With approximately 202 million people and one of the largest population of youth worldwide, meaning a fast-growing labor force, Nigeria is a key regional player in West Africa. This multi-ethnic and culturally diverse federation represents the largest investment market in the continent, thanks to its unique location that makes it the center of business in Africa.
2016 was a difficult year for Africa’s largest economy after suffering a recession and a full year of negative growth. However, Nigeria’s economy is slowly making a comeback. Data from Nigeria’s statistics bureau shows that the country’s economy grew by 2.27% last year, which is a slightly higher rate than in 2018.
Now, Nigeria’s economic growth is mainly anchored on the country’s oil exports as the production levels remained stable throughout the last year. Yet, several other sectors have contributed to this economic growth. For example, on the production side, economic growth last year was primarily driven by services such as telecoms as the country’s online presence has been increasing every year.
If you are thinking about investing in Nigeria, you have landed on the right page. From real estate to farming and technology sector, Nigeria is ready for a new wave of investment. We’re going to share some of the best investment opportunities in Nigeria that are certainly worth considering, whether you are a local or an offshore investor.
FGN saving bonds
Introduced in March 2017, the FGN saving bonds are a retail investment instrument introduced by the Debt Management Office to provide an opportunity for low-income earners to gain consistently good returns over time.
The FGN saving bonds represent an initiative of the Federal Government of Nigeria to encourage a culture of savings among its residents. This investment opportunity offers attractive returns with low investment risk, which is why they are considered the safest of all investments in the domestic debt market.
What investing in FGNSB means? When purchasing FGN saving bonds, investors are basically lending money to the Federal Government of Nigeria for a specified period of time. Investors can purchase the FGN saving bonds through a stockbroker who is accredited by the Debt Management Office. Since this investment option is backed by the full faith and credit of the FGN, the saving bonds have no default risk, so, investors are absolutely confident that their interest and principal will be paid as and when due.
Naturally, these bonds also contribute to the country’s economic growth and development. So, the FGNSB are an option for those investors looking for a low-risk investment opportunity
After nearly three years of house price falls, Nigeria’s real estate sector has started to stabilize since last year driven by the improving economic conditions.
Although unlike FGN saving bonds, the real estate sector requires a bigger investment upfront, the country’s steady economic growth is making this sector a great investment opportunity in the long run. The construction sector across the country continues to perform positively, supported by ongoing megaprojects and higher public investment, such as the Eko Atlantic City project, the new city build in Nigeria. Such projects show that the country’s real estate market is on the rise, and this suggests that now is a good time to invest in real estate.
The biggest cities of Nigeria, such as Abuja, Lagos, or Delta, represent the real estate markets across the country with the higher returns potential. For example, in Lagos, the most expensive city in Africa, the most affluent neighborhood of the city, Ikoyi, experienced the highest house price growth of 20% in May last year. Also, Abuja, the capital city of the country, is experiencing increasing interest from both local and foreign investors.
Oil and gas sector
Nigeria has an abundance of natural resources, especially gas and oil. It is the continent’s biggest oil exporter and has the largest natural gas reserves across the entire continent. According to the state-owned Nigerian National Petroleum Corp, the country is expected to experience investments worth $48 billion in the oil and gas sector between 2018 and 2025.
Nigeria’s natural resources provide excellent opportunities for foreign and local investors. At the moment, most of the investment is controlled by foreign investors. And, the government is determined to create an environment that will help attract more investors to this sector.
Information and communication technology
Nigeria is the country with the biggest number of Internet users across the continent. Plus, the country’s Internet user bases is one of the fastest-growing across the entire world. Data from Statista shows that there are nearly 76.2 million Internet users in Nigeria as of 2017, and the numbers are growing rapidly.
Now, given the pace the country’s ICT sector is growing and considering the prevailing potentials, the FGN is targeting an additional $15 billion from foreign investors. The government’s aim is to make Nigeria the preferred destination for vendors to set up more operations to cover the entire West African sub-region.
Thanks to the country’s technology sector’s growth, other alternative investment options also rise across Nigeria. Apart from traditional investment methods, online investment platforms have also gained a lot of popularity with investors. For example, the Forex market has experienced massive growth in the region, becoming a dynamic market with vast opportunities. The modern trading conditions provide investors with lots of opportunities. For example, the PAMM trading system is offered by quite a number of FX brokers, which allows traders to have their money managed by a professional on the trader’s behalf.
The growth of the technology sector has also opened the gates to another investment opportunity for local and foreign investors: digital marketing.
Although the country is a pretty late entrant in the Internet marketing space, and still has a lot to catch up with the rest of the world, there is an increasing demand for online advertising across the country. Moreover, this demand is also driven by the large number of new business ventures just joining the market across all major Nigerian cities. So, considering the shortage of supply, investing in this sector can turn out to be very profitable.
Anchor text: PAMM trading system is offered by quite a number of FX brokers
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