Made in Nigeria

The Spark | Ignite / Connect / Achieve
www.thesparkng.com
Nigeria will mark her
59th Independence
Day anniversary, so
this makes the topic
a somewhat fitting one. The
questions are: Why should you
invest in Nigeria? Is Nigeria
worth investing in?
Look from the inside
It’s easy to be discouraged by
the negative tales commonly
attributed to the country:
Insecurity in various regions,
unscrupulous behaviour by a
small minority and so on.
The best way to take an objective
view on deciding to invest
in the country, is by paying a
visit. If you happen to come in
through the International Airport
located in Lagos, You will
more likely than not run into
thousands of people bustling
with energy.
BOTTOM LINE
Investing In
Nigeria
Notwithstanding the
challenges, there’s always a
way in the market.
Tosin Olaseinde
Almost every Nigerian has
a side hustle of some sort.
There seems to be an almost
never-ending drive to do better
each day. And Nigeria has
a large youthful population
that’s global, yet connected to
the culture and norms.
Walk around some parts of Lagos, and you
might come across someone with Apple ear
pods rocking to Burna Boy’s Ye, or a bunch of
people disappointed in the limited Nigerian
content on Netflix. And, in the remotest of
regions, are supporters of various football clubs
gathered in bars or viewing centres.
It’s honestly a never-ending busy environment.
The challenges
As bountiful as the opportunities for investing
in Nigeria are, they go hand in hand with the
teething problems of a developing nation.
Infrastructure, in some places, is almost non-existent.
Bureaucracy in some lines of business
can often be a dampener.
Community restiveness will crop up from time
to time if you run a large labour-intensive
business. All these add an extra layer to the cost
of doing business in the country.
From the macro angle, shocks occur from time
to time: Foreign exchange volatility, a swift
change in government policies and so on.
It almost feels as if one has to build an ecosystem
(to borrow a lingo made popular by the
country’s tech community). But once you are
able to surmount these issues, the returns on
investment more than compensate.
There are not many countries in Africa, with a
large population of over 150 million. And so,
even if you decide to face a niche market with
the right unit economics, one can and will
make a decent profit.
Where can one invest in?
There are several sectors that are worth investing
in. This article will take a few.
The first is Agriculture. Agriculture accounts for
a significant proportion of Nigeria’s Gross Domestic
Product (GDP). Data from the National
if you decide to face a
niche market with the
right unit economics,
one can and will make a
decent profit.
Bureau of Statistics shows agriculture accounted
for 22.82% or N7.4 trillion of Nigeria’s GDP in
the second quarter of 2019.
A huge chunk of the agriculture practised in
Nigeria is by subsistence farmers. Crop farmers
rely mostly on the rain to farm, making production
seasonal. There is very little value addition
going on, in terms of processing. That’s an
opportunity.
Nigeria’s large population, also means there
is a ready market for agro-allied products. The
average Nigerian tends to spend over 50% of
their income on food. The country also spends
billions of dollars annually importing various
food items.
Education
A large proportion of Nigeria’s population is
made up of young people. About 3.4 of the
population are under the age of 35. The median
age of Nigeria’s population is 18 years.
The educational curriculum still has a few gaps
in comparison with other countries across the
world.
Government schools, at all levels, can’t take
every potential student. Informal education is
largely neglected and yet is essential.
You could decide to either run a school or an
after school outfit, that polishes those that
have already graduated. Many employers have
to spend time retraining new staff before they
begin work.
Fashion
Nigerians love fashion and are arguably one
of the best dressed in the world. The vibrant
owambe culture also provides a ready market
for fashion designers. (an owambe, by the way,
is a social event).
Despite this, the market hasn’t been fully optimised.
This is a clear investment opportunity.
SME services
A large proportion of businesses in the country
are Small and Medium Scale. That is an investment
opportunity waiting to be tapped. Can
you help them with their accounting and taxes,
training staff, logistics or partnering with them
to access markets around the world? How can
you support the SME industries to deliver?
Go deep
The biggest tip for thriving in Nigeria is to build
a deep understanding of how things work.
Work with local partners where you can. Have
a clear understanding of your market, and be
nimble enough to adapt to the changes that
occur. There will be many.
Obey all rules and regulations, as archaic as
they might seem. You can always reach out to
the regulators involved, for a review. Do not cut
corners. It will come back to bite you.
Watch or jump in
At the end of the day, a decision to invest in
Nigeria, or watch from the sidelines is purely
up to you. A few have been burnt, no doubt.
Yet others have found enormous success in the
country, and continue to do so. You can choose
to see things as half empty, or half full.
fli
@thesparkng
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