Top Profitable Investment in Nigeria in 2022/23

Investments are essential if you want to increase your assets and catch up with the rate of inflation. Cash loses purchasing power over time as a result of inflation. Therefore, if you haven't invested in a worthwhile instrument, your monthly salary or business savings may be losing value every day.

In Nigeria, there are numerous financial marketplaces and investment opportunities. Every instrument has a unique set of risks and rewards and suits different types of investors. Here, we look at the best investment opportunities with the highest returns in Nigeria.

1.     Real Estate Investment

One of the main ways to generate consistent income streams is through real estate investing. While real estate investing in Nigeria presents a plethora of chances to increase wealth and financial security, there are many pitfalls that may restrict how much you may earn. Therefore, it is necessary to do thorough research into the sector before investing.

The management, ownership, acquisition, purchase, rental, and/or sale of a property for profit constitute a real estate investment. Although there are numerous real estate investment strategies, they all rely on the same economic conditions to be profitable. The property's worth must rise as the primary factor. Additionally, the expenditures of owning and maintaining the property cannot be greater than its increasing value.

There are diverse kinds of investment portfolio, and wise investors base their decision on whether they are looking for profits in the short or long term. The practice of purchasing a property and selling it rapidly (often known as "flipping") is referred to as fast turn investing. Purchasing a property for long-term rental or lease and earning income from both the rent and the property's rising value is known as long-term investing.

Despite the country's present economic crisis, the real estate industry is currently growing in Nigeria and making people millions in returns.

2.     Bank Investment

The Nigerian banking industry is loaded with prospects that many persons have been unable to take advantage of. The most amazing thing is how many different avenues there are to invest in the banking industry. They are so varied that you may just go to a bank to invest and leave with a fairly balanced portfolio.

The primary method of bank investment is through savings accounts. Saving money in your savings account allows you to set money aside while also earning interest that, depending on the bank, may be as high as 4%. A savings account is an excellent way to accumulate your money for more sophisticated kinds of investment, even though 4% is well below the inflation rate and will eventually result in you losing value over the long run.

Choosing fixed deposits is another excellent approach to invest your money while saving money. A financial product offered by banks called a fixed deposit pays out more interest than a savings account does.

You can invest in mutual funds offered by banks as well. The process of gathering investments from interested persons or groups and investing the entire pool of funds in ventures that will generate returns for the investors can be tailored to specific investment goals.

Benefits like economies of scale and the capacity to invest in much larger assets are made possible by having a pool of funds.

Nigerian investment banks are committed to providing a seamless mix of traditional and digital products and services. They are tasked with releasing new securities for businesses such as bonds and shares, available to both private and public organizations.  In order to charge investors a higher premium, the bank may purchase the full issuance of securities.

Investment banks also provide funding for large-scale projects in the oil and gas, transportation, manufacturing, infrastructure, agricultural, and other sectors. They provide financing for mergers and acquisitions, as well as assisting government organizations in closing the tax gap, amongst others.

3.     Cryptocurrency/Blockchain Investment

After South Africa, Nigeria has the second-largest market. South Africans use cryptocurrency mostly for alternative investments, whilst Nigerians use it primarily for savings.

The market size is expected to increase from USD 228 million in 2020 to USD 703 million by 2025, at a Compound Annual Growth Rate (CAGR) of 25.3% over the forecast period, according to a new analysis titled "Blockchain AI Market Global Forecast to 2025".

There are more than 17,000 cryptocurrencies to select from, and there are 462 exchanges to choose from if you want to learn how to invest in cryptocurrencies in Nigeria.

The fact that cryptocurrencies provide people with better control over their money is one of its major characteristics. When money is kept in a bank, the bank itself becomes the centralized authority over that money. The bank is free to use the funds anyway they see fit, which is typically lending or investing them. However, because cryptocurrency storage is decentralized, if you keep your crypto assets in a crypto wallet, only you can access them.

