«Home

Investing In Nigeria: How Risky?

I;m beginning to start investing and doing business back in Nigeria.

I found out labor is cheap and resources are readily available but i'm scared of security.

Can anybody with experience give me a down low of how to start and be successful in business in Nigeria?

Will family be trustworthy enough to manage a business for me?

Avatar
Newbie
22 answers

Well, i will not dispute most peoples coment here on ur issue, but i will not totaly agree with them, because as much as we have bad & curupt poeple in Nigeria so we have people of honour, intergity, reliable and trustworthy character. At least to evey cases in life there's always an exeptions. An achiever/a wise sees opportunity 'and grab' where others sees failiure and misfortune while a losser/ caward sees otherwise 'and put his tail btw his leg'. No risk no gain but risk wisely, shine eyes, put your hear to the grand and you will eat the fruit of the land. As a matter of fact there are great investment in Nigeria and ways to go about it for good attainable profit. NIGERIA IS THE ONLY PLACE IN THE WORLD WHERE YOU CAN INVEST & MAKE THE GREATEST OF ALL PROFITS You could call me let's talk 08020621510 MAKE SURE YOU CALL & AND HeR FROM ME!!!

0
Avatar
Newbie

You may check out this, it may be of help:

http://www.prlog.org/11980615-manaconser-releases-its-new-risk-study-with-mitigation-techniques-for-investments-in-nigeria.html

0
Avatar
Newbie

However, i think investing in Emerging Markets always have more benefits. There are Incredible opportunities in Nigeria, Far more cash to be made than in the west - The west is the past, we are the future!

But just be careful - Endless opportunities comes with endless wahala. If you are expecting the level of transparency that you are probably used to in the states, my brother RETHINK! , you have a unique opportunity to be able to cut corners in Nigeria and the market is still very much open, not flooded like in the west - Which business you wan do for yankee wey them never do already like 50 years before you land?

THINK NAIJA BUT GET RESPONSIBLE PARTNERS FOR YOUR BUSINESS!

Forget emotions when trying to make money - You can always give your brother pocket money or a loan when your business is successful - he doesnt have to run it to the ground!

0
Avatar
Newbie

Being Nationalistic doesn't save the investor,  If you throw your hard earned cash down the gutter because you think OH I AM NIGERIAN,  I sorry for you oooh! business no sabi family or nation.

The simple truth is, Business should remain business,  investing for profit! (get rid of the emotions!!) if you do your research and there is an opportunity, please invest but do it the same way you will do it anywhere else,  with caution. Dont rely on Family to run your business on the basis of their relationship to you alone - first check their experience with other businesses. or find someone who knows what they are doing!

This applies when investing in Nigeria or in the moon! 

In my own experiences, Family has never made me profit,  poo i even lose my capital join!

I dont think they mean any harm, ''The reason is simple, they would not manage your funds properly because they have this false notion that money is easily made overseas and when you invest 1 million naira - poo you must have 100''.

Make sure the person managing your business is very enlightened to the ways of the world and has more conscience than GREED!

0
Avatar
Newbie

Oke- amu, do you use africanselect? if you do hows their service?

0
Avatar
Newbie

meanwhile the US EXIM BANK have removed Nigeria from the list of countries that is too risky to do business with ,details below ;

[size=8pt]High risk nations: US EXIM Bank delists Nigeria[/size]

By Kenneth Ehigiator & Emma Ujah

Posted to the Web: Friday, March 23, 2007

LAGOS — THE US Export-Import (EXIM) Bank and aircraft lessors overseas have de-listed Nigeria as a high risk business country in aircraft financing, following the Federal Government’s ratification of the Cape Town Convention which the 2006 Civil Aviation Act engendered.

This came at a time Bank PHB and others in the country expressed their commitments to efforts to assist Nigerian airlines re-fleet with newer and modern aircraft.

Meanwhile, the country’s external reserves is back on the high as it hit $43.38 billion as at March 16, from $41.95 billion a week earlier.

Director-General of Nigerian Civil Aviation Authority (NCAA), Dr. Harold Demuren, who disclosed this at an aviation forum in Lagos yesterday, said the Federal Government’s ratification of the Cape Town Convention was in efforts to empower the airlines for safe operation and growth

“When airlines in the country, in the past, leased aircraft from lessors abroad and defaulted in payment, they run to the court to seek injunctions to prevent lessors from taking over the plane, and this has really put Nigeria in the bad books of aircraft lessors.

