1. Abundant Natural Resources:
Nigerian Government gives significant importance to pioneer companies especially those who are engaged in building new industries, manufacturing goods for export purpose and planning to expand production.
Eligible Pioneer companies can enjoy the benefits of ‘Tax Holiday’ policy for a duration of up to five years. Other tax-related benefits provided to pioneer businesses include exemption from suppressing tax on dividends which are paid to shareholders from the pioneer profits.
Nigeria has succeeded in creating an investor-friendly environment in various sectors. Some of the investment opportunities in various sectors are discussed below:
Nigeria has a total land area of about 923,768km2. Being arable and fertile the land is highly suitable for agriculture and animal husbandry. To replace oil as a major export product, NEPC has recognized 13 products that can be exported. These products include rice, cocoa, sugar, cashew, and palm oil. This would not only increase the foreign exchange revenues for the country but would also help the country earns revenues via exporting other products and services.
To attract foreign investors, the Federal Government has deployed numerous incentive schemes. The Anchor Borrowers’ Programme launched by Federal Government and Central Bank allow farmers to borrow funds at an interest rate of just 9% per annum. The aim of launching this scheme was to encourage the production of various agricultural commodities like sugarcane, palm oil, cereals, tomato, livestock, roots, and tubers.
To promote the export of agricultural commodities, the Nigerian Government launched various incentives. These include: The Export Adjustment Scheme Fund, The Export Development Fund, and the Manufacture, and Bond Scheme
3. Information and Communication Technology Services:
Excessive Increase in the demand of smartphones, availability, and accessibility of the internet, and the trend of online retail markets has resulted in an increase in the modern concept of virtual businesses. As a result, there is an exponential increase in the demand for IT services.
These have turned out to highly profitable ventures. As a result, many indigenous companies have started earning high revenues by providing various IT services including, developing new apps, develop programs to enhance online payment methods, online transactions, and customer experience.
IT sector provides an immense business opportunity for investors as most of the private businesses, government agencies, and other organizations are looking forward to getting their transactions automated. Another benefit that the foreign IT companies can enjoy is the availability of young, talented and skilled manpower.
Nigerian population further creates an immense opportunity for foreign investors. Nigeria has a population of around 186 million. This indicates a huge potential buyer base as well as potential workforce. For a manufacturing company, it’s a blessing.
Nigerian Government has launched various incentives to expand its manufacturing abilities. Various incentives are given to manufacturing companies which can procure their raw materials from local sources. Agro-allied industries which are into manufacturing of processed foodstuff is one such example.
Nigerian Government also give preference to industries which can provide multiple advantages as far as the economy is concerned. This includes manufactures of spare parts, machine tools, etc.
5. Private Education:
Nigeria is undergoing a transformation phase as far as the economy is concerned. The country is working towards becoming an international economic power.
To achieve its aim, the country has a high demand for knowledgeable tradesperson, skilled agricultural workers, computer programmers, etc. This has created a perfect opportunity for foreign investors who are looking to invest in the private education sector especially in the field related to ongoing programmes in the country.
Nigeria still has a high underemployment rate. Hence, businesses that can provide distance learning, private coaching or night schools can earn huge returns by investing in this sector.
6. Real estate and construction:
Investment in the real estate industry has been considered as one of the safest options. In the past few years, there has been a significant rise in the construction of houses to meet the rising demand for residential accommodations.
To further enhance investments in the real estate sector, PEBEC has made various changes to make things easier of the investors. Permits to carry out constructions in Lagos State can be obtained electronically moreover the duration for obtaining these permits has been reduced to 20 days. In addition to this, the consent fees have also been reduced to 1.5 percent from the earlier 6%.
Even the Capital Gain Tax has come down to just 0.5%. To encourage realtors, Lago and Kano States have simplified the entire process of Land registration as a result, the registration is now gets completed within 30 days which is much lesser as compared to the earlier duration of 77 days.
Spurring demand for houses in Nigeria and the steps taken by the government to attract builders and investors, together have created a great opportunity for foreign investors.
The Federal Government has taken the approval of developing NESI the Nigerian Electricity Supply Industry. The main aim of this project is to ensure effective delivery of services by both the Nigerian Electricity Regulatory Commission and electricity distribution companies.
In the past few years, the Nigerian Government is emphasizing more on using other alternatives of power generation like hydro and gas power generation. Many people have started using solar panels for generating electricity.
Many local, as well as foreign investors, have invested in building IPPs (Independent Power Plants) at various locations. The recently passed MAP Regulations have also created a great opportunity for investors in the power sector.
To avail this opportunity, interested investors need to apply for the permit, and the results will be based on the outcome of the bidding process.
8. Oil and Gas:
Though the Nigerian Government is working on shifting its focus from the oil sector, still, the importance of this sector cannot be overlooked.
The Federal Government is also working on using the country’s natural gas reserves for generating power. The construction of FPSO shows an extraordinary implementation of the Nigerian Oil and Gas Industry Development Act. In this project, 6 out of 18 modules were manufactured locally.
Nigerian Government encourages and support such kind of projects which not only enhances Nigeria’s industrial development but also creates job opportunities for its people.
In order to improve transport facilities, the government has spent lots of money on developing the country’s infrastructure.
This has created a very good opportunity to invest in the transport industry. The Government is also planning to build 2 new seaports in Lekki, Lego State and Bonny, River State.
The development in the aviation sector is also not lagging behind as the Federal Government has already approved to build International Airports aviation and maritime industry to harness these opportunities.
10. Media and Entertainment:
AS per the PwC Nigerian report, Nigeria is considered to have the fastest-growing entertainment industry. Nigeria’s music revenue is expected to rise at a 13.4% CAGR and would reach the mark of US$73 million by the year 2021.
Nollywood, the Nigerian movie industry is the 3rd in the world. Social Media has become a modern entertainment medium. For any investor, Nigeria’s music, movies, and art is sure and sure a profitable bargain.
Sports: Nigerian people like watching sports events on T.V. or on the internet. However, the poor sports infrastructure and lack of development in the sports industry result in the lacklustre attitude of people towards local sporting activities.
Nigeria does have an audience who can pay to buy good sports-related content. However, this sector remains under unexplored. An investment in local sports industry could turn into a profitable deal and would also contribute to increasing the country’s GDP.