Investment Opportunities In Nigeria; Nigeria is considered the most populous black country in the world and is also referred to as the “giant of Africa.” It is highly wealthy in natural resources and people resources, but many of its potentials are yet unrealised or are being underutilised.
There are investment options available for any budget. You can invest in Nigeria with as little as NGN 10,000 or as much as several billion naira and anticipate a decent return. Opportunities for both high- and low-income investors in Nigeria are discussed in this article. Also, for investors from abroad.
Why Should You Invest In Nigeria?
There are numerous justifications for thinking about investing in Nigeria. Before South Africa, Egypt, and the rest of the continent, Nigeria has the largest economy in Africa. Nigeria is expected to rank among the top world economies in 2050, ahead of countries like Italy, Canada, South Korea, Spain, the Netherlands, Australia, and others, because of its abundance of growth prospects.
Nigeria has a workforce, workforce and population of over 200 million that will enable any firm to prosper. Nigeria has a low minimum salary when compared to other countries. As a result, you may accomplish more with less money spent.
Tax holidays, tariff drawbacks, investment allowances, tax exemptions, export development grants, relief from double taxation, and many more government benefits are available. Also, Nigeria is experiencing an increase in investment from South Africa, the West, and China. Nigerians are awakening to the need to invest in their nation.
Best Investment Opportunities In Nigeria
1. Mutual Funds
Investing in mutual funds may already be pretty known to you. As people buy in groupings of equities, this is more of an assisted investment. To create the ideal combination of companies, these groups of companies are selectively catered to by the company experts.
According to data, Nigerian mutual fund investments increased by 3.4% to N1.407 trillion in April 2022 from N1.361 trillion in April 2021. Money market funds, bond funds, equities funds, dollar funds, and balanced funds are a few of the best mutual funds available for investment in Nigeria.
2. Agriculture
Nigeria’s total area of arable land is roughly 70.8 million hectares. The National Bureau of Statistics indicates that the agricultural sector contributed over NGN 41 trillion in 2021. However, agriculture accounts for about 24% of the nation’s GDP. As a result, one of the best investment prospects in Nigeria is thought to be agriculture.
If you have more money to invest and want to explore agricultural investments, you can. This is because to engage in this sector, one must own large quantities of raw materials and meet all legal requirements.
Numerous financial institutions, including the Nigerian ministry of Finance, provide particular financial help to companies with an agricultural focus. Undoubtedly, one of the most significant areas for investment in Nigeria is agriculture.
If properly planned and carried out, investing in the agriculture sector will be very profitable. Crops, cattle, transportation, farm equipment, and many other topics are exciting.
3. Cryptocurrency
Based on the profits they can produce compared to other financial assets, investors with a higher risk tolerance level should investigate cryptocurrencies. Consequently, based on market valuation, it offers the highest ROI.
Nigerian cryptocurrency investors have recently become very popular in Bitcoin. According to Twitter CEO Jack Dorsey, 32% of the population of Nigeria are bitcoin investors, making Nigeria the country with the most significant percentage.
In addition, 10.34% of Nigerians currently possess cryptocurrency. Nigeria is predicted to have the fastest-growing cryptocurrency sector among emerging markets by Q3 2022.
You can diversify your portfolio by investing in various digital assets using multiple platforms. With as little as 3,000 Naira, you can begin investing in the USDT or USDC.
4. Real Estate
In every country, real estate is a consistent commodities provider. The Nigerian market has not yet been wholly utilised for construction and business. These are the existing and expanding investment opportunities in Nigeria. Therefore, investors should consider getting their hands dirty in the sector.
For Nigerians and foreign investors, real estate is one of the hottest investments. One can invest in this industry by purchasing properties for resale, purchasing rental homes, or purchasing other financial or commercial properties.
Opportunities can be found in low-cost housing, building materials, motels, shopping centres, and many other places. You can invest in real estate and earn in a variety of ways. Meanwhile, one of the main issues is housing, as both the population and the economy continue to expand.
5. Investment In Stocks
Stocks are well-known for being among the best investing choices. Rising consumer demand and the growing role of manufacturing in the economy have brought the African stock market back to life.
Data from contracts for difference (CFD) indicates that since the start of 2022, the Nigerian Stock Exchange has increased by 2.63% or 1123 points. According to this information, the Nigerian stock market has a lot of promise.
Additionally, market diversification outside the oil and gas industry drives investors outside Africa to concentrate on the continent.
6. Investment In Bonds
Bond investments are an option for those who are interested. These are recognised as debt instruments because the investor owns the bond, and the bond secures the debt.