“But right now, that has changed because I, as Director-General of NCAA, has signed a bond with these lessors to act as guarantor for the airline and to ensure that they get back their aircraft in case of default. If there is any default from now on, we will simply re-register the aircraft and allow it to fly out.

“This has really increased the confidence of lessors and aircraft multilateral international institutions. They are very happy with Nigeria to the extent that they have removed our name from the list of high risk business countries in aircraft financing and acquisition,” Demuren said.

According to him, the move was informed by the Federal Government’s desires to help local airlines in the country re-fleet with new and much more modern aircraft.

He said the ageing Boeing 737-200 aircraft which most Nigerian carriers use at the moment was too expensive for the airlines to maintain, adding that a staggering 60 per cent of the cost of operating the plane results from fuel alone.

Demuren said there was no way Nigerian airlines could make money for growth, if they keep spending so much on the cost of operating ageing aircraft.

He said: “Sixty per cent of operating cost of B737-200 alone is fuel, and most of our airlines use this aircraft type for their operation. With this, airlines can’t make money.”

The NCAA boss said, beyond providing guarantee for the airlines to acquire new aircraft, the Federal Government had also designating some of them on viable international routes, such as the US and UK, to enable them make enough money for safe, secure and profitable operations.

Speaking at the forum, Managing Director of Bank PHB, Mr. Francis Atuche, said Nigerian banks were, by virtue of recent consolidation, now more than ever prepared to invest in the aviation sector.

“Banks are already looking at pulling resources together to build airports and hotels at airports in the country. So many international investors are approaching Nigerian banks for direct investment. Banks in Nigeria now have sufficient funds to put into aviation financing,” he said.

External reserve hits $43.4bn

The nation’s external reserve is back on the rise as it hit $43.38 billion as at March 16, a result of the bullish international oil market where prices have climbed beyond $63 per barrel.

The reserves had gone down to $41.95 billion a week earlier due to low oil output owing to the Niger Delta crises.

Oil revenue which forms the bulk of the federation earnings suffered shortfalls in January, February and in the current month, prompting the distribution of about N 204 billion from the Excess Crude Oil funds to the three tiers of government on Tuesday.

Minister of Finance, Mrs. Nenadi Usman, and the Accountant-General of the Federation, Alhaji Ibrahim Dankwambo, said separately that part of the oil savings would continue to be used to supplement monthly federation revenue until such a time that earnings could match the approved budgeted revenue.

“We are witnessing shortages in revenue because of the drop in production of crude oil. If you remember, the key assumption we had for the 2007 budget is that we will be producing 2.5 million barrels per day at $40 per barrel.

“We are hoping that the situation will improve in the coming months, but if it does not, we have to resort to the excess crude proceeds account. That is why we have been saving for this rainy day,” Mrs Usman told journalists at a recent briefing.

The AGF told journalists on Tuesday that the Federal Government did not want to allow a funding gap occasioned by drop in oil production which has suffered significantly due to activities of militants in the Niger Delta region.

The Central Bank (CBN) Summary of Economic Indicators for Week-Ended March 16, 2007, said the N43.4 billion reserve could finance more than 25 months of foreign exchange disbursement at the current rate of foreign reserves commitments.

The report said inflation rate as at end-January was eight per cent (year-on-year); average interest on savings account, 3.46 per cent, while the average weighted prime lending rate of banks stood at 17.74 per cent.

“The weighted maximum lending rate of banks stood at 18.20 per cent as at March 16. The average price of Nigeria’s reference crude, Bonny light, stood at $63.09 per barrel as at March 16, compared with the average price of $62.66 per barrel as at March 9,” the report said.

The on-going crisis in the Niger Delta, according to the report, resulted in an average volume of output of crude of 2.15 million barrels per day, as against the 2007 budget of 2.5 million barrels per day for 2007.

sources ; http://www.vanguardngr.com/articles/2002/cover/march07/23032007/f223032007.html

0
Avatar
Newbie

while the naysayers dey here de yab rubbish , telkom of southafrica have bought 75% of a local company in nigeria called multi-links ,i wonder why its an outside that would see the positive side of my country more than my fellow Nigerians,details below ;

[size=8pt]Telkom wins entry to Nigeria with Multi-links acquisition[/size]

By Thabiso Mochiko, Business Report, 23 March 2007

Print || Discuss

Telkom, the fixed-line operator, has finally won entry into Nigeria with the acquisition of a 75 percent stake in the country's private telephone operator, Multi-links, for $280 million (R2.1 billion).

Multi-Links is the second-largest private telephone operator in Nigeria, with 162 000 subscribers. It trails StarComms, which has 400 000 customers. Nigeria has 1.5 million fixed-line subscribers and the country has a population of 135.6 million.

