Preface
The ravaging economic effects of the coronavirus pandemic coupled with the echoes of the message of the #EndSARS protest will likely persist for a long time to come. Hence, as revealed by my adept assessment, the future belongs to only those shrewd entrepreneurs who are able to take quick advantage of the many lucrative investment opportunities emerging in 2021.
Sectors to watch
If you have money and access to land, one good business you can profitably invest in is commercial agriculture, comprising either crop farming or animal husbandry or the integration of both.
Crop Farming
Nigeria is perhaps the most agriculturally endowed country in the world. Our country has fertile soil and moderate climate suitable for growing different varieties of valuable crops. Regrettably, after decades of neglect, the Nigerian agricultural sector is falling short of its potentials. Time was when Nigeria was the largest producer of palm oil in the world as well as the second largest producer of cocoa and groundnuts. Even today, our dear country is still the largest producer of yam and cassava, despite that this feat has been largely achieved through crude peasant farming methods. If small-scale mechanization, entailing the selective use of simple tractors is progressively introduced, Nigeria should be capable of providing practically all the food and industrial raw material needs of all West African countries. Nigerian investors are equally among the best innovators when the challenge is about standards.
Focusing on staple crops, rice takes the centre stage. We all can see how local rice is becoming a hot cake as a result of the recent ban on imported rice. Interestingly, ample investment opportunities further await the already-existing local rice farmers who may wish to scale up to milling, sorting and polishing, and those merchants who may want to improve the bagging system or embark on the building of silos to store up the excess produce.
Outside of rice, cassava is another staple crop that someone can commercially plant, process and make a lot of money from. From time immemorial, the cassava crop has consistently provided enormous answer to the devastating mass hunger in developing countries; yet, very few entrepreneurs in Nigeria have ever thought of going into commercial (big-time) cassava production. Staple cassava derivatives obtained by local processing fall into as many as seven categories; four of these are common and three are uncommon. The common categories exist in form of Fresh Roots (tubers), Cassava Flours (fermented or fresh akpu and unfermented or dried fufu), Granulated Roasted Cassava (gari), Sedimented (rudimentary)/ Laundry Starches. The uncommon categories occur in form of Leaves (cooked as vegetables), Drinks and Local Medicines. In Nigeria, mechanized cassava processing is still at the developmental stage and the potential is very high. The traditional cassava processing methods are dominant, and varied depending on the desired derivative. Gari best serves as illustration of the typical processed cassava, being the most commonly consumed derivative. With improved efficiencies (in primary production, processing and distribution), the local Nigerian cassava sub-sector has the potential to add more industrial value to existing capacity. In fact, the cassava crop can yield up to 15 different products when processed, and each of these products has relatively large markets. The potential export market is as large as the local market. Both at home and abroad, huge orders for diverse cassava-based primary and intermediate products are oftentimes placed by manufacturers of perfumes, insecticides, pharmaceuticals, livestock products, alcohol, beer and soft-drinks, noodles and pasta. Cassava in form of pellet is also used in the formulation of feeds in the poultry and livestock industries. Europe and China, from time to time purchase large amounts of cassava pellets mainly from Thailand, and to a limited extent from Nigeria and other cassava producing countries. Nigerian exporters must therefore take their pride of place, going forward.
Fruits and vegetables, as complementary staple crops, thrive so very well on every soil across the Mangrove, Tropical and Savannah vegetation belts of the country. Pineapple is one of the most valuable fruit types; its entire flesh (pericarp and mesocarp) and juice are extensively medicinal and very high in Vitamin C and Carotene. Another highly-priced fruit is mango. Another is orange. All of them are in excess during each of their respective harvesting seasons; and scarce during the off-season owing to electricity shortages that hinder storage initiatives. There is a very large industrial market particularly for pineapple products. The recent ban on imported fruit juice into Nigeria has brightened the chances of those who are willing to go into the pineapple juice production business, be it for the domestic or foreign market. The fruit could be marketed as raw produce or processed into juice, canned or packaged in aluminium foils or plastic containers. Owing to its perishable nature, farmers and traders, who resort to selling the fruit in the local market, do not make much profit; the frequent power outages would not allow them to store the extracted juice for a reasonable period of time. An entrepreneur, who could create an independent power source, would be able to preserve the excess raw fruit or extend the shelf-life of the juice. He would then be able to industrially process (pasteurize) and package the juice, and at same time preserve it for a longer time; and that would make it available for the distant market. Just as fruits, vegetables have similar characteristics and market prospects.