The general population in Nigeria has access to various corporate bonds as high RoI investments. Among them are FGN Bonds (Promissory, Eurobonds, Diaspora, and Savings). In addition, there are asset-backed securities, municipal bonds, and Treasury bonds.
7. Oil And Gas
The most lucrative and significant investment prospects in Nigeria are in the oil and gas sector. It generates revenue worth 1.2 trillion Nigerian Naira.
More natural resources, including petroleum and other energy, are stored in the nation. Investors have two options: buy stock in oil exploration and production businesses or invest in mutual funds.
Some significant investment outlooks in oil and gas include exploration and exploitation, product marketing, pipeline, refining, construction and installation, transportation, etc.
8. Mining
Nigeria has a vast array of natural resources, many of which have not received much attention. For a committed investor, investing in these underutilised locations can be pretty profitable. Nigeria’s mining industry is incredibly underdeveloped. Little has been accomplished. This creates numerous opportunities for would-be investors to take a look.
Nigeria has a lot of undeveloped resources, and the government has repeatedly demonstrated its willingness to work with potential investors. Some of the natural resources that you can invest in mining in Nigeria are coal, bitumen, gold, tin, limestone, marble, columbite, etc.
9. Manufacturing
Nigeria relies on importation for even the most insignificant items you would not consider. The biggest economy in Africa will not accept this. There is a need to make many goods at home as the economy expands. The workforce is available.
Nigeria’s manufacturing industry will benefit from investments in it. It will expand the economy and provide jobs. Governments in the past have often urged investment in the manufacturing industry.
Most commodities imported into Nigeria are small domestic goods like toothpicks. There are numerous essential items to produce, including Food products, water (table and sachet), fibre optic cables, telecom equipment, tyres, clothing, and on and on the list goes.
10. Transportation And Logistics Services
Nigeria is a densely populated country; as such, there is overpopulation in some of its urban centres, with Lagos being a typical example. These locations have such a high concentration of people that transportation becomes very difficult. It’s not unusual to see a sizable group of people in Lagos huddled around at various bus stops, impatiently awaiting buses.
Investments in the transportation industry are wise decisions. There is a need for alternative modes of transportation, such as railroads and water transportation, given the volume of traffic in Nigeria. It might be an excellent investment in locations where motorcycles and tricycles are permitted.
Transport services can be quite profitable. Transporting different goods, such as textiles, culinary interests, and petroleum products, is always necessary.
Factors To Consider Before Making Investment In Nigeria
1. Time Of The Investment
One of the most crucial factors to think about before investing is this. You should think about if now is the best time for you to invest. There is no hard and fast rule for this; all that is required is that you be sufficiently perceptive to recognise when to make your investment. In choosing the best time to invest, you may also use a financial advisor’s services and your common sense.
2. Where To Make The Investment In Nigeria
Where you invest will frequently be determined by your investment goals. It makes more sense to invest in less risky securities like bonds if you want to keep your money reasonably safe because you will need it soon. On the other hand, you can invest in high-risk assets like stocks if your goal is to take aggressive risks to generate more significant gains.
However, if your goal is to take a moderate risk with your money to increase its value, you might want to think about investing in real estate or a combination of stocks from very reliable firms that pay dividends (income).
3. Risk Tolerance
This is yet another crucial issue you should consider before investing. As a general rule, the possibility for a better return increases with more investment risk. However, not everyone can accept or take financial risks above a certain threshold.
Before making any investment, you must know your comfort level with risk and the extent to which you can take financial hazards. This is done to prevent risk-negative taking’s impacts on your life and health. Therefore, it is preferable to invest within your risk tolerance.
Furthermore, there are financial institutions in Nigeria that provide an investment option for their customers. One of them is Mintyn Digital Bank which is reputed as the best digital bank in Nigeria. The bank, through its online banking app, offers an investment feature for its users such that Mintyn investors can get about 18% return on investment (ROI) per annum.
How To Invest On Mintyn Bank
1. Create a Mintyn account and log in.
2. Navigate to click on “Investment”.
3. Click on ” New Investment”.
4. Select your preferred investment product and proceed to initiate it.
5. Enter how much you want to invest.
6. Select your investment duration.
7. Mark the terms and conditions to confirm your investment.
8. Click on “Confirm Transfer” as it displays your profit returns and withholding tax after your selected duration of the investment.
What Are The Risks Of Investing In Nigeria?
Investors who want to renew their licenses may run into legal issues as the investing market expands. Additionally, when making investments, investors need to keep a careful eye on the nation’s political climate.
Conclusion
Investment is one of the lucrative ways of making money in Nigeria, as it provides an enabling environment for businesses to thrive. But, it is important to understand the fundamentals of an investment opportunity before putting your money into it to forestall scams or other financial woes.
