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Startup Nigerian Investment Guide 2020

Startup Nigerian Investment Guide 2020

If you are thinking of investing in Nigeria this year, you will need to know how the market works now and be guided on your investment. This year is gone, over half of the year and a lot has happened already, with the pandemic still ravaging the economy. There’s so much to understand about the state of the economy in the first ever startup Nigerian Investment guide.

Nigerian investment Guide for this half of 2020 is to look at what the CoronaVirus pandemic has reduced the economy to and how investors can maneuver themselves through this stormy waters.

There’s hopelessness in the country right now, coupled with government reckless display of inability to tackle the pandemic or pilot the country out of the economic woes that’s staring it in the face.

New startups may have serious challenges taking off this year, even into next year. And that’s not good for the economy. In a time more businesses closed up in history, startups should be a reviving steps, but that’s not even happening now.

However, the marketplace is not shut down. There’s still growth, even though small. Investors can look in the direction of this growth and still maintain cash flow.

How Startup Investment Guide Works

As a business review site, we are determined to guide both local and foreign investors who are interested in investing in Nigeria. The idea is to explore new growth areas and show investors where there maybe hope for their survival in the economy.

Nigerian Investment guide is no a political tool. Although we may look at what government is doing right or wrong, but that’s usually not mandatory in this report. We try as much as possible to stay clear of politics. And when we do, it’s not a smear campaign or to boost party affiliation.

The primary focus is always to protect the Nigeria investment environment, and to help startups and small businesses navigate the stormy waters of our economy. Everyone knows how bad the Nigeria economy was before this pandemic. So, not much is expected from this government, in terms of handling the situation.

If there’s any good development from the government, it would come as a surprise. However, much of what NCDC has been up to seems like a televised script. There’s little or no Nigerian content in it to help it overcome the pandemic. NCDC should be looking at our cultural, religious and tribal characteristics of an average Nigerian.

But what has happened is NCDC making decisions in the morning and changing it by noon. So, there’s no particular proven approach being implemented since this pandemic.

What Is Happening In Nigeria Now

The Nigerian economy is facing its worst challenge in history. That’s why investors should be careful. The stock market will keep crashing, because there’s no real market developments to sustain stock growth. Any investment in stocks now would be to amass share volume to be held till when the market would rebound.

Import business is also suffering under this pandemic, with dollar rates spiraling almost out of control, even now that consumer spending is waning. People will not be able to keep up with increase prices of imported goods. That would result to lower demand.

Generally, money will be in short supply, and government would attempt to horde cash flow by awarding fewer contracts and suspending salaries of workers. A dangerous twist, but due to lack of an economic policy, government will seek to horde more money than spend more.

Navigating the slum of the riverine community


If you look at what the United States government and other European governments like Germany had been doing, is to increase liquidity of the economy by pushing more money into circulation. But Nigerian government will do the opposite or push large monies into some private pockets instead.

Consumer Spending Power

If there’s anything that is grossly affected now, it’s consumer spending power. This power is important in any economy, and Nigeria shouldn’t be losing it now. The government should be focused on how to sustain this power from waning out.

It’s not only the people that would be affected, the government would become poorer, unproductivity would increase and people’s needs would outstrip supply. And that would lead to a higher negative GDP as well.

I once advised a state government on the need to pay salaries regularly and as at when due. They are killing their state economy when they don’t pay salaries. It’s even wiser to borrow to pay salaries. But not many people in government understands the economics of paying salaries.

They think it’s wisdom to hold onto workers salaries. It’s the worst policy of any government. That’s why the Nigerian economy or any state for that matter is not growing. There’s no mystery in economic growth than in consumer purchasing power. Every level of government in Nigeria should focus on that.

Sometimes it’s erroneous to think that creating new jobs is the only solution. But how would new jobs be created when consumer purchasing power is low or non existent? State governments in particular should stop making excuses for payment of salaries if they want their state economy to grow.

How Money Is Circulating Now

For any economy to be growing, money must be exchanging hands. Currently, there are just few means through which money is being exchanged in this country. And that’s a major problem. The economy won’t show signs of any improvement until these area is reversed.

Government needs to reopen the country fully. There’s so much ignorance on the virus. And until government stops playing politics and starts growing the economy back, it’s too risky to invest in Nigeria now.

If you take a look at some of the biggest drivers of cash flow in our economy, you will see that they are all dormant. Almost a quarter of the population is in the educational sector. The money that circulates in that sector is a big part of our cash flow economy.

The other sector is workers, both in private and public sectors. Government being the largest employer of labour in the country still has more than two-third of its workforce at home. And since no impactful palliatives was given to these workers, majority of them may never get salaries paid during these period.

You can see, and it’s not just these two sectors. There are many other sectors having the same issues. If money is not circulating from the consumer to businesses, how can the economy grow back?

Nigerian Employment Percentage

The number one investment in Nigerian is employment. I consider employment as an investment because it’s a major source of income for most families. The percentage of Nigerians in employment is over 76 percent of the 200 million population.

You can’t ignore that large percentage. It’s huge and it means that more Nigerians are in dire financial circumstances that could crash our economy. While the remaining unemployed 23 percentage plus depends on the employed ones for survival.