Bitter Leaf and Pumpkin Leaf, two of a kind, are both vegetables with similar characteristics: high nutrient content, medicinal, in high demand in Europe and America, and mostly consumed as vegetal food and soup-condiments by Africans-in-diaspora. They can grow anywhere, unlike other leaves that require specific temperatures and locations in order to maintain growth. Fluted pumpkin and Bitter Leaf farming and exportation are both worth-undertaking, indeed. It is a joint business one can start with little capital. Europe and America constitute the largest international markets for fluted pumpkin and bitter leaf. Nigerian entrepreneurs who are privy to information are making a lot of fortune in the lucrative export business; earning huge foreign exchange. This means that for you to understand the export procedures and be able to gain access to the international market, you really need a lot of information. Unfortunately, a lot of other people who rushed into the lucrative vegetable export business without adequate information had their fingers burnt. Before we round off on the league of staple crops, let’s look at the big league – the cash crops.
Palm oil and kernel, cocoa, groundnuts, cotton, rubber, among several others, are the most tested profitable tree/ cash crop that could be cultivated and processed in Nigeria for export. As stated above, time was when these cash crops were the mainstay of the Nigerian economy; they used to earn huge foreign exchange in an equivalent way that petroleum is doing in the present-day context. The contribution of these economic crops had regrettably been allowed to fade. Now that petroleum is also fading, there’s no better option than for prudent investors to return to the traditional export base. This means that those who make a quick entry into the new agricultural export sector will make it earlier and better than others who are now procrastinating. Ivory Coast, Senegal and Kenya are three of the richest African countries. It’s amazing that none of these countries has either oil or gas. Their booming and stable economies are only dependent on cocoa, groundnuts and coffee, respectively.
The secondary forms into which Nigeria’s key export crop produce could be transformed, going forward, are quite extensive. In the past, these produce fetched less than their potential values because they were marketed raw; just as our crude oil today is marketed raw in a regrettable manner. If more value were to be added, in terms of processing, certainly the products would fetch far more in foreign exchange. Take cocoa for instance. If you travel out of Nigeria to advanced countries you would discover by just looking around the airport shops that Nigeria would be a fairly rich country if she specializes in producing cocoa, only cocoa, for export. You would certainly realize that CHOCOLATE or SMARTIES, the sweet candy delicacy processed from cocoa, which every traveller cherishes to buy for loved ones after a long journey, is most times valued far more than most other precious souvenirs. You would also discover that the chocolate drink made by Nestle International or cocoa powder made by Cadbury, is on each count, the leading beverage drink, all over. The fascination in this analysis is that the private sector in Nigeria must take the initiative to open up the agricultural export sector by investing heavily also in cultivation. Yes, agreed that government should provide adequate incentives including improved enabling environment, yet we need entrepreneurs who can take the risk. Remember that nothing ventured, nothing gained. In addition to crop cultivation, Nigeria has all it takes to lead the world also in animal husbandry.
Animal Husbandry
The greatest fascination of the animal husbandry business in Nigeria is that electricity is not needed. Although, there may be need to light up lanterns at night to keep pests and dangerous creatures at bay, that one is not a problem. Animal husbandry is therefore a good project to embark upon in the Nigeria of today where the problem of electricity has constrained the growth of many industries.
Studies across countries and in Nigeria have shown that Beef Fattening, whether on a small or large-scale basis, is a lucrative business. The farmstead approach for rearing the animals is preferred to the ancient nomadic approach; reason being that the animals are confined to a space and prevented from roaming around. The implementation process begins with buying healthy stock (aged 3 to 4 years) at any time of the year, feeding and fattening them for about 120 days (farming cycle), and selling them thereafter. The profit derived from all of that effort is worthwhile.