Some of the finest cryptocurrencies to invest in have algorithms that purposefully burn coins to raise their value. Anyhow, when studying how to invest in cryptocurrencies in Nigeria, some people might take the deflationary characteristics of a token into account.

Many cryptocurrencies have seen price increases of double or thrice in just a few days or weeks. For those who understand how to invest in cryptocurrencies using the best cryptocurrency to invest in over the long run, these enormous profits are in store. How much you actually gain or risk will vary depending on what cryptocurrency to invest in and discovering good crypto currencies to invest in.

4.     Bonds Investment

Similar to bank loans, bonds are issued as debt by firms, municipalities, states, and the federal government. These bonds entail monthly interest payments to investors throughout the course of the bond's life as well as repayment of the principle when the bond matures.  Bond prices are frequently influenced by interest rate movements, among others.

Current interest rates affect the cost of an existing bond. The price of the bond decreases when rates rise because it is no longer as appealing as other bonds in the market. As rates decline, the price of the existing bond rises because it is now more desirable (i.e., offers higher interest rates) in comparison to other options. The price changes in reaction to the perceived risk associated with the individual organization's debt.

Nigerian bonds are attractive to cautious investors because they are seen as safe investments. Regardless of whether the stock market becomes erratic, bonds can still provide these people with a reliable source of income.

Bonds are not, however, risk-free. Bonds can also carry a significant level of risk. In Nigeria, there are various bond types that give investors various choices. For instance, some bonds include an early redemption option, while others can be exchanged for stock in a corporation. The specific degrees of risk associated with bonds can be determined by their credit rating.

5.     Stock Market Investment

The Nigerian Exchange Limited (NGX) runs a fair, orderly, and transparent market that attracts the greatest investors and African businesses from across the world. Investors can buy securities directly from issuers on the main market when they make new offerings, or they can trade in already-listed securities on our secondary market platform.

An investor must designate a securities dealer or stockbroker who is a registered Trading License Holder of NGX to handle account opening and trading in order to buy securities in the primary or secondary market. Investors must present their dealers with documentation that satisfies the regulatory Know-Your-Client (KYC) criteria as specified by your dealer/stockbroker in order to open trading accounts.

In stock trading, shares are purchased and sold on a stock exchange in the hope that they will increase in value. A share investment is the long-term purchase and holding of shares.

The most popular method of trading stocks involves traders who purchase shares at a discount and then sell them at a premium, frequently on the same day. These traders, known as day traders, rely on minute fluctuations in stock prices to generate modest profits that compound over a number of instruments.

The secondary market, or stock exchanges, is where all publicly traded company shares are listed. Exchanges function to connect merchants on the exchange with possible buyers.

6.     Oil and Gas Investment

The oil and gas sector in Nigeria contributes 10% to its 402 billion USD GDP, the largest in Africa. Notwithstanding petroleum's relatively small GDP contribution, it accounts for 86% of export earnings and 50% of government revenue. The mainstay of the country's economy continues to be oil.

With the advent of the forthcoming Dangote Refinery, Nigeria is on the verge of revolutionizing the supply dynamics of refined crude oil products across the region, and it is anticipated that it would become the refining centre in the country and continent at large.  Nigeria intends to establish itself as Africa's center for refineries after completion. The country's downstream market is thus anticipated to draw interest from overseas companies, opening up a number of chances.

Due to the nation's vast natural gas deposits and its benefit as a clean fuel, increased investments in natural gas infrastructure are anticipated to boost the market throughout the forecast period.

The Nigeria Investment Promotion Commission estimates that the nation now produces an average of 2,000 billion standard cubic feet (BSCF) of natural gas annually, of which 70% is used and 30% is still flared. The Federal Government has launched a complete and integrated gas utilization grand plan, including the building of liquefied natural gas (LNG) facilities and independent power plants, to ensure zero percent gas flaring (IPP). As a result, domestic gas usage has increased. To enable flexible distribution structures of high-quality gas across significant industrial plants and dwellings, significant gas grid infrastructure is being created.