Nigeria is key player in Africa’s social, political, and economic fronts. It has a population of over 200 million people; a figure that is the highest in Africa. It is one of the largest exporters of natural gas and oil in the continent. Additionally, it has a robust agricultural sector. With a GDP of over $375 billion, it is ranked top in African economies.
These statistics prove that the country is a suitable area for business. As such, this article will highlight some of the untapped business ideas and opportunities in Nigeria.
Reasons to Invest in Nigeria
- High population. Nigeria currently has over 200 million citizens. From an entrepreneurial perspective, this number equates to a ready market for various products and services as well as a cheaply available workforce.
- Vast resources. The country is one of the key exporters of oil and natural gas in Africa. The textile and agricultural sectors are also major contributors to its economy. In addition to these industries setting a suitable foundation for the growth of Nigeria’s economy, they act as an array of profitable opportunities for investors.
- Strategic regional position. Nigeria is influential in West African matters. As such, investing in the country will act as a gateway to the larger west African market.
Barriers to Investing in Nigeria
- Corruption. This is one of the vices that continues to hinder robust economic growth in the country. For instance, in 2019’s global index, Nigeria was number 146 out of 180 states.
- Inflation. Low oil prices, slow growth of the non-oil sectors, and low liquidity in the banking industry are some of the factors that have the public worried about a repeat of the recession experienced in the country in 2016.
- High unemployment rate. The rise of unemployed Nigerians means a reduction of the potential market of certain products. This is especially so for the items considered to be wants rather than needs.
Business Opportunities in Nigeria
Beauty means a lot to the modern woman. Similar to other African countries, more ladies in Nigeria are getting steady jobs hence increasing their purchasing power. Social media has also contributed to the popularity of beauty products as most women seek a photo-ready appearance. The beauty industry in Nigeria is estimated to be worth about N500 billion ($1.38 billion) yearly. Based on the fact that this sector is expected to grow even further as the country’s economy stabilizes, it is definitely one of the viable business opportunities in Nigeria in 2020.
Some of the items with a high demand include makeup products, hair extensions, and natural hair products. If you intend to take advantage of this business opportunity in Nigeria, you should strive to introduce a reliable yet affordable line of products. This is founded on the reasoning that while Nigerians are willing to spend on various beauty items, the country’s economic performance still limits their disposable income.
Granted, the Nigerian economy in 2019 was characterized by sluggish growth, high inflation, and reduced investments. Like any other country, one of the sectors that is largely affected by these problems is real estate. However, from an investor’s perspective, this is the right time to invest in real estate in Nigeria. The economic recovery plan, which was introduced by the national government after the 2016-2017 recession, is expected to bring stability to the economy in 2020.
One of the ways of reaping big from, this business opportunity in Nigeria in 2020 is investing in residential and commercial property that target the middle and lower class. Part of the Nigerian dream is to own a home. The population is currently at 200 million and is expected to grow. This phenomenon coupled with increased urbanization creates a high demand for property. Since a large percentage of Nigerians live an average lifestyle, it makes economic sense to invest in affordable housing.
The 200 million people in Nigeria, as well as the extra 5 million projected in 2020, need to be fed on a daily basis. This demand is further enhanced by the high rate of urbanization. One of the ways of profiting from this business opportunity in Nigeria in 2020 is by sourcing various foodstuff from upcountry and distributing them to different towns within the region.
An example of an agricultural product that can bring hefty returns is tomatoes. Nigeria is one of the largest tomato producer in sub-Saharan Africa. However, in an area like northern Nigeria, about 40% of the yield is lost due to a poor marketing structure. With this in mind, it would be lucrative to buy such a product and resell it in the populous urban areas. Tomatoes are just an example of the agricultural products in Nigeria that can yield attractive returns. You can also choose to invest in other agricultural products such as cassava, rice, and poultry.
25% of illnesses recorded across the globe occur in Africa. With Nigeria being one of the highly populated nations in the continent, there is need for a reliable medical system. Currently, there are about 30,000 Nigerians who seek treatment in other countries including the United Kingdom, United States, and India in a year. Subsequently, medical tourism costs Nigerians about $ 1 billion annually. Cancer, renal dialysis, orthopedics, and cardiology are some of the common health issues that push most Nigerians to seek help abroad.
Based on the current situation, investing in the country’s healthcare system is a highly rewarding form of impact entrepreneurship. One of the business opportunities in this sector is the provision of ambulance clinics. A poor road network and subsequent heavy traffic makes it difficult for most Nigerians to access quality services. Other ventures that are profitable in Nigeria’s healthcare sector include mobile clinics and specialist hospitals.
Trading in West Africa is currently valued at about $300 billion annually. With Nigeria being one of the key business hubs in the region, it accounts for about 75% of this figure. Additionally, the country spends about $22 billion yearly on the importation of foodstuffs such as rice, sugar, fish, and wheat. Based on these statistics, there is an unending need for the transportation of goods to the final users in different parts of the nations.
Unfortunately, a poor road network coupled with an informal and underdeveloped logistics sector has been a major challenge in the industry. Fortunately for entrepreneurs, problems yield business opportunities. Advanced technology is one of the ways that one can reap big from Nigeria’s logistics sector.
Kobo is an example of a successful technology-driven platform in the country’s haulage industry. Think of it as a logistics version of Uber. It connects fleet owners, drivers, and clients to ensure efficient and timely delivery of consignments.
Nigeria is one of the key players in west Africa and the larger African continent. Its large population and vast resources are some of the aspects that make it a suitable region for investments. Additionally, the economic recovery plan that is currently being implemented by the national government is bound to accelerate economic growth. From this perspective, investors should consider the aforementioned business opportunities in Nigeria.