Poultry is equally a rewarding business if properly managed. Poultry products, chicken in particular, are in high demand in our country as in all other countries across the world. Since the products are less fattening compared to other meat products, they are preferred most especially by a modern society that is concerned about obesity. Hence, there is a regular market for eggs and Layers and seasonal market for Broilers. Poultry management systems can be classified in a number of ways, ranging from the small backyard flock to the one thousand-bird automated system. It is encouraging that the Nigerian government has long placed a ban on imported poultry products. If many people take advantage of the Poultry-import prohibition policy incentive, Nigeria would become not only self-sufficient in poultry production but also export-sufficient.
Goat rearing is a very fascinating business. Because goats are very friendly animals, they’re easy to handle, and therefore make things easy for the small farmer. A good shed (housing) is a critical survival factor. The goat is a ruminant whose balanced diet comprises good mixed pasture, good quality hay, 16% non-urea dairy ration, fresh water and minerals, which are easily affordable. Female goats are called does, males are bucks, and young goats kids. It takes five months after a doe is mated to a buck before the kids are born, two or more. When the kids are weaned, the doe may possibly be milked twice a day, and the milk can be used for drinking, making yogurt, butter and cheese, or can be fed to other young farm animals. A good way to start the goat business is with one Buck and three Does. A goat has an average of two kids once a year; so with your four goats in a year, you will have additional six little ones or thereabout. At the end of a particular season, sell all the old males; bring in a new buck so the old ones are not related to any of the females. When you sell your goat, you can expect to receive more than double your investments at the end of the year. Fish rearing, focusing on cat-fish is also not a bad idea at all.
With the little summaries above, we can imagine how exciting and profitable the agricultural business could be!
Oil and Gas
Even as everyone is emphasizing on the need for the diversification of the economy away from petroleum, the Oil and Gas sector will still remain for some time to come, the mainstay of Nigeria’s economy. The prospects are brighter with the expected coming into being of the petroleum industry law, and the new refineries which will trigger multiple investments in the sector. Though forecasts for Oil fortunes indicate a decline, forecasts for Gas boom depict a rise. The forecasts are based on the following clues: one, gas is cheaper to produce than gasoline, diesel or kerosene; two, gas is more abundant, in terms of reserves. In specifics, the liquefied Petroleum Gas (LPG) will boom in the domestic market and the export of Liquefied Natural Gas (LNG) to the international market will peak in no distant time from now. Prospective investors will therefore do well to position themselves to take advantage of this emerging opportunity.
Bitumen is adjudged to play practically the same futuristic role as Oil and Gas, in the economic development of Nigeria, in the long-run. The terms Bitumen, Asphalt and Tar, are used interchangeably. Bitumen and Asphalt are almost the same in composition while Tar differs much more. Synthetic Petroleum (Heavy Oil) is derived when Bitumen is processed whereas Coal Tar, used essentially for road construction, is derived from a mixture of Sulphur and other petroleum chemicals. Extensive bituminous sediments occur in Nigeria on a 5-8 km wide belt stretching over a length of about 600 km from Ogun up to Ondo and Edo states and even beyond. The Nigeria’s Bitumen is even reputed to be the purest in the world, and reserves adjudged the third world largest. Although judging by the slow pace of bitumen development in the past, it may appear that it would take a longer time than imagined for the country to open up the Bitumen sub-sector. However, the desperate need for additional revenues into the nation’s coffers could trigger the sudden reopening of the sub-sector.
Opportunities are also gradually opening up in the Solid Mineral sector. You might have heard how the Zamfara State government has been trying ambitiously to involve the Central Bank of Nigeria in the process of reopening the mining of gold in the territory. Just recently too, the Oyo State government commissioned a large market for the marketing of processed gemstone that is being mined in the state. If you are an investor with the knack, and in possession of adequate capital for mining, perhaps the solid mineral sector is where to navigate.
