As we are rapping up 2023, everyone is making preparations for 2024, which investment should be one of the cardinals to consider. We at Business Compiler have compiled some of investment opportunities available in Nigeria and for Nigerians in the coming year and beyond.
Data by African Development Bank predicted 3.3% economic growth for Nigeria in 2024. Although this estimate was hinged on rising crude oil prices and production, there are other sectors that are expected to contribute significantly to the Nigeria’s economic growth for 2024.
The Nigerian economy is estimated to grow by 1.5% in 2021, 2.9% in 2022, and 3.3% in 2923 to 2024 according to data retrieved from the African Development Bank. This is due to a recovery in crude oil prices and production.
In as much as it's good to ave money, it's not good to keep a lot of money lying idle. Invest in profit/ interest yielding businesses or buy items/ assets like real estate, gold etc that can appreciate in value over time. If you must save money, don't save so much in naira, save in foreign currencies (dollar, Euro, Pounds). Naira is expected to devalued more in 2024. So long as Nigeria's foreign earnings don't increase, and the government continues to go for foreign loans, coupled with the global economic impacts, naira will keep losing value and headline inflation will keep increasing.
Equity market
Victor Ofili, Head of Research at Cowry Asset Management Limited says “Cowry Research expects investors to keep track and position in companies that have recently recovered from a low base revenue stream and have also boosted profitability, especially in 9M 2021” as part of investment strategy in the equity market for the year 2024.
MTN Nigeria, is most likely going to be favoured in the Nigerian equity market. Outlook for revenue growth and profit remains positive even as the telecom giant is expecting to get final approval to operate a Payment Service Bank, Momo, having gotten approval-in-principle. Due to good history of Zenith Bank in dividend payments, high dividend yield and strong business structure it remains attractive for investment.
Eurobond
The outlook on the foreign side shows a good investment opportunity in SSA Eurobond. Tapering coupled with the reversal in global dovish stance are likely to further weaken market sentiment, creating a good opportunity for SSA Eurobond. Double-digit yields is expected in Nigeria, Ghana and Angola Eurobonds. A double-digit return on a dollar investment is definitely a good bargain.
Foreign equity market would offer more opportunities in 2024 than the local equities.
The top companies to invest in the US equities market; Telecommunications (e.g. Twilio), Fintech companies (So-Fi Technologies, Upstart) and the more popular ones like Apple, Amazon, Netflix.
Some of the newly listed companies like Meta, Yahoo Finance and PubMatic at New York Stock Market offer promising high return on investment.
Nathaniel Saleh, Structured Finance Analyst at Link Group says he is shifting attention to some of his “overlooked pick from Q3 in 2022” stressing that PubMatic and Meta will lead the way.
“for my investment pick into 2024, I decided to shift focus towards some of my overlooked pick from Q3 2022 with PubMatic and Meta leading the way.”
- Meta
Meta formerly known as Facebook Inc is an American conglomerate which owns Facebook, Instagram and WhatsApp social media platforms. Meta got listed at New York Stock Market with initial public offer on October 2021. Presently one share of Meta is turning at $353.39 with a 52-week low of $333.61 and a 52-week high of $384.33, the company recorded substantial growth in the last year starting from about $333.61 one year ago gradually going all the way up to above $375.
Meta share price estimated to hit $401.93 in 2024, which is about 20% higher than the current price of $35.3.39.
With its relatively strong position over other tech companies, Meta continues to grow at a remarkable rate. In its most recent earnings call back in September 2023, the firm recorded earnings of $29 billion for the quarter which was a 35% year-on-year increase.
Yahoo finance is labelling the stock as undervalued, trading at $91.58 per share, PubMatic specifically reported a year over year revenue growth of 54%, a year over year net income growth of 117%, and a year over year adjusted EBITDA growth of 81% and saw a total of 60,000+ advertisers placing ADs on the platform.
“I think that this company has already showcased strength and competitive advantage within less than a year since its IPO. This should be a company that you keep on your watch list,” Saleh said.
- PubMatic ($PBM)
PubMatic is an advertising company that connects publishers with advertisers to enable them find the space needed to market their products, with publishers earning revenue by marketing these products through their respective platforms.
Mosope Arubayi, SSA Economist (West & Southern Africa) & Market Strategist at IC Group who spoke with Nairametric said there would be more opportunities in dollars denominated assets than in naira denominated equity assets.
“I see opportunities in dollar-denominated assets over those denominated in local EM currencies. EMs seem primed for growth, but the old challenges remain, while new ones have surfaced. Therefore, it is too early to be all-out bullish on EMs as headwinds from energy prices, regulation and COVID remain. Local EM debt may be looking attractive at this point, but with some patience, you can get better entry points next year – with the continued US Fed taper, the anticipated rise in global long-term interest rates and its attendant support of a stronger dollar that is negative for EM asset returns. So, be modest in your EM returns expectations for 2022.”
Read also: How to Invest Wisely in Stocks when the Stock Market is Hitting New Highs
FinTech & Agency Banking
Another unstoppable opportunities in Nigeria – a carryover from 2023 – is investing in financial technology (FinTech), Agency banking and mobile money. During the pandemic, banking customers were nudged in the direction of completing transaction online or via mobile devices. But even before the pandemic, a predominantly younger generation of consumers relied on mobile devices to pay for goods and services, transfer money, and trade stocks and cryptocurrencies. That trend is likely to continue in 2022.
Startups
Like Fintech, investing in startups are very rewarding because as these startups grow, your wealth grows. Where the problem is, is identifying profitable and sustainable startups. According to Forbes, 90% startups fails. So investing in startups requires due diligence.
In recent times, there has been increase in unicorns (startups worth over $1 billion) in Nigeria and Africa such as Flutterwave, Jumia, Andela, OPay, etc. Anyone who invested in these unicorns would be making incredible returns. So identifying and investing in other startups that has growth potentials would a very investment strategy in 2024 and beyond.
Agriculture
Due to high inflation, Nigerians will spend more of their incomes on food commodities. Food investment is the number one in the priorities of households. Any investment made in agriculture in Nigeria will yield huge return up two digits.
Nigeria agro export value is expected to grow by 15% in 2024. Cocoa, Cashew nuts, Sesamum seeds, Coconut, Ginger, Frozen sea foods, Brasil nuts in shell, Natural cocoa butter, Cocoa beans, Sesame oil and its fraction, Palm nuts and kernels are expected to top Nigeria agro export list as they have remain on top over the years. Here are list of best agribusiness for export in Nigeria
Read also: Top 7 Autotech Startups in Nigeria
Housing/ Real Estate
Investing in real estate in 2024 can offer potential benefits such as property appreciation, rental income, and a hedge against inflation.
According to data by National Bureau of Statistics, Nigeria's inflation rate has increased from 21 percent recorded in 2022 to 28.20 percent in November 2023, and would hit 33 percent by 2025, IMF says.
However, market conditions can vary, so it's crucial to conduct thorough research and consider factors like location, and interest rates (if you're using mortgage or bank loans) before making investment decisions.
To get a good return on investment, it is advisable for investors target more on sectors highlighted above. These sectors are well-positioned for profitability in the coming years.