How To Make a Good Investment Portfolio in Nigeria

By | January 24, 2024

Nigeria is considered a populous black nation and dubbed “Africa’s Giant,” is rich in human and natural resources, with many of its potential untapped or underutilized.

Nigeria is full of opportunities for anyone wanting to invest, from the southern part, which is blessed with an abundance of oil and several natural resources, to the northern part blessed with gold and other natural resources. The most profitable investment options in Nigeria are revealed in this article.

There are possibilities to invest regardless of your financial situation. Individuals can invest in Nigeria for as little as 100 naira or as much as millions of naira and anticipate a decent return.

This article discusses low- and huge-income earners’ investing options in Nigeria. Also, for international investors. Everyone will find something to their liking!

Why Build an Investment Portfolio in Nigeria?

A variety of reasons to consider actively investing in Nigeria are available. Nigeria, ahead of Egypt, South Africa, and the rest of Africa, has the greatest economy.

Nigeria is expected to be among top international economies in 2040, ahead of Canada, Spain, South Korea, Italy, Australia, the Netherlands, and others, according to PwC.

How To Make a Good Investment Portfolio in Nigeria

With a population of over 100 million people, Nigeria has the manpower, workforce, and people to facilitate any business success. In comparison to other countries, Nigeria’s minimum salary is modest.

Meaning, that you can save money while getting more done. Nigeria is seeing an influx of big-time investors from the West, China and South Africa. Nigerians are also waking up to the fact that they need to actively invest in their motherland.

Building An Investment Portfolio in Nigeria, What It Takes

It may appear like putting together an investment portfolio is difficult, but it does not have to be. The first step is to figure out what your financial objectives are. 

Determine if your money should be invested in short-term or long-term investments by identifying your specific goals. It will also tell you what form of the portfolio is ideal for your needs.

A portfolio designed for retirement will differ from one designed to generate income during the next five years.

It’s also crucial to determine your risk tolerance. If you’re risk-averse, it means you’re wary of putting your money at risk in exchange for potentially lucrative benefits.

As a result, you should invest your money as safely and predictably as possible. If you have a high-risk tolerance, you are willing to take risks in exchange for a higher return.

How To Make a Good Investment Portfolio in Nigeria

After that, you’ll need to honestly assess your investing abilities to see if you can develop a portfolio on your own or if you’ll need the help of a Financial Advisor.

This stage is to choose an asset allocation strategy. What percentage of your savings will you put into each investment? How do you intend to keep your portfolio balanced and diversified over time? These are all important questions to address, and it’s best to enlist the advice of a professional at this point.

Investments In Nigeria That You Can Invest In, Having the Best Returns

Just as mentioned earlier in this article, there are several investment options in Nigeria. However, here are some of the top investment options in Nigeria which are certain of yielding huge returns in the long run:

  • Agriculture

Nigeria has a population of about 200 million people. And feeding such a massive population is one difficult task. Nigeria is reliant solely on imports since it cannot produce enough food for its population.

In 2018, Nigeria’s Agriculture Minister, Audu Ogbe, at the time, stated that the country spent $22 billion annually on the importation of food. Since the country’s independence, successive governments have tried to limit the importation of food. Given that, numerous incentives have been provided. Bank of Agriculture was established to help agricultural enterprises in getting adequate financing and support.

Many financial institutions, notably Nigeria’s Finance Ministry, provide assistance to firms related to agriculture. Agriculture is unquestionably one of Nigeria’s most crucial investment prospects. If implemented and planned properly, investing in the agricultural sector may be profitable. Crops, cattle, farm equipment, transportation, and other topics are greatly interesting.

  • The Real Estate Industry

Real estate is one of Nigeria’s most lucrative investment options. This is due to the rapidly growing population. And a significant influx of people to big cities like Abuja, Lagos, Uyo, Port Harcourt, and others. Real estate investment in a major metropolis may be quite profitable for investors.

Low-cost homes, building materials, shopping malls, hotels, and a variety of other opportunities are all available. There are numerous ways to earn from real estate investments.

  • Natural gas and oil

Nigeria’s economy is solely based on the gas and oil sector. Local and foreign investors can invest in Nigeria’s gas and oil business and witness their cash investment increase. Nigeria is a top oil producer. Here are places in the gas and oil industry where investors can realize huge revenue.

  • Exploitation and exploration are two terms that are used interchangeably.
  • Marketing of Products
  • Pipe-lining
  • Services for Wells
  • Transportation of petroleum
  • Installation and Construction
  • Gas Production and Marketing in the United States (LPG)
  • Valves, LPG cylinders, and regulators are manufactured, and filing plants are installed. To encourage gas instead of wood and fuels, retail distribution and the creation of simple, versatile, and significantly less priced gas burners are being pursued.
  • Refining
  • Creating industries to manufacture chemicals and natural gas solvents, like formaldehyde, chlorinated methane, and others
  • constructing a facility to produce refined mineral oil, grease, petroleum jelly, and other products
  • The gas and oil industry offers numerous investment options.
  • Exploration

Asides from oil, Nigeria has a plethora of natural resources which have received little attention. Investing in these underserved arenas can be extremely profitable for a committed investor.

How To Make a Good Investment Portfolio in Nigeria

Nigeria’s mining industry is vastly underdeveloped. There hasn’t been much progress. This allows several opportunities for interested investors to come in and take a look.

Final Thoughts

It’s crucial to remember that establishing a portfolio of investments in Nigeria takes time. Remember to personalize it to your investment personality and get the advice of an investment professional if necessary. Don’t venture into investments blindly as it is a game of risk!

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