Telkom's chief executive, Papi Molotsane, said the acquisition gave Telkom a springboard for further expansion into other west African countries. "The size and nature of growth of the Nigerian telecoms market, its low tele-density of… 20 percent and its pent-up demand for internet access demonstrates that there is immense potential for future growth, making this an ideal acquisition."

Cadiz African Harvest portfolio manager Rajay Ambekar said: "It is a great acquisition and the price they paid seems not to be over the top … and provides Telkom with good growth opportunities."

Multi-links had all the key technologies that Telkom could build on, he added. "What would be interesting to see, on the mobile side, is how Vodacom would get involved. There is lots of potential."

Telkom owns 50 percent of cellular operator Vodacom.

Last year Multi-links was awarded a unified licence, which enables it to offer a diverse range of services.

Dobek Pater, an analyst at Africa Analysis, said that a unified licence gave room for growth for wireless fixed voice services, because cellular operators in Nigeria were charging premium rates. "Nigeria [has] a growing voice market."

Molotsane said Telkom would immediately gain control of Multi-links' board and operations, to "enable us to manage our investment more effectively and efficiently".

The Multi-links transaction comes a few weeks after Telkom's $20.27 million acquisition of internet service provider Africa Online.

Africa Online has operations in Kenya, Tanzania, Uganda, Ghana, Ivory Coast, Namibia, Swaziland, Zimbabwe and Zambia.

Telkom's expansion outside South Africa is shaping up but it is yet to acquire a national fixed-line operator with a bigger footprint. Telkom wants to diversify its offerings to offset local sagging revenues and has identified Nigeria as one of the target markets.

Pater said appropriate opportunities were becoming scarce, and if Telkom had opted to wait until a fixed-line operator with a bigger footprint than Multi-links became available, chances were that it would be a highly contested company. "There is no guarantee that good opportunities will come up."

sources ; http://www.mybroadband.co.za/nephp/?m=show&id=5958

0
Avatar
Newbie

I would have loved to write a long piece on this but "time no dey". I see a lot of amateurs talking NO DISRESPECT to anyone. Using myself as an example I have at least 5 different business partners in Nigeria and they are all trustworthy and brilliant at what they do. You work hard to get good people around you and REWARD THEM well its important to your success. I have lost more money in UK and America than in Naija. I have been 419ed by an English business partner so my people anyone around the world can run away with your money it upto you to choose wisely. It can be done, people are doing it. Please for people without business experience in naija or elsewhere go and do a lot of investigations instead of giving people the negative aspects alone. Some of your points are very valid but you should also include the positives. Naija at the moment is the best place to invest. Obviously invest right. WE ARE TRYING TO GROW OUR LITTLE UP AND COMING ECONOMY so help us help ourselves by promoting our country in a positive image. I have white friends that have invested in naija businesses you know.

0
Avatar
Newbie

I wonder why people are pessimistic in things. That Nigeria is bad Economically, doesn't mean that doing business in Nigeria is a massive NO NO. People should learn to venture into the world of the unknown. Business is all about risk. If no risk, there will be no Business. Even in the highly acclaimed western worlds Businesses crumble, people lose money. So we should give Naija the chance to come up economically by investing more back home. We need to lift our country, than lifting other country.

0
Avatar
Newbie

Okay, maybe I exxagerated a little. My motto is "better safe than sorry".

If he really wants to invest, nothing can stop him, anyway. He just has to do his home-work.

However, from the little I have seen, Nigerian employees tend to need very close monitoring. Being here is not even a guarantee that there won't be fraud or gross negligence. They will lie and cheat whenever they can get away with it, especially if they think you're a naive Americana. They will refuse to accept any blame when discovered.

There are exceptions to this rule. Example: my humble self. I am perfectly trustworthy, righteous, and blameless.

0
Avatar
Newbie

Oga admin , if the warning is the type that condemns every nigerian as untrustworthy then thats not contructive type,rather its the type that do more harm than good ,let me quote what you said ;

Well oga admin the people that manage my business in Nigeria are my family members ,now they have not disappointed me yet ,but that does make them angels either ,so they could fail someday ,but what i would like you to know here is that i trust them just as Americans trusted ken bates and put their money in Enron which he ran down to bankruptcy and many of them lost their life savings .

You say the guy must be here to monitor his business for it to succeed ,well does that mean then that those Nigerian citizens who are based at home are all making it in there businesses ? of because the answer is no ,so u see coming to base in Nigeria does not guaranty that he would make or not make it in his business .

