7 cheapest states in Nigeria to live and run a small business

Entrepreneurs recognise that every naira saved on rent, utilities or licensing fees can be reinvested into growing their ventures. We’ve identified seven Nigerian states where essential costs, including food, housing and power, remain below the national average. These locations also offer business-friendly policies, such as streamlined registration processes, low-cost market stalls and ready access to local customers. Whether you operate a retail outlet, an agricultural start-up or a digital service, these regions provide ideal blend of low expenses and sustainable growth potential. ALSO READ: 10 smallest states in Nigeria by land area 1. Ondo State Ondo posts the lowest headline inflation in Nigeria at 13.4 percent. Residential rents and food prices rise more slowly here than anywhere else, keeping monthly living costs modest. The state government has simplified business registration through its online portal and offers subsidized market stalls and workspace in Akure and Okiti-pupa, allowing entrepreneurs to start with minimal upfront capital. 2. Cross River State With 17.1 percent headline inflation, Cross River maintains stable prices for staples like plantains, yams and palm oil. Calabar’s emerging creative and tourism sectors provide niche markets for small retailers and service providers. Business permits in Cross River are among the cheapest in the south, and the state’s agro-processing hubs offer affordable equipment leasing for farmers and food manufacturers. 3. Kwara State Kwara’s inflation rate of 17.3 percent ensures that living and operating costs remain below the national average. In Ilorin, you can lease a small shop or workshop for nearly 30 percent less than in comparable cities. The state’s SME Development Agency waives initial licensing fees for micro-enterprises and provides access to no-interest loans, making Kwara an ideal location for tailors, cobblers and light manufacturers. RECOMMENDED: Top 10 richest states in Nigeria (2025) 4. Osun State Osun records inflation of approximately 17.8 percent and combines low food and transport costs with targeted grants for small businesses. In Osogbo and Ile-Ife, modest apartments and retail spaces rent for about 20 percent less than the national urban average. The Osun Youth Empowerment Scheme provides matching grants and training for entrepreneurs in agriculture, fashion and digital services. 5. Ekiti State At around 18.2 percent inflation, Ekiti keeps staple food prices in check while nurturing an agribusiness ecosystem. Small-scale farmers and processors benefit from duty-free importation of milling and packaging equipment. Land leases in Ado-Ekiti’s industrial areas are subsidized, and the state’s Agro-Business Development Agency offers mentoring and co-working spaces to startups in food production and value-addition. 6. Delta State Delta State outside its oil hubs averages 18.3 percent inflation but offers lower rents and utilities in towns such as Ughelli and Asaba. The “Made in Delta” programme markets local crafts, processed foods and light manufactured goods nationally, while the state’s SME centre provides low-cost co-working spaces and group purchasing agreements for raw materials. 7. Oyo State Oyo closes the list with 18.7 percent inflation. Ibadan remains one of the country’s most affordable major cities for housing and commuting. Retail units on key corridors rent for significantly less than in Lagos or Abuja. The Oyo Investment Programme delivers matching grants and low-interest microloans to SMEs in retail, hospitality and creative industries, reducing the financial burden on startups and small enterprises. By choosing any of these seven states, Nigerians can capitalize on lower living expenses and reduced business overhead, freeing up capital for inventory, marketing or staff development and turning tight budgets into sustainable growth. EXPLORE: Top 10 poorest states in Nigeria