Assessment of the Determinants of Private Sector Investment in Kaduna State

Private sector investment is the engine of sustained economic growth, and identifying its determinants in Kaduna State provides evidence for investment climate reform in North West Nigeria. This study assessed the determinants of private sector investment among manufacturing and service sector firms in Kaduna North, Kaduna South, and Chikun Local Government Areas, Kaduna State. A survey of 180 registered private sector firms was conducted. Data collected covered annual investment levels, capacity utilisation, access to credit, infrastructure availability, regulatory burden, security environment, and labour costs. Stepwise multiple regression was applied. Results showed that infrastructure availability (particularly electricity supply reliability), credit accessibility, and security environment were the three strongest positive determinants of private investment. A one-unit improvement in electricity supply reliability was associated with a 1.4 percent increase in annual investment. Insecurity in some Kaduna LGAs reduced private investment probability by 34 percent among surveyed firms. Corporate tax rates were cited by 42 percent of firms as a disincentive. Bureaucratic delays in business registration and permit issuance discouraged investment in 56 percent of cases. The study concludes that infrastructure deficiency and insecurity are the most critical deterrents to private investment in Kaduna State. Recommendations include investment in power supply reliability, security sector reform, business regulation simplification, and targeted investment promotion through the Kaduna Investment Promotion Agency.

Keywords: private investment, determinants, Kaduna State, business climate, infrastructure