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Money in Nigeria
Why Invest
in Nigeria? Reasons Why You
Should Invest In The Nigerian Economy – (Best Investment And
Business
The act of investing is called investment
i.e. taking out capital or cash in an organization in order to obtain
an additional profit or income.
According to Warren Buffet, investment can be defined as the method of
laying out money now in order to get
more money in the future. So from the
definition, the main goal of all investment
is to make some added income or
profit be it continually or one-time, this normally depends on the
type of investment.
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The benefits
of investment actually go beyond only making profits for the
investor. Investments also create lots of jobs for the workforce of an
economy: thereby, putting on the increase the standard of living and
then enhancing economic growth.
Nigeria
investment opportunities
In Nigeria, the last
year has actually been one of economic progress, with Africa’s
biggest economy just managing to come back into the territory of
growth in the second quarter. The government of Nigerian has already
realized that they really need to make the country as lucrative and
attractive as possible for offshore investors to bring their business trade, capital and skills into the
country. One method they use to go about this is that they give tax
holidays to “pioneer comp,” who are normally engaged in the
creation of export goods, establishing new or even expansion of
production in some vital industries of the economy.
Pioneer firms which
are eligible under the Industrial Development (Income Tax Relief) Act
can simply enjoy an income “tax holiday” for a time that is up to
five years. Also, pioneer firms normally enjoy some other benefits
like the exemption from withholding tax on dividends that is paid out
of pioneer profits. Invest
in Nigeria now
The vice President of
Nigeria Yemi Osinbajo when addressing the meeting of delegates from
the Nigerian Initiative for Economic Development, NEID, United States
at the Banquet Hall of the Presidential Villa, Abuja stated that investors
who are willing to invest in
Nigeria must use the opportunity now in order to prevent regrets
in 10 years when Nigeria finally becomes sixth or seventh biggest
country in the world.
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He said that anybody
who refuses to invest in
Nigeria now, in the next couple of years will be queried by their
organizations for missing out on the very best possible business
opportunity. He recalled how some
firms that missed investing in
Nigeria’s telecoms industry when the very First telecoms
licenses were giving out, actually regretted it later when in just a
year all those that licenses were granted more than double their investments
because in only five years MTN had shown that the industry was very
lucrative. MTN now has over 12 million lines.
Nigeria is a country
that has over 180 million people and in just another 10 years’ time
the country is probably going to be the sixth or seventh biggest
country in the world. There
is actually no way Nigeria will not need power, be it off-grid power
or even on-grid power. Power is actually needed by everybody where we
have a big power deficit. So,
we will be opening up that power sector and anybody that invests in
power sector will definitely make lots of money. Because it is going to be much better and bigger
than telecom” the vice president said. Explore
the Investment and business possibilities in Nigeria
Experts in business
development always say that one of the very best times for one to invest in a business that is new or even expand capacity is actually
during a downturn in economy. They say that despite
the word ‘watch and wait’ attitude by some entrepreneurs,
downturn can be a very good period to invest and then eliminate waste.
Every recession normally generates opportunities
for entrepreneurs that are innovative and inaction is not always
good at such times.
They say that instead
of just hoping for things to get better, entrepreneurs can easily act
in order to improve operations and then position their businesses for
growth when there is a recovery in the economy. Now according to Mrs.
Angela Ihunweze, the Chief Executive Officer of Angela Itambo Company
who is also a business plan writer, recession is actually a time of
economic decline that is temporary during which trade and industrial
activities are low, actually known by a fall in the Gross Domestic
Product in two successive quarters. The truth is that in
a recession, the consumers are affected badly because spending is
normally curtailed and only essentials are always demanded. For
anybody who wishes to start a business, it is very good to take a look
at businesses which address basic needs. Needs that will actually
warrant the citizenry to still spend no matter the state of the
economy,” she says.
