Nigerian Investments: Three Key Areas

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With a population of over 200 million, Nigeria boasts the largest population in Africa, and also tops the list in terms of the size of its economy. Valued at around US$441.5billion, the Nigerian economy is now ahead of traditional leader South Africa, whose economy is estimated at around US$418 billion.

 

Whilst the natural resource of oil continues to contribute significantly to this overall value, the market is becoming increasingly driven by telecommunications and agriculture. However, one of the fastest-growing areas is that of the financial markets, which have now risen to an estimated value of over $45 billion.

 

Private investors, from both at home and abroad, are investing in the nation on a large scale, with many attracted by government initiatives such as investment allowances, tax exemptions, and tax holidays.

 

Of course, investment is not only for private investors and multinationals. With an increasing number of Nigerians moving into the middle classes, the area of smaller-scale individual investment seems set to boom, with business-savvy Nigerians assessing the latest news headlines, increasingly discussing subjects such as the best list of forex brokers, and other ways to sensibly invest their funds.

 

With that in mind, we now outline three of the most popular areas for investment in the Nigerian economy.

 

Real Estate

A key area of investment in almost any nation around the globe, the situation is no different in Nigeria, with real estate continuing to represent an investment which is seen as one of the safest around.

 

Nigeria ticks many of the boxes professional real estate investors look for – most notably a growing population, buoyed by a migration influx in the major cities.

 

Those looking to invest in this area may wish to consider low-cost housing developments, retail projects and hotels, in addition to those firms who provide the raw materials to fuel such works.

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Agriculture and Farming

A booming population not only places pressure on the housing market but also imposes an increasing strain on the food industry. At present, Nigeria is unable to produce enough food domestically to provide for this growing population and – like many other large population nations – relies heavily on imported food.

 

Figures from 2018, attributed to the then Agriculture Minister, stated that the nation was shelling out around $22 billion a year on imported food products. However, the government seems keen to reduce this figure by increasing the amount of “in-house” food production, with the aim of reducing costs, and making the nation increasingly self-sufficient.

 

The backing of the government and financial institutions can prove a major benefit to prospective investors, with the coming years likely to see a number of companies in the areas of crops, livestock, farm machinery and equipment begin to thrive.

 

Energy

As one of the largest oil-producing nations on the planet, the energy sector has long been a major facet of the Nigerian economy – attracting significant investment and continuing to thrive even in the face of adversity.

 

With Gas also expanding, courtesy of projects such as the $ 1.1 billion Nigerian National Petroleum Company Limited pipeline development (reportedly well on course and nearing completion), this area looks set to remain a solid investment choice.

 

Energy investment options cover just about every stage of the journey: From companies involved in exploring and exploiting new resources to those involved in the manufacturing and building of wells, and on to refining, transportation and finally, retail distribution. Energy offers a wealth of potential opportunities for the shrewd investor.

 

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