Where to Invest 100 Million Naira
Three investment experts share views on where Nigerians should put their money now.
Nigeria’s benchmark stocks gauge is trading at a record, surpassing the 100 trillion-naira ($72 billion) mark in early February for the first time as difficult reforms are starting to bear fruit, boosting sentiment.
The index is already up 35% in dollar terms this year, the best performer globally after Ghana and Oman’s gauges despite the turmoil caused by the Iran war. This builds on last year’s 62% surge that was more than three times the S&P 500’s 16% advance in the same period.
Local fixed-income funds are delivering yields of as much as 25%, significantly higher than most emerging markets.
Optimism has increased due to economic reforms undertaken by President Bola Tinubu since he took office in 2023 and the orthodox monetary policy pursued by central bank Governor Olayemi Cardoso. The changes – which included a devaluation of the local currency – have started to bring Nigerian inflation under control, stabilized the monetary unit, and spurred investment in the oil, gas and agricultural sectors.
Economists expect the benchmark interest rate – currently at 26.5% – could decline this year as inflation cools.
But as the country prepares for another election next year, almost half the population still lives in extreme poverty. Firms struggle with erratic power supply, and the northern regions are plagued by insecurity. US airstrikes against Islamic State militants in December failed to quell kidnappings and killings, which are ravaging new locations and threatening more livelihoods and investments.
Despite the challenges, Africa’s most populous nation and the continent’s top oil producer is starting to see some green shoots.
For equity markets, the highlight will be the listing of billionaire Aliko Dangote’s refinery and fertilizer businesses, slated for this year.
Amid these trends, Bloomberg asked three local financial experts where Nigerians should invest 100 million naira – about $72,000. We also asked each of them for a less conventional take on how they would spend the funds — a blue-sky play.