My point here is your response and some other people here make it look like nutting work in Nigeria ,and when that comes from a Nigerian himself then one would wonder what an outside would think about us ,if you don't see something good about your country i wonder who else would do that .

0
Avatar
Newbie

No pain no gain.I advice that u should take calculative risk.

0
Avatar
Newbie

How long have you ben away from Nigeria? The answer willl determine what you already know or need to need.

0
Avatar
Newbie

Investing in Nigeria is not risky, it is the investor that is risky. An investor without sound knowledge and due diligence is a risk to himself. He will flop even when given the best investment opportunity.

0
Avatar
Newbie

Its not only Nigeria. You don't trust anyone around the globe when it comes to business. Get a Business lawyer and get everything signed. If there is no escape strategy explicitly defined in the business plan, don't sign any document. Make sure you have all your witness and all parties involved before any dealings, Irrespestive of how close they are to you. Make sure they understand what they are signing Every violator shall bear the consequence.

Infact when it comes to investment, its better to use people who are already there, pay them some certain % on ROI plus working capital. You don’t just give money to hungry people without any assets and expect them to not steal it including members of your family. This is why wise investors pay companies like Gold Man Sach, fidelity inc, Meryl Lnch among others so they can manage your assets. Note these companies mentioned are financial investment firm that are already there. In investment, we have high risk investors and low risk investors, the difference is that in high risk investment, people invest in start up business while low risk investors invest in businesses that has been existing for considerable among of years. Also another difference is that high risk investors can make more money but chances of survival is lower, low risk people get low ROI but their business has high chances to succeed. If you are not good with math or analyzing financial documents, get a broker who do these things for living,

In Nigeria/Africa we have millions of them to consult. The key to any investor is to do a comprehensive research and know what you are doing before putting your money in any thing. If you are interested in investing in africa/nigeria. Here are some links for you to read, look at the companies, view their stock options, etc depending on your type of investment. For example http://www.firstglobalselect.com/scripts/cgiip.wsc/globalone/htm/index.r

If you need African broker visit http://www.africanselect.com/scripts/cgiip.wsc/tradeone/html/index.r

And then register with them

If you are looking to start from scratch, based on research, most fresh starters fail due to poor planning and high optimism. Instead of starting from scratch, find a merger if possible. If they refuse to take you because what you offer is not competitive or because you lack the infrastructure (infrastructure includes both your trade secrets, capital base, machineries, lands and landed properties and connections), marry fresh bee companies and grow with them,

I will not emphasize enough on how important it is to have all documents with your lawyer in every step and do more research and don’t just agree on what people say. The rule in business is simple, when you start first, the risk is high, as you keep on forging ahead, the risk will be decreasing, the more competitive you get and the more people will be interested in you

Finally assuming everything fails and u think u have enough assets to move on, simply find a broker and invest in other firms until your bargain reaches a point where its undoubtedly going to succeed. This point will be clear to you because Business RISK will decrease on the ROI span will decrease.

0
Avatar
Newbie

You can absolutely trust mine.

0
Avatar
Newbie

[Will family be trustworthy enough to manage a business for me?]

my dear, i dont know how your family is but my "tight, wonderful , loving, caring, family members] were the first to show us not to trust anyone in naija. you definitely cannot trust anyone in naija when doing business especially with the nature of things in the country.

[you must be here]

yep, for you to run things in naija, thats one major advice people tell me, you have to be present else you are going to hear lots of things and they might end up making you bankrupt.

as for importing things, make sure you have good clientele list or someone you can send it to, he pays you and he does the retailing, else you might just be frustrated with the importing business. hope this helps

0
Avatar
Newbie

I guess any further advice depends on the nature of your business, but, is it risky? Yes, definitely. It is very risky!

0
Avatar
Newbie

By security, i mean capital returns, thiefs, fair competition, how many people to bribe to secure permits e.t.c

0
Avatar
Newbie

If you want to start a business in Nigeria, you must be here to monitor every detail of the business personally.

Otherwise, you will just lose your money. People will 'borrow', take, and steal until you have nothing left.

If you must invest in Nigeria, maybe you could invest in the stock exchange market or something. But I don't even recommend that. Maybe you should look for something you can import from Nigeria to the US.

0
Avatar
Newbie

Just go for the nigerian stocks exchange. As the two years oil price forcasting curv is bending upward.

0
Avatar
Newbie

Trust your instincts and go for it! Do not let fear hold you back.

0
Avatar
Newbie
Your answer
Add image

By posting your answer, you agree to the privacy policy and terms of service.