“Meanwhile, vast swathes of Nigeria’s territory, home to tens of millions of people and endowed with agricultural land, mineral resources, and cultural wealth, remain economically marginalised.”

The NESG argued that spreading productive economic activity across the federation should not be treated merely as a political objective, saying it could expand Nigeria’s productive capacity, markets and investment opportunities.

According to the group, concentrated economic activity also places excessive pressure on infrastructure in leading commercial centres, while infrastructure in less economically active areas suffers from underinvestment and limited utilisation.

It cited Lagos traffic congestion as an example of the economic cost associated with excessive concentration of businesses and population in a single commercial centre, noting that gridlock costs the economy hundreds of billions of naira annually in lost productive time.

The group also warned that migration from less-developed areas to established economic centres could weaken the human capital available to states seeking to develop competitive industries.

It said, “Scaling Nigeria’s growth is therefore not simply a redistribution exercise, it is a strategy for increasing the total productive capacity of the nation.

“Every state that develops a functional economy is a market, a production zone, and a talent pool that adds to rather than drains from Nigeria’s national potential.”

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The NESG said states should build their investment strategies around their comparative advantages rather than adopting similar development models irrespective of their resources and economic structures.

It identified rice production in Kebbi and Niger, horticulture and cold-chain development in Plateau, tourism and cocoa in Cross River, and commercial and manufacturing opportunities in Kano as areas capable of supporting regional economic growth.

It also identified solid minerals and timber as potential economic strengths for Ondo and Delta states. “These are not conjectures; they are latent economic realities waiting for the enabling conditions: infrastructure, investment, policy, and market linkages,” the statement said.

The group added that Nigeria’s 36 states and the Federal Capital Territory differed substantially in their climate, agricultural potential, mineral deposits, human capital and access to domestic and international markets.

Consequently, it argued that development strategies should recognise these differences and enable states to specialise in areas where they possess competitive advantages.

Beyond individual state strategies, the NESG advocated stronger regional value chains linking production, processing, logistics and markets across state boundaries.

It explained that agricultural value chains could, for instance, connect farmers in one state with processing facilities in neighbouring states, while transport networks link the products to major consumption centres and export terminals.

The summit is expected to examine how governments, private investors and development finance institutions can jointly develop infrastructure required for such value chains, including roads, railways, warehouses, logistics systems, electricity, water and market-information platforms.

The NESG said infrastructure remained fundamental to efforts to spread investment and productive activity across Nigeria.

It noted that roads and bridges were required to connect markets, while railways could lower logistics costs and electricity could support manufacturing and other productive activities.

Digital infrastructure, it added, could enable communities outside the major commercial centres to participate more effectively in the domestic and global economy.

The organisation said the summit would bring together the Federal Government, state governments, development finance institutions and private infrastructure investors to consider how the required physical and digital infrastructure could be financed and maintained sustainably.

The Scale Nigeria discussions form part of the 32nd Nigerian Economic Summit, themed, “Growth that Works: Delivering Jobs, Productivity and Shared Prosperity.”

According to the NESG, the discussions will seek to develop a policy framework capable of shifting Nigeria away from an economic structure in which investment and opportunities are concentrated in a limited number of locations.

“The Scale Nigeria dialogue will build the consensus and the policy agenda for an economy that grows not just at its core, but in every corner of the federation,” the group said.