Nigeria has a population of 180 million majorly youths. The government cannot provide employment for the ever-increasing populace.
The need for investment to diversity sources of income are necessitated by higher cost of living with no increment in real value of wages. Making extra income should be a priority for everyone. Investment transcends profit making, it creates jobs, driving the economy and creating growth.
Investment Tips for Beginners in Nigeria.
- Investment is for all earners, low or high.
- Define your financial short term, medium and long term goals.
- Start investing early.
- Have realistic, measurable and time framed expectations.
- Taking Smart risks with the investment. Avoid blindly putting money.
- Investment education would enable you to improve your understanding of market trends, investment pitfalls and enable you acquire business acumen.
- Diversify your investment, do not put all your eggs in one basket.
- Investing through stockbrokers or fund would help you secure your investment. Investing the money through professionals who are equipped with financial knowledge would help protect your savings.
- Ability to monitor your investment
Investment Opportunities in Nigeria.
- Agricultural sector:
With 84 million hectares of arable land and only 45% cultivated, our agricultural resources remain abundant for all. The natural agricultural resources are barely being tapped.The present government is placing priority on agriculture. The goal set by this administration to achieve food self-sufficiency by 2019 has propelled the sector and made the venture a highly profitable one. The volatility of the oil prices has driven a lot of businesses into agriculture.The demand for fish, meat and egg has made livestock and fisheries farming very lucrative, with over 180 million mouths to feed, this business will never run out of customers. The planned ban by the federal government on frozen or live poultry beds would create an enabling environment for the venture to thrive further. The lack of expertise and modern machinery are pinpointed as the major causes for failure in this business. Agriculture is not just about farming, agribusiness covers consultancy services to farmers, supply of input materials and machinery, marketing and storage of agricultural products.
- Stock market: Investment in the stock market is like planting a seed and expecting several fruitful plants to spring up. Return on investment(ROI), money, time and energy determines the type of investment one embarks on.Companies listed on the Nigerian Stock Exchange are successful and can be considered for investment. Ownership of shares in a listed company legally qualifies you as a shareholder, a partner, stake holder and owner of that company.This type of investment is passive, you require little or no effort in running of the company. The return on investment is usually paid once every financial cycle. The unpredictability of the stock market can take a huge toll on your investment portfolio, financial and business education is vital to understanding how to take smart risks. In 2017, the Nigerian Stock Exchange was one of the best performing stock markets globally. The best performing shares raked in between 180% to 220% return. Out of 111 stocks, only 38 reported losses.
- Government security: This is a government fixed security that is offered for short term periods of 91 days, 182 days or 362days. Government treasury bills are one of the safest investments for anyone with spare cash looking to reap future rewards. This was a favorite investment for in 2017 because of the high interest rate which was between 15% – 20%. Treasury bills have zero risk as the government has not been known to default. It is usually given for a period of days, 182 days and 362 days. To make considerable profit, a minimum of N1 million is required as initial investment.
- Real Estate :
This means buying, selling and renting of properties.Buying properties such as office spaces, apartments, shopping complexes is a better long term investment that saving huge sums of money in the bank.This is one of the best ventures with low risk and long term benefits. Real estate has proven to be inflation proof.The prices of property hardly go down especially in our bigger cities such as Lagos, Port Harcourt, Abuja and Kaduna. The return on investment is slow and long term therefore it is not a quick money making venture. Many visionaries were able to make huge profits from land properties by foreseeing the prospects of barren areas of undiscovered land. The risk of this venture is land or property registration fraud is which prevalent because it is difficult the verify the owners of properties or how genuine their documents are.Property development and land flipping are the most common types of real estate investments carried out in Nigeria. Property development requires a lot of capital, it basically involves buying spaces or old properties in nice locations and renovating it to meet the standards or demands of the area. For example, buying old properties and converting them into luxury apartments or shopping malls in a high brow area could fetch a lot of profits. Land flipping involves buying and selling of properties quickly in order to make profits.The sale of bricks, blocks and cement could also generate some money.
Exporting business is highly lucrative, unlike importing where you have a limited local market, exporting opens you up to a larger and more profitable global market. This creates endless possibilities for your products.Determine products to export after studying market trends and customs policy, register your company with the Corporate Affairs Commission, source foreign customers of your product through chamber of commerce or agents, find suppliers of the product and understand the logistics. Exportable products in Nigeria include palm oil, garlic, sesame seeds, plantain, cocoa, bitter cola, walnut, kolanut and moringa seeds.
Sole proprietorship or joint partnerships are a means of pooling capital together to generate income. Businesses such as day-care services, laundrymat, cyber café internet services, sewing bulk uniforms and transport business are innovative ways of diversifying one’s income. The government is doing a whole lot in terms of improving the ease of doing business, removing bureaucracies and reducing corruption that has riddled our start up procedures. Venture capitalist are investing in Nigerian start-ups more readily. The new technology wave sweeping the IT industry in Nigeria is highly encouraging. Companies such as Andela, BudgIT, Taxify, Ogataxi and CC Hub were recently praised by Mark Zuckerberg. Ever sector you look at in the country, there is work to be done, improvements to be made. This creates unrivalled opportunities for investment.