These, she says,
normally include food businesses like agro-processing, food packaging,
agriculture and bakery. She also said that, businesses which are able to address the basic needs of the people
always do well in a recession. People are going to eat in order to
keep the body strong. Cultivation of crop most especially vegetables, animal husbandry and food crops are also some of the very good businesses which can be
explored. Invest
in Nigeria, Africa's Largest Investments Economy
According to Goldman
Sachs, Nigeria is actually the biggest
economy in Africa and it is one of the next 11 countries that have
a very high potential of becoming among the biggest economies in the
world in the 21st century. In Africa, Nigeria is
also the most populous country with over 188.5 million people that is
already estimated to be over 480 million by 2050. It is also a
population of youthful people because over 36% are between 15-35
years.
Nigeria is located
advantageously in the Gulf of Guinea and it has direct freight access
to Asia, North America, Europe and South America. Nigeria can also be
the production hub for you to access the developed markets of Europe
and North America, which actually have a combined GDP of over US$43
trillion.
Nigeria
has abundant resources
Nigeria has a lot of
abundant resources that has not be exploited yet. The country is very
well known for its hydrocarbons wealth that is vast. In 2015, it was
home to 37.1bn barrels of proven oil reserves and at current
production rates, this will give the country about 43 years’ worth
of oil revenues. Nigeria also has 5.1trn cu meters of natural gas in
2015, this account for 2.7% of total global reserves.
However, tremendous investment opportunity is also available in the solid
minerals sector. Mineral resources include iron ore, coal, tin and
others. Agricultural products actually include, among others, palm oil, cocoa, groundnuts and coconut. The leather and textile
industry in Nigeria is also booming and it is one of the biggest
producers of oil on the continent making big inflows of foreign
investment. Nigeria
is the most populous black nation
Nigeria is also
referred to as the "Giant
of Africa", just because of its big economy and population.
Nigeria is actually the most populous country in Africa and it is also
the seventh most populous country in the world, It is the most
populous black nation on earth and it is a part of the ECOWAS (Economic Community of Western African
States) member nation together
with Ghana, Benin, Ivory Coast, Burkina Faso, Liberia, Cape Verde,
Sierra Leone, Gambia, Guinea, Guinea Bissau, Mali, Niger, Senegal and
Togo, it has an overall surface of 6.1 million square kilometers with
a population of over 180 million.
Attractive
incentives in Nigeria
The government of
Nigeria has already put in place a very comprehensive package of
investment incentives that can be used to stimulate private sector
investment from in and outside the country. While most of these
incentives usually cover all industries, others are just limited to
only some particular sectors and the application and nature of these
incentives have been considerably simplified. Among these incentives
are the Companies Income Tax Act which has actually been amended in
order to encourage existing and potential entrepreneurs and investors;
Pioneer status gives firms a five-year tax holiday; and then tax
relief is giving for research and development. The
incentives include: ·
Companies
income tax The Companies Income
Tax Act has actually been made in a way that it will help existing and
potential entrepreneurs and investors and the current rate in all
sectors, apart for petroleum, is just 30 percent.
·
Pioneer
status incentive The grant of Pioneer
Status to an organization is usually aimed at enabling the firm
concerned to make a very good level of profit in its formative years.
The profit that is made is always expected to be ploughed back right
into the business. Pioneer
status is actually a tax holiday granted to eligible or even qualified
industries anywhere in the Federation for a time of 3 years with some
additional 1 and 1 more years or even 2 years straight ·
Capital
importation In
order to fund their investments
in Nigeria, foreigners are normally free to bring in any foreign
currency that is recognized into Nigeria, they are not subject to
money laundering restrictions. But such funds will have to be brought
in through a dealer that is authorized (actually a bank that is
authorized by the CBN).
·
In-plant
training This
is normally applicable to industrial establishments which have already
set up in – plant training facilities. This type of companies
usually enjoys a two percent tax concession for a time of five years. ·
Investment
in infrastructure This
is a type of incentive that is giving to companies which gives
facilities that normally should have been giving by government. This
type of facilities normally includes pipe borne water, electricity and
good access roads. Twenty percent (20%) of the cost of giving these
infrastructural facilities to a place where they normally do not exist
is tax deductible. ·
Investment
in economically disadvantaged areas
·
Labor
intensive mode of production ·
Local
value added
·
Re-investment
allowance 1.
Modernization
of production facilities 2.
Expansion
of production capacity 3.
Diversification
into related products ·
Minimum
local raw materials utilization 1.
Petrochemicals
– 70% 2.
