Tuesday, 9 June 2015
Top 21 Lucrative Business, Investment Opportunities in Nigeria (Part 2)
This is the second tranche – concluding part of my essay: Top 21 Lucrative Business, Investment Opportunities in Nigeria. Of course, this is just a guide; there are a plethora of other business and investment opportunities in Nigeria not captured in this piece.
8. Hospitality and Entertainment Industry - The demand for quality hotels, restaurants, Cinemas, Amusement Parks is far higher than its supply in Nigeria. On the area of entertainment, the past decade has witnessed an upsurge in Nigeria’s entertainment industry. There are many talents to be discovered and many unsung artistes in dire need of publicity, branding and sponsorship.
9. Construction companies- Infrastructure-wise, Nigeria is definitely a huge work-in-progress hence Construction companies will continue to play pivotal roles. A lot of Chinese firms, financial institutions are striking Public Private Partnership (PPP) deals with Nigerian government establishments at the Federal, State and probably the local government level.
10. The solid mineral sector in Nigeria is an untapped goldmine. Solid minerals such as Gold, Copper, Limestone, Coal, Bitumen, Bentonite, Tin, Zinc etc. abound in Nigeria. With dwindling crude oil prices and sales, Nigeria is bent to diversify its stream of income and the solid mineral sector will be one of the beneficiaries of this policy. To this effect, the Nigerian government commenced implementation of a duty-free regime on imported mining equipment’s into Nigeria in 2013.
11. Private Refinery, Downstream Oil & Gas Sector – Whereas South Africa with a population of about 53 million people has six functional refineries with total output of about 626,500bbl/d; Nigeria, a country of about 170 million people boasts of only 3 derelict government-owned refineries with a total capacity of about 340,000bbl/d. The said refineries seldom function to full capacity, even if they do; they are grossly inadequate for the country which explains the intermittent petrol scarcity in the country. With the crippling effect of the recent fuel scarcity on the Nigerian economy and the likely bent by the incoming Buhari administration to rein in a fraudulent petroleum subsidy regime, there will be a drive towards increased local refining of crude oil in Nigeria. Prior to now, 18 licenses for private refineries are said to have been issued to private investors in Nigeria but none is currently operational probably due to bottlenecks and their corrupt subsidy racketeering regime. Ever foresighted Africa’s richest man – Aliko Dangote has made a bold move to tap into this opportunity with a couple of refineries under construction by his conglomerate. According to analysts, the eventual passage of the much vaunted Petroleum Industry Bill (PIB) currently lying fallow in Nigeria’s National Assembly will see more indigenous firms participating in the downstream sector of the Nigerian Oil and Gas industry.
12. Commercial transportation - Will increasingly witness a shift towards conglomerates such as BRT, LAGBUS etc. which is the trend all over the world. In the United Kingdom for instance, a transport company known as Travel West midlands and a handful of other smaller transport companies service the entire Westmidlands. Revamping inland waterway transportation, budget airlines, provision and privatization of Nigeria’s railway sector are business opportunities waiting to be tapped into. I think an outsourced bus for companies, schools or taxi network modelled after Ubber Taxi that can permeate the length and breadth of Nigeria will be profitable given the size of the Nigerian market.
13. Logistics and Haulage Services – Haulage and logistics business is thriving and will continue to thrive in Nigeria given the enormous number of goods to be moved from one part of the country to the other and sequel to poor road network and high cost airfares. In the event that a prospective investor in this sector lacks the experience and time to run the business, there are already established Haulage and Logistics firms that such investors can contract out their trucks to on agreed terms.
14. Internet Service Provider (Provision of fast broadband internet service) - Contrasted with other parts of the world, the cost of broadband internet, digital television subscriptions in Nigeria is astronomical despite poor service. In the United Kingdom, a broadband war led to Tesco launching a super-low price of £2 (
N600) a month for
super-fast unlimited data broadband internet.
From the foregoing, it follows that the N15,
000 to N25, 000 (about £100) or thereabout that Nigerians are currently paying
for monthly unlimited broadband subscription is pretty much expensive.
Foresighted Western investors that can offer a better service at a cheaper rate
will surely make a kill.
15. Agriculture - Poultry farming, piggery, fishery (catfish farming) are viable business opportunities in Nigeria because a growing population of 170 million people requires food for sustenance. To give you an idea, Nigeria spends $4bn annually on rice importation alone. Unlike in many Western countries where agriculture is subsidized, that cannot be said to be the case in Nigeria.
16. Storing, processing and packaging of food items - (Palm oil, pounded yam, cassava, tomatoes, plantain, soya bean etc.). These food items can be sourced during their peak season when they are normally cheap. For instance Palm oil bought during the peak period for say
N1,000 could sell
for N2,000 i.e. 100% profit later in
the year when it tends to be scarce. Same applies to yam, tomatoes and other
food items. Further profit will be made if the aforementioned food items are
processed with the help of not-so-sophisticated locally fabricated processing
machines. Well-processed palm oil, powdered pounded yam and fufu are novelties
in Nigeria. Yam, tomatoes, soya bean can be sourced at very cheap rates from
Benue state while palm oil abounds in south east/south-south Nigeria.
17. Importation business – As you know, Nigeria is a consumer-driven and import-dependent economy. A good number of things consumed, used in the country are imported – from tooth pick to electronics. Ironically the sixth largest producer of crude oil in the world imports petroleum products; this tells you how bad it is. Considering the fact that Nigeria is a large market (about 170 million people), if you can carve a niche for yourself with say a fast moving product at a reasonable price, especially now that E-commerce (online shopping) is gaining ground in Nigeria, you are made. Please keep a keen eye on Dollar-Naira exchange rate fluctuations if you fancy import business.
18. Export business – Nigeria is endowed with abundant raw materials and non-oil exportable products such as cotton (the most important natural fibre of the 20th century), Ginger, Garlic, Palm Kernel Oil (PKO) and Palm Kernel Cake (also used as biomass fuel), Yam flour, Pure honey, cocoa butter, gum Arabic, cashew nuts, charcoal, Gallstone (sourced by pharmaceutical companies), mineral ores (tin, zinc, gold, copper et.), rubber, Shea butter, Sesame seed, Chili pepper, fruit juice, yam etc.
19. Distributorship, Supply and Sales of important products – Cement, building materials, pharmaceutical products, fast moving consumer goods (FMCG) etc.
20. Proficient Daycare or Babysitting Centers – The explanation for this viable business opportunity in Nigeria stems from the fact that a blooming population where both parents are probably working needs reliable and trustworthy hands to take care of their wards. Again, given their nuisance and atrocious attitude, house helps are a no-no to many parents who will rather keep their wards with a standard daycare centre than risk leaving them with such house helps.
21. Gambling (Sports Betting, etc.) - On a lighter note but seriously speaking, with reports of over 60 million Nigerians locked in a sports betting frenzy weekly and the betting companies said to be raking in some N1.8 billion daily, sports betting is potentially the new black gold in Nigeria. It runs in some families with father, mother and their children actively patronizing the lotto industry. There is money to be made here if you are a big fan of gambling (sports betting lotto) and variants of it. An innovative gambling or lotto platform will be a money spinner.
(Entrepreneur, Security Analyst/Consultant, Ex-Serviceman, Writer/Blogger, Change Agent)
Visit my blog: www.donokereke.blogspot.com
Contact me on: donnuait (a) yahoo.com
Follow me on Twitter: @DonOkereke