Nigeria’s economy is evolving rapidly, and 2024 is proving to be a pivotal year for investors. Despite global economic challenges, Nigeria’s unique blend of young, tech-savvy entrepreneurs, a growing middle class, and government-backed initiatives are reshaping the investment landscape.
From cutting-edge fintech solutions to thriving real estate markets in emerging cities, investors are seeing impressive returns in sectors that are driving the country’s economic growth.
As more local and foreign investors look to tap into these opportunities, understanding the strategies yielding the best returns is crucial. Whether it’s leveraging the booming agriculture sector or riding the wave of renewable energy, these six investment strategies are proving to be the big winners in Nigeria’s financial markets this year.
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According to BusinessDay research, here are the six investment strategies that are paying off big in Nigeria this year, delivering impressive returns for both local and foreign investors.
1. Real estate development in emerging cities
Nigeria’s rapid urbanisation, with a rate of 52.75% in 2024, has led to soaring demand for housing and commercial real estate. While Lagos and Abuja remain prime real estate markets, emerging cities like Ibadan, Uyo, and Abeokuta are becoming attractive investment hubs.
Property prices in Lagos have seen an 18% year-on-year increase, particularly in areas like Lekki and Victoria Island. However, the housing deficit in Lagos remains significant, with an annual demand of 500,000 units and a supply of only 100,000 units.
Real estate now contributes 6.43% to Nigeria’s GDP, up from 5.92% in 2023, making it one of the most reliable sectors for investors. Affordable housing projects, especially in secondary cities, are offering rental yields of 8% to 12%, while returns on investments in newly developed areas can reach up to 30% annually.
With government initiatives focused on infrastructure development, real estate investments, particularly in affordable housing and smart city projects, are proving highly profitable.
2. Fintech and digital payments
The fintech sector in Nigeria continues to grow rapidly, driven by the country’s large unbanked population and increasing smartphone penetration. As of 2024, there are still about 38 million unbanked Nigerians, providing a significant opportunity for financial technology services.
The Nigerian fintech market has attracted $1.2 billion in funding between 2022 and 2024, with over 200 fintech startups currently in operation. Mobile payment transactions hit ₦56 trillion ($71.4 billion) in the first half of 2024, a 20% increase compared to the previous year.
Fintech firms like Flutterwave and Paystack are leading the charge, delivering high returns for early investors. With digital payments making up 70% of retail transactions, the sector continues to expand, providing significant returns for investors. Flutterwave’s recent Series D funding round raised $250 million, pushing its valuation to $3 billion.
The sector’s impressive growth trajectory makes fintech one of the most lucrative investment options in Nigeria, with returns bolstered by the rise in mobile payments and digital banking services.
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3. Agriculture and agro-tech
Agriculture remains a vital part of Nigeria’s economy, contributing more than 25% to the country’s GDP. The government’s push for self-sufficiency in food production, combined with innovations in agri-tech, is transforming the sector.