Chemicals
– 60% 3.
Agro-allied
– 70% 4.
Engineering
– 60%
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Nigeria
Stock Market – The Gem of Africa
The Nigerian
Stock Exchange (NSE) actually operates a very orderly, transparent
and fair market which normally brings together the best of
African enterprises and investors from all over the globe. Now in
order to become an investor, an institution or a person must chose a stock
broker and then open an account with the Central Securities Clearing
System Plc. (CSCS). A stockbroker
is actually an agent that is appointed and then authorized to buy,
sell or execute instructions on the account of an investor, while CSCS
normally gives central securities identification numbers to
investorsthat is needed for the delivery, clearing and then
settlement of transactions. A stockbroker, in this case, is not refer
to as a person, but to a broker-dealer organization that is (a) a
dealing member of The Nigerian
Stock Exchange (NSE), and (b) is registered with the Securities and Exchange Commission (SEC).
Now as an investor,
in order to select a very good broker to actually represent your
interests, you will have to confirm the status of the broker's with
both The SEC and NSE. The NSE
usually recommends investors meet with the broker-dealer company to
know if the services that they give match their particular needs.
Custodians and stockbrokers actually have a very great responsibility
to their clients which includes safekeeping and management. Nigeria
Mineral and Mining Sector Investment
There are so many mineral resources in Nigeria that are yet to be explored. Back in
2014, solid minerals accounted for more than 0.14% of the GDP,
although it was lesser than the 10.44% which was contributed by oil
and gas.
In 2012, the Nigerian
Extractive Industries Transparency Initiative (NEITI) did an audit
which actually showed that Nigeria has more than 40 various types of
precious metals and latent solid minerals. Now according to the
research, 70% of the mineral endowments are situated in the northern
part of the country. Nigeria’s solid minerals and their
economic value
The solid minerals
which are available in commercial quantities in Nigeria include gold,
columbite and tantalite, coal, limestone, tin ore, lead and zinc
amongst others. ·
Columbite
and Tantalite ·
Coal Production
of coal in Nigeria actually dates back to as far back as 1909 when it
was first found in Enugu. But commercial
production finally started in 1919 and in 1950 it got to its peak
of about 583,425 tons, with lots of reserves across Kogi, Kwara, Ondo,
Delta, Plateau, Bauchi and Nassarawa, in addition to Enugu. But the
war that actually started in 1967 actually happened to play a big part
in the abandonment of almost all the mines and the sector has never
been able to recover. Coal is usually used for production of steel and
also for power generation.
The fired plants of coal normally accounts for almost 41% of the
global electricity output while about 70% of steel production globally
is from coal. With big coal reserves in Nigeria, and at about two
billion metric tons, the country has all the capacity to address its
bad power challenge while even meeting the high demand of some close
countries in the African region, and the very significant demand
arising from China, which normally accounts for almost 50% of the
world demand. Currently the commodity is actually trading at
$43.50/ton, which would simply value Nigeria's estimated two billion
metric tons at $87bn.
·
Tin
Ore
Agribusiness
Opportunities in Nigeria
A lot of people still
see agriculture as a
dead-end career which normally entails life-long labor on a farm. But
the truth is it does not have to be this way. There are a lot of
people out there who are searching for opportunities
in Agriculture and are discouraged mostly by the long held belief
and myth that going into agriculture
is actually all about having a farmland,
picking up a cutlass and hoe to make yam ridges and then you will also
get confined to the rural communities permanently.
But, Agriculture is much wider, bigger and broader than only that! Now
let’s take a look at some of the opportunities that is available in Agriculture
in Nigeria nowadays and how youths can simply tap into each of the
value chains. ·
Farm
Inputs
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·
Production
Also
included is; Fish farming,
poultry, rabbit, snail farming, piggery, grass cutter and then quail
breeding etc. ·
Processing
(Products Processing) This
sector is still very much untapped and a lot of opportunities for
income and wealth creation exist here. Right from the processing of
cashew nuts, garri processing, rice processing (rice mills), ground
nut processing (ground nut mills), cassava processing, oil palm
processing (oil mills), fruit juice concentrates (pineapple, banana,
orange, mango, watermelon), frozen snails, livestock processing
(frozen chicken), etc. the list is very long. All
you have to do again is to just do your basic research and then also
meet with an expert to guide you before investing. ·
Storage Now
for those people that are ready to invest into this sector, then creation of wealth opportunities normally exist for agricultural
commodities which are actually seasonal such as millet, oil bean (ugba),
hibiscus, African bread fruit (Ukwa), egusi, cashew, ginger, Ogbono,
onion, corn, kola, sesame seed, gum Arabic, garlic etc There
is always an opportunity for
investors to buy these commodities at the season of their harvest,
when prices are normally low, then store it for a little time so that
you can sell at higher prices during their off seasons when the prices
are very high.