Public-Private Partnerships
There are also tremendous opportunities awaiting shrewd private businessmen, who will courageously approach the government, with the proposal to take up the reconstruction and management, on concessional contractual basis, of the ailing infrastructures such as power, roads, public health-centres, and above all the publicly-owned educational institutions. Against the backdrop of dwindling revenues, the government, on the other hand, will do well to initiate such alternative innovative global-best-practice models as public-private partnerships; instead of resorting to endless borrowing that does no one any good. This is going to be the preferred path to future progress.
Property
Property investments will boom if the emphasis is on developing low-cost housing structures for the teeming masses, not the type of the ostentatious housing schemes that dot the landscape of Abuja, which target the upper class; which ironically are increasingly becoming inhabited by reptiles and rodents given that the wealthy people at whom they’re targeted already have abundance of such buildings in Nigeria and overseas, and are not quite unwilling to buy more.
Capital Market
Investing in the shares of blue-chip companies in the stock market, especially in those dealing with food, healthcare and telecommunications, is worth-undertaking. It may sound unbelievable but it is true that Nigeria had the world’s best-performing shares in the outgone Year 2020! Among the world’s 93 major equity markets, the Nigerian Stock Exchange All Share Index of 153 companies was No. 1 with a 27% total average return. Communications, accounting for 28% of the index in year 2020, up from less than 1% in 2015, gained 68%, surpassing health care which came second on the log. MTN Nigeria Communications PLC, the Lagos-Nigeria-based telecommunications service benefiting especially from Covid-19 lockdowns, rallied 58% in 2020, when the rest of global telecom was down 1%. That’s an indication of the best that’s likely to come in 2021 for investors in Nigerian companies. Global X MSCI Nigeria, the largest exchange-traded fund (ETF) in assets invested in the country, has the greatest discount of 32%, which is a record since the fund’s inception in 2013. More than 20 Nigerian companies in this ETF appreciated much faster than their global peers. Apparently because of the many adversities facing our country, including the worsening security situations, Insurance securities are performing relatively well, too. All these point to the fact that it will not be a bad idea if you decide to buy telecommunications, health care, or insurance shares in 2021. At a time when the rates of Fixed Income securities are at an abysmal low in Nigeria, ETF investments as an alternative may be worth investing in.
Buying & Selling of Household Items
In the coming year 2021, small business operators looking for the best type of businesses to go into may wish to consider buying and reselling of essential commodities, particularly raw food and water. That line of business was a hotcake in 2020 during the lockdown; and the profitable opportunities there would surely continue to expand. The most interesting thing about the business is that the barrier to entry is not that high. All that is necessary is for a dealer to look for a very good market and the popular staple food items such as rice, gari, beans, yams and plantain; and buyers would flock in there. For such provision items like and soap and detergent, a neat shop in a strategic location could earn a trader a decent amount of money every day, too. Similarly, if you set up a cold-room in a strategic location and advertise it well, you would most likely have more than enough customers. Recall the coronavirus lockdown experience by which people had to stock their houses with staple food commodities and groceries such as bread, milk, magarine, salt, sugar and the likes.
Transport
School bus service shuttle business will also pay. Many of the parents in Abuja are working-class people who honestly do not have time to drive their children to school and bring them home every day. In so far as the enterprise is duly registered and your vehicle is in good condition and you could prove your trust-worthiness to parents, you are likely to get a lot of committed clients for your school bus operations. Apart from school-run, perhaps it is far more profitable to go into a straightforward transport business, shuttling from a satellite town to the city centre or within a particular territory. People need to go to work, to church, to the market, or just from one point to the other. In short, people must move. You may not know; but taxi drivers in Abuja are noticeably some of the highest earning small-scale entrepreneurs. Depending on the sphere of coverage, many of them earn average gross-income of N15, 000 every day! A duly registered transportation company that offers comfortable rides to customers would indeed attract some decent daily earnings.
Conclusion
If our people invest in these areas today, it is believed they would become financially independent, and our country would gradually develop for a better tomorrow. Interested persons who need further assistance on how to invest in any of the afore-mentioned sectors or projects should contact the author, via: chukwudiodili902@yahoo.com.