Imperatively, if these percentage are now under salary scare, what’s the hope of the economy? We are indeed in a middle of a pandemic that’s worst than CoronaVirus. The only thing defending our economy is our local market structure and small businesses.

The Diaspora Challenge

One major Nigerian Investment that’s suffering as well is our Diaspora imports. International flights are shut down and not more Nigerians could be sent abroad.

Nigerians living outside the country are a major revenue earner for the country. So much cash flow coming from Nigerians all over the world into the country has been a sustaining power for our economy.

Although, this time it was affected but we saw the power of Diaspora economy as many communities got palliatives from their people overseas. Billions of naira flowed into this country. But guess where most of it went, food.

However, there will be less inflow from Diaspora economy this year. Nigeria is not the only country facing this pandemic. Our diaspora economy is also facing CoronaVirus pandemic. There are job issues where they live too. And less income is expected to be generated as well by Nigerians in Diaspora.

Most families in Nigeria depends on this inflow from the Diaspora, especially in the rural areas, where our parents live. And since there’s a cut in Diaspora money, money is going to be in short supply in our rural areas.

Making Purchasing Decisions

As this trend continues, consumer wants would become regulated. Not by choice, because of their limited financial resources. Even for those whose income may not be affected would also regulate their purchases.

One thing that’s present in a situation like this, is the penchant for fear. There’s perplexity of nations, and so, many will lose hope in the present and even in the future expectation for market rebound.

Consumers are going to be making purchasing decisions that only addresses their most important and urgent needs. Things like food, health and shelter would remain paramount in the list of preference.

The scale of preference won’t favour luxury goods. There would be major reduction in tourism and entertainment. And consumers would resort to self help where necessary.

How Investors Should Be Thinking

In Nigerian investment guide, I try to look at investors both as individuals, corporate and government. In this special COVID-19 guide, my main focus will be on how government investors should be thinking.

Every state government should be looking at ways to grow its state economy. And the best way is to increase employment in the state. But there’s a way investors think, and government need to think like investors to attract growth.

For a big company like Nestle to invest in any location, it’s primary focus is the consumer spending power and not just population. Sometimes, smaller states think they don’t have anything to attract big investors. While investors don’t just look at one state, they also see the neighboring states markets.

If you grow your consumer spending power you will attract the big investors who would use your state as a launchpad to target neighboring states markets. The key is for a state government to ensure that a larger percentage of its employed workforce get paid regularly to increase is consumer spending power.

Who’s not thinking about Nigeria

Retail Industry Will Continue Booming

One good news in this whole pandemic is the retail industry. It has a sustained growth than any other sector. People will continue buying and selling. Although, the volume may not be higher compared to pre-COVID era, but the margin will be sustainable for businesses.

The visits to the markets would increase as well. More consumers would consider buying from the main markets as a means of saving cost of living, while the online market would suffer as a result.

Almost every product on the market has increased its retail price. While value may be affected, as companies struggle to compete over the available consumer expenditure. The kind of value that would be affected won’t be quality but quantity of what the old price offered.

Investors should focus on these markets to push their products into the hands of consumers. These markets still remains as Nigerians offline network for buyer’s and sellers. Take advantage of them to sell more products.

You can use the distribution network system of networking your goods across the country, using other people’s money and leverage on their existing retail network and customer base.

How And What To Be Advertising

I have read some experts asking businesses to increase their online advertising budget and not reduce it. That’s a big deception if I must say. If there’s any reason to increase your advertising budget it would be to build hope in the marketplace.

Advertising is majorly a tool to increase awareness and sales. The majority of the consumers are prioritizing their meager income now. Most online users now resort to using Facebook free mode. They won’t even see your product picture or video ads.

The only thing consumers wants to hear now is how to get out of this quagmire. Do you have any solution, now is when to try it. MTN did something interesting. They gave their subscribers 10 free sms daily to help them connect with love ones. That’s a noble idea. It can increase sms usage and revenue for MTN like it did with me.

Imagine if Nigerian banks decided to give back some cash to their customers during this period. I don’t think our organizations know how to perform social responsibility marketing. They believe so much in lobbying government than winning over the consuming public.


In this first review of startup Nigeria investment guide, I made it easier to understand Nigerian market outlook in a pandemic era. What’s happening now in the market was never expected. No one saw 2020 as a year of the virus, but that’s everyone’s experience now.

The markets are crashing for most stocks. Consumer purchasing power is failing rapidly and without restraint. Supply is also drying up for most needed items, even as the global market is experiencing its worst production cut ever.

Most factories are shut down, including businesses, worship and entertainment centers. International tournaments and events were either postponed or taken online were its applicable. And the world changed this year, but not just the Nigerian investment outlook for startups.

Chinedu David
About The Author: Chinedu David An inspiring writer with several years of experience in journalism, consulting and training. Worked with Success Digest magazine for over a decade. Founded MyStore - an online store in 2013. Trained several startup entrepreneurs in telecom sector, LPG (oil & gas), and on Cryptocurrency investment. A born again christian, who's committed to spreading the gospel of Jesus Christ with passion. Drop a comment below and he will respond to your query. He can also be reached via email: or Call/Text/WhatsApp: 07087770518
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