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How To Invest In Nigeria In 2021

Nigeria is one country in Africa with huge investment potentials that’s still heavily untapped. It has multiple options to consider if you want to invest in Nigeria and create employments. Although, the current investment climate in Nigeria shows signs of a challenging future for investors, and there’s this perplexity among entrepreneurs on what business to move their funds into.

Since most entrepreneurs are traders, there are limited trades to invest in, considering the lowest demand for most luxury goods in the market. To invest in Nigeria now, one has to do some study on the market realities. You can’t just put your funds into anything, unless you want to lose it so fast.

Trade is tying down most funds. Importers and manufacturers are looking for daily income businesses to move their funds into. The idea is that if it’s what people can use on a daily basis then it would sell regardless of how slow the demand curve is currently looking.

The Fall Of Consumer Spending

According to Brooking, it listed some reasons for the fall in consumer spending as a result of the partial or full lockdowns from the pandemic. Below is the full list that should influence how to invest in Nigeria now.

Understanding the impact of the COVID-19 outbreak on the Nigerian economy

  • Consumer spending primarily on essential goods and services.
  • Future income and expectation is low. Salaries are unpaid, most workers are being disengaged. Family income is dwindling, while small businesses are declining fast.
  • Finally, wealth erosion is the biggest of them all. There’s decline in assets such as stocks and property equity.

How Investment In Nigeria Works

Most Nigerian investors are turnover investors. They merely put their funds in mostly trades that guarantees short term returns. They overlook long term investment propositions. That’s also why most investors shy away from building private refineries, causing the high cost of petrol; but would rather import fuels from other countries, transferring the much needed employment to oversea companies.

To import fuel, you just borrow money from the bank, make order for the fuel, and when it arrives the shores of Nigeria, you load them into a tank farm, and start dispensing to trucks. In 90 days or more depending on the volume of import, your money is right back into your bank account. You pay off the bank loan and start enjoying your huge profits.

But with the pandemic, import is slow, and most importantly, demand is not so good. To invest in Nigeria, investors are thinking of what’s best to move their funds into, with a high propensity for turnover.

That’s also the drive for manufacturing that’s beginning to drive investment into the country. Investors are looking for opportunities that can guarantee daily returns, no matter how small it is, to keep their funds afloat. Idle funds doesn’t guarantee good income. So, the idea now to invest in Nigeria is to diversify into small manufacturing outfits that produces daily needs that are currently driving the market.

Tips To Invest In Nigeria

As this decline in trade continues, demand for micro industries will be boasted. Investors would learn to invest in Nigeria’s most demand goods. Typically, what drives consumers are daily needs. It takes 70 to 80 percent of their spending.

Let’s categorize the areas to invest in Nigeria now.

  1. Food
  2. Shelter
  3. Manufacturing

Food is daily needs. Anything that Nigerians can eat is where they are spending more of their funds. That means food commodities is a major investment area. That brings agriculture to the front burner. Also, food processing will drive investment. Another area would be food services. Restaurants, cooking gas refill plants, and convenient stores are major service areas to invest in Nigeria now.

Shelter is another area to invest in Nigeria. Now, I’m encouraging Nigerians in Diaspora who have disposable funds to help in this aspect of development. The population is growing daily, it’s not shrinking at all.

In 2020 Nigeria had over 7.4 million births, according to Knoema data projection of 37 births per 1,000; given a population estimate of 200 million. It’s the same way that over 500,000 of young people graduate from the universities according to yearly projection, while millions others from informal sectors, looking for shelter to start their own families.

And the third in what to invest in Nigeria, we take a slim look at the manufacturing sector of the country. There’s huge potential if you explore this area wisely. Nigeria has vast number of unprocessed food items that could be processed to help in proper storage and food security.

Nigerian manufacturing sector has always been on the decline over the years, due to huge imports from China and from other parts of the world. But recent statistics is driving new manufacturing businesses. And a lot of interest is in agro products. Nigerian investors are discovering food processing as new investors haven.

Conclusion

The Nigerian economy in the pandemic has its cure from within. Just as the infection rate and death rate has been low, the economic challenges can be reversed if investors focus on areas that meets the daily needs of the consumers.

Now that many are afraid and not optimistic about the economy, it’s time to take calculated risks to invest in Nigeria. There’s a future beyond the pandemic. As you invest in Nigeria now, solving the immediate needs of the consumers, you are also taking position in the future economy.

Take for instance the gas economy. 2020 was declared as the year of gas in Nigeria, and it has been a tremendous year for cooking gas and auto gas. Although, certain factors are required to keep the gas prices lower, it still didn’t discourage investors from building more gas plants and increasing the number of refill stations across the country.

Chinedu David
Chinedu David is a business consultant with experience in oil & gas, hospitality, IT & telecom, consumer products, business strategy, marketing and distribution. He was the telecom editor for SuccessDigest for over a decade. And founded Mystore, one of the indigenous online marketplace in 2013. Drop a comment below and he will respond to your query. He can also be reached via email: nedu@myblog.com.ng or Call/Text/WhatsApp: 07087770518
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