6 Best Investment Opportunities in Nigeria  to Invest In (2020)

6 Best Investment Opportunities in Nigeria to Invest In (2020)

Let me start with a story of a friend of mine Sofia, who we got into a conversation on WhatsApp about investment opportunities in Nigeria.

I tried explaining the best investment opportunities in Nigeria she can take advantage of but yet she didn’t even get a clue of what I was saying.

Then I figured out it was a better idea to just write about it for her and for so many other people out there who need to know the best investment opportunities they can put their money into in Nigeria.

Having that said;

Firstly let me explain what an investment really means.

What is an Investment?

According to investopedia.com, an investment is an asset or item acquired with the goal of generating income or appreciation.

Investopedia further explained that investment is the purchase of goods that are not consumed today but are used in the future to create wealth.

By that definition the term “investment” refers to any mechanism used for generating future income or wealth.

Where to invest your money in Nigeria to make a fortune?

Even though people do ask me questions like:

What can I invest on in Nigeria?

How can I invest money wisely in Nigeria?

How can I invest 100k or 200k in Nigeria?

All those questions are what I do hear almost every single day of my life from people around me.

But the truth is, it’s not about how or where should you invest your money into, it’s about how financially literate you’re.

Common! Anyone seeking to invest and make more money should know that.

Financial literacy is a must for every single person wanting to be financially successful.

I could remember when I was starting out, I read almost all the financial literacy books; rich dad poor dad and richest man in Babylon was my favorite.

When you’re financially literate the chance of you searching for something like “what are the best investment opportunities in Nigeria” is low because you will already have the basic investing knowledge upfront.

However, not everyone is financially literate and that is why I will advise you to read any one of those mentioned books above first before you even take any investment action.

So without further ado, let me quickly show you the best investment opportunities in Nigeria you can invest in and make a huge amount of money.

Best investment opportunities in Nigeria to Invest In

1. Bonds (Secured investment opportunities in Nigeria)

A bond is a contract between a lender and a borrower, whereby the borrower agrees to pay the lender interest and repay the principal at stipulated periods.

What is FGN Bonds?

FGN Bonds are debt securities (liabilities) of the Federal Government of Nigeria (FGN) issued by the Debt Management Office (DMO) for and on behalf of the Federal Government.

The FGN has an obligation to pay the bondholder the principal and agreed interest as and when due. When you buy FGN Bonds, you are lending to the FGN for a specified period of time.

best investment opportunities in Nigeria

The FGN Bonds are considered as the safest of all investments in domestic debt market because it is backed by the ‘full faith and credit’ of the Federal Government, and as such it is classified as a risk free debt instrument.

They have no default risk, meaning that it is absolutely certain your interest and principal will be paid as and when due. The interest income earned from the securities is tax exempt.

Who Can Invest in FGN Bonds?

Anyone who loves making their money work for them can invest in a FGN bond. You can be an individual or corporate body.

What are the major benefits of FGN Bonds?

1. Tax free Income

2. High and stable returns

3. Free from default risk (repayment is guaranteed at the maturity of the FGN Bond)

4. Collateral for borrowing (the FGN Bond can be used as collateral to raise financing)

When does the Government Issue Bonds?

The Government via the Debt Management Office (DMO) will first issue a primary auction. A freshly issued bond usually takes place on the third Wednesday of every month.

How do I invest in FGN Bonds?

You can invest in bonds through a Primary Dealer/market maker (PD/MMs).

PD/MMs can be banks, investment houses, brokers etc.

To invest you will need to approach your chosen PD/MMs and fill a form. In the form you fill your Personal Information, bank details for payment of your interest, CSCS numbers, the amount you wish to invest, your bid interest rate and then sign. You can invest a minimum of N10, 000 and multiples of N1, 000 thereafter.

How to Invest in FGN Bonds through an app?

Download wealth.ng app on play store, follow the instruction on the app step by step and that is it.

2. Treasury Bills (Easy investment opportunities in Nigeria)

One of the best investment opportunities in Nigeria is Treasury Bills.

best investment opportunities in Nigeria

Treasury Bills are government-guaranteed debt instruments issued by the Central Bank of Nigeria (CBN) on their behalf to finance expenditure. The CBN also uses treasury bills to control money supply in the economy.

Where can I buy Treasury Bills?

Treasury Bills can be bought through any official dealer. The easiest way these days are through Treasury bill mobile applications.

A few example apps are; Wealth.ng app, Sterling Bank’s I-invest etc.

3. Mutual Funds (Diversified investment opportunities in Nigeria)

best investment opportunities in Nigeria

A mutual fund is a type of financial entity made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets.

Mutual funds are operated by professional money managers, who allocate the fund’s assets and attempt to produce capital gains or income for the fund’s investors.

Why should I even invest in mutual funds?

Mutual Funds afford people who do not know much about the business of buying and selling securities like stocks and bonds to invest and make money.

It also gives them an opportunity to save for the future.

By investing in mutual funds you have an opportunity of investing in a portfolio of heterogeneous instruments rather than having your money in just one basket.

For example, your N200k investment in a single mutual fund can represent an investment in bonds, stocks, treasury bills, agriculture, real estate etc.

Is it even Profitable?

Like every other business Mutual Funds are also exposed to the same risk and rewards that can determine whether they make or lose money.

 But since no business originally sets out to lose money they will often tell you that they are profitable.

 However, you can know how profitable a mutual fund is or can be if the fund owners already have a history.

Most of the managers already have experience in running funds and so must have track records of their performance in the past.

It is also important that you look at what type of returns they intend to offer to their investors.

How much can I start with?

Mutual Funds typically have an investment band depending on the nature of the fund. Some can be as low as a minimum of N5K, whilst some can be N100K and others N1M.

How can I invest in mutual funds online?

You can visit Cowrywise.com to get started or better still you can download their app on Play Store and Appstore.

4. Real Estates (Tax-Free investment opportunities in Nigeria)

best investment opportunities in Nigeria

This is my favorite investment option. I love real estate.

In case you don’t know who I am……Read About Me HERE

What is Real Estate Investment?

Real estate investing involves the purchase, ownership, management, rental and/or sale of landed properties for profit.

Investing in real estate is more than just finding a place to call home. Investing in the real estate sector in Nigeria has become increasingly popular over the last couple of years and has become a common investment thread.

best investment opportunities in Nigeria

The Real Estate sector is currently booming in Nigeria and people are making millions in it, irrespective of the economic downturn, it can be seen as a real money-making machine.

One thing very good about the real estate business in Nigeria is that the investment opportunities it presents are so diverse, there is something in it for everyone and you grow in the business, you can also expand your portfolio.

Although the real estate market has plenty of opportunities for making huge profits, buying and owning real estate is a lot more complicated than any other investment opportunities in Nigeria

There are several ways of investing in real estate, some of them include:

1. Real Estate Investment Trusts (REITs)

Most Nigerians do not know about Real Estate Investment Trusts (REITs).

REITs are one of the other investment opportunities in Nigeria that are not yet tapped.

REITs are a form of collective investment scheme regulated by the Securities and Exchange Commission (SEC), which pools capital from investors and uses the same in the acquisition of income-generating real estate, mortgage loans, or a combination of both.

The portfolio of underlying assets is placed under professional management to maximize returns to the investors, who are able to hold an indirect interest in real estate on a flow-through basis, placing them in a position as if the property were held as a direct investment.

REITs are bought and sold on the major exchanges, just like any other stock too.

2. Rental Properties Investments

Rental properties can generate income and perpetual cashflows, but the return on investment doesn’t typically happen right away.

Rental property investments are also risky because of how many variables can affect its performance, like the housing market or your ability to keep it rented.

So, if you are wondering if you should invest in real estate, really consider how appropriate this type of investment would be for you and your situation first.

But trust me there is a lot to be made here.

3. Land Banking

Land banking is the act of buying undeveloped land with the goal of holding it for a while and selling it for profit at a future date when the price appreciates.

Lands are other investment opportunities in Nigeria that are making people rich.

I call this real estate investment: Pile of Cash Machine.

5. Stocks (Powerful investment opportunities in Nigeria)

Historically, stocks have outperformed most other investment opportunities in Nigeria over the long run.

What is a stock?

best investment opportunities in Nigeria

A stock is a unit of a share of a company that is traded on the floor of the Nigerian Stock Exchange (NSE). It is also often referred to as equity. Units of stock are called “shares”.

Companies issue (sell) stock to raise funds to operate their businesses.

Where do we get stocks from?

Every company has shares which the owners put down claim to.

When you go to register a company at the Corporate Affairs Commission (CAC) you typically say your authorized share capital is N10m made up of 10m ordinary shares of N10 each. This means your initial capital at the start of your company is N10million represented by those shares.

Whilst the value of your capital may increase over time, your shares remain the same till you decide to increase it again and register the same with the CAC.

When the shares are listed on the floor of the NSE they are tradable as stocks meaning people can buy or sell them.

What is the Nigerian Stock Exchange?

The NSE is a market for buyers and sellers of stocks to transact officially.

In Nigeria, like in most exchanges all over the world, a company needs to fulfill certain laid out criteria to be able to have its shares traded on the NSE.  Some of the criteria are that the company must be a public company and must have more than 50 shareholders (owners).

Whenever a company decided to sell shares for the first time on the NSE, they perform what is called an Initial Public Offering (IPO).

A subsequent offering of shares by the company can come as a Public Offer (PO) or a Rights Issue.

How to Invest in the Nigerian Stocks

Technology is simplifying things, so therefore getting started with investing in the Nigerian Stocks is much easier these days.

You can invest in stocks through legit mobile apps like; Bamboo, wealth.ng, Chaka, etc.

6. Digital Agriculture (Untapped investment opportunities in Nigeria)

Digital Agriculture platforms are relatively new and untapped investment opportunities in Nigeria and are also part of the technology disruptions in the agricultural sector.

These platforms provide a bridge between farmers and investors.

best investment opportunities in Nigeria

The money you invest is used to sponsor various kinds of agricultural projects or different stages in a particular project. 

This may include land acquisition, cultivation, planting, harvesting, and marketing of the products.

The companies provide a digital platform where people who have the resources go and put their money down to help fund small holder farmers who do don’t have access to regular banks to fund their farm projects.

Companies such as, Hearth & Capital, HelloTractor, FarmCrowdy, and VitualFarm are doing amazing work, offering a platform that allows everyday people to invest their money in farming and reap good benefits.

From what I’ve seen so far, these benefits typically range between 5% – 21% based on how long you plan to hold the investment.

The juicy part of this is that, you can begin with as low as N5k.

Other Profitable Investment Opportunities In Nigeria Include:

  • Gold
  • Cryptocurrency
  • Oil & Gas
  • Transportation and Haulage services (logistics)

Over to You

There are many investment opportunities in Nigeria that you can take advantage of.

No matter your budget, there are opportunities for you to invest on.

From as little as N500 to the millions and billions of naira, you can invest in Nigeria and expect a good return on your investment.

The main aim of this article is to cover investment opportunities in Nigeria for low income and high-income earners and for foreign investors too. There is something for everyone!

So the question is; which of these investment opportunities are you going to start with today.

Share your thoughts in comment box below.

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