Now
just like any other investments,
be very sure to make your capital, risks, experience and information
available. You also have to be sure you make a very good research and
if possible just consult an agribusiness
consultant. ·
Transport
/ Logistics For
everything that is produce in
farm, transportation is actually needed in order to convey the
inputs and also products from store to the farm and then from the farm
to the target market. In most instances, as is normally seen in
Nigeria, the distance from the farm to the target market is very far
thereby making this a very good
business for the transporters. Now
you can take a very good look around for any farm that is around you,
do some research and you will be on your way to meeting this need and
then making lots of income and wealth for yourself.
·
Marketing
You
can also buy at farm prices from rural farmers, then repackage them
and sell to those people in cities at prices that are higher. You can
easily supply to big malls and shops. You can even create your own
shop, or own a shop at the traditional open air market, own a kiosk,
referrals etc. ·
Export
Business There
is a big international market which exists for most Nigeria’s
agricultural products such as hibiscus, cocoa, ginger, Cashew
nuts, pure honey, garlic, gum Arabic, sesame seed etc. So
with the right knowledge, capital and information, you can simply be
on your way to being a big agro-
exporter and earn lots of huge foreign exchange, because with the
dwindling oil revenue in Nigeria today, agro
export is actually the way forward.
·
Commodity
Trading ·
Agro
– Consultancy Now
with the right experience and knowledge, you can easily
make a living, putting people through on the right way to go about
the setup of their farm, export, agribusiness,
commodity trading and then the right way to play in the agricultural
industry. Some others include;
equipment leasing, packaging, plantation management, warehousing,
equipment sales and servicing. Etc.
Agribusiness is a
very good business. But a lot of people, most especially the younger
ones go into agriculture in
Nigeria, with the get-rich-quick attitude and mentality, thereby
easily losing their capital. The truth is that agriculture
and farming in Nigeria is
not a get rich quick. So as with any other
very good business, you
will have to do your research, have a very good plan, simply find a
gap and also a need to fill, also you will need to have a startup
capital, then lastly get a very good education and information on your
selected agricultural chain which you have decided to tap into. Enormous
Untapped Solid Mineral Deposits in Nigeria
This is the right
time for Nigeria to actually diversify her economy by just tapping
various resources that is scattered all over the 36 States and the
Federal Capital Territory (FCT) because crude
oil revenue which normally accounts for her major cash cow has
depleted very much in the global market.
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It has been reported that Nigeria normally loses as much as N50 trillion yearly from her resources that are untapped and the truth is from only untapped gold, an estimate going into N8 trillion was actually discovered to have been lost yearly in Nigeria. These are from things like taxes, royalties, charges and some other fees which the government at all level of governance in Nigeria would have made from companies and people that is operating in the solid mineral sector because they are more than 56 untapped natural resources available in various states and capable of inviting a lot of foreign investor to the country.
