Is Nigeria safe to invest in?

Posted by Emeka Okafor on April 19, 2009 at 03:25:41:

With the dwindling oil revenues for Nigeria which is an oil based economy, one wonders if Nigeria would be a safe place to invest in. Even before the recession, no basic amenity seems to be working in Nigeria for instance, electricity. It is not constant and manufacturers are having a hard time to make reasonable profit in the country. Banks are equally having a hard time facing the bad loans they gave to stock investors, the capital market has crashed by more than 80% of it's original value and in the spite of this, there is the rising dollar, civil servants and the employed still have to cope with no salary increase depsite the rising price of things. Major manufacturers are moving to nearby west african countries where there is better supply of basic amenities like lower taxes and constant electricity. What sector then is safe in Nigeria to invest in?
Entrepreneurs are the ones that seem to be getting richer because they set their own prices. I guess those who will be able to make money and profit from Nigeria are those who have wide pool of foreign currency to buy into the capital market. Now is the time to buy. Also investing in other ventures like farming, poultry and bottled water production would be profitable. But it would be easier if one has some US dollars to convert to naira and then investing with it
For instance, intercontinental banks shares were once at N35.00 some months ago when the US Dollar/Naira was about N140, but now the price per share of the bank is at about N8 while the dollar is at N168 to the naira. If one then invests say $10,000 in the Nigerian stock market for the said bank share, he would be able to buy more than (168*10,0000/8)200,000 shares of the company which would have been 1400,000/8) only 1,750,000 shares worth of investment some months ago. If he allows his investment for long term like say a year the value of the share would have risen to say N12 per share (being moderate), his investment would have become N2,400,000(142%) making a profit of N720,000(42%).
So it would be easier for people who have investments in developing countries to diversify some of their funds and invest in developing economies like in Nigeria's capital market during this period of recession. Now the prices on the NSE are really rock bottom. But the problem most Nigerians are facing now is the availability of cash. Everywhere seems to be tight.
Nigeria is safe to invest in but you need to determine where you put your resources into, telecommunications and agriculture are also a very good option.

Re: Is Nigeria safe to invest in?

Posted by Richard on June 15, 2009 at 02:28:26:
In Reply to: Is Nigeria safe to invest in? posted by Emeka Okafor on April 19, 2009 at 03:25:41:



In the midst of the global recession, it would be better to invest in a developing country like Nigeria than to invest in the US which may not experience any growth



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Re: Is Nigeria safe to invest in?

Posted by Sola on September 26, 2009 at 00:52:18:
In Reply to: Is Nigeria safe to invest in? posted by Emeka Okafor on April 19, 2009 at 03:25:41:



i think Nigeria is just one of the countries experiencing a slowed down economic growth rather than recession, investing in penny stocks will certainly pay. Also, investing in some of these banks that were recently released from suspension by the NSE like IB or Union bank will pay in the short time and you can sell by the time the prize stabilizes



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