Now for example,
Plateau State has got about 22 different mineral deposits, and
Nasarawa has 21; Kaduna has just 19; Sokoto has 12; Ondo has just 12; Bauchi has 11;
Edo has just 11; Oyo has 11; Benue has just 10; Kogi has 9; Anambra
has just 9; Kwara has 8; Borno has just 8;
Delta has 8; Bayelsa has just 8; Cross River has 8; Imo also has
8; Kano has 7; Akwa Ibom also has 7; Abuja has 7 also; Ogun also has
7; Abia has just 6; Rivers also have 6; Osun has 6;
Ekiti have just 5; Adamawa has 4; Ebonyi has 3;Enugu has 3;
Katsina has 3; Lagos also has 3; Niger has 3; Gombe has just 2; Yobe
also has 2; Zamfara has 2 with Kebbi, Taraba and Jigawa states having
one each. Agriculture
is huge business in Nigeria
Farming is a very lucrative business in Nigeria, only if you know it to be a
“business”. Because the very first problem that is faced about
encouraging Nigerians to start
farming is that, a lot of them normally see agriculture
as a very dirty thing. But the truth is that farming can be a very good source of wealth for you because there
are a lot of commercial farmers who are wealthy. Business world is
actually unstable because a product which reigns today might be
nothing tomorrow, but farm
produce is very different. People will definitely continue to eat
each day, and since we just have certain limited numbers of food, we
are always eating same foods week after week.
If you`re someone who
like orange and banana, then there is no way you will resist orange
and banana because you ate them yesterday. People that love carrot,
water melon, yam, beans, plantain,
rice, cassava products, etc. will not say because they bought it last
week, they won`t buy again”. Most people eat meat
or fish on a daily basis, so cow price will always keep on increasing
and catfish must continue selling, Titus and even some other fish in
Nigeria will continue selling. Chicken, turkey and poultry
birds, etc. will always have high market demand. If you actually know
this fact, then you will be encouraged to simply start
farming business as a Nigerian. Strong
banking and financial sector In the year 2009,
Nigeria took some very good steps to strengthen the banking industry.
These reforms actually came on top of a big banking overhaul in the
year 2006 which reduced the number of banks and then increased a
bank’s lowest capital requirement. Corporate, retail and internet
banking are viewed as very competitive, and also the home loan market
is also moderately competitive and the truth is that since 1999, the Nigerian
Stock Exchange has be having strong performance. Lucrative
telecommunications market In Africa, Nigeria is
actually home to the most
profitable telecoms market which is even growing at double the
African average. The explosion of sectors like the mobile
telecommunications market and the very success of foreign
organization such as MTN all the way from South Africa have simply
showed to everyone that potential can simply be turned into reality.
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Large
consumer market Nigeria has a
population of more than 180 million people and in Africa it is
actually the most populous country because (one in every six Africans
is a Nigerian) and in the world, it is also the eighth most populous
country. The structure of its population is very good with over 60% of
the populace under the age of 40 and a very good regional distribution
of about eight “anchor” cities each having a population that has
over 1 million actually suggests a healthy growth picture going
forward. Fast-growing
economy Nigeria’s gross
domestic product has remained steady and strong, actually growing at a
very good rate in 2015 when compared to previous years. A series of
some latest policy initiatives to transform its agricultural
industry is actually expected to put Nigeria’s growth into some
double-digit territory anytime soon. Nigeria economy
slowed markedly in 2016, thereby going into a recession for the very
first time since 1991. Real GDP contracted 1.5%y/y, which is actually
a reflection of the two and a half year decline in export earnings,
and also fall in the revenues of government which impacted consumer
investments and spending. Well the currency market was the most
evident impact of the very sharp decline in the oil price, with the
NGN/USD depreciating to 35.4% in the official market and then 47.3% in
the parallel market within the year. Apart from the depreciation in
the currency, the illiquidity in the foreign
exchange market also had an impact in the investment and business
environment, with Foreign Direct Investment (FDI) declining to a 11-year low, and then
a collapse in investment as a share of GDP to 12.6% - which is the
lowest level in the past 20 years. The latest string of
economic that was release actually suggest that the economy may have
bottomed out, with some fragile signs of recovery, which is mainly
driven by the improved liquidity in foreign
exchange markets and some policy measures to actually improve the
business environment. Now, the fiscal narrative is unchanged as lower
for longer oil price normally means that some traditional sources of
financing for the budgetary needs of Nigeria
will remain stretched. Nigeria has been projected to actually be the
third biggest populated country in the world by 2050 with more than
400 million people. PwC also projects that Nigeria could even emerge
as the 14th biggest economy in the world by the year 2050, with the
GDP in Market Exchange Rate (MER) place at US$ 3.3 trillion. Now to
deliver good and sustainable growth with per capita gains, Nigeria
will have to boost foreign and domestic
investments over the next 10 years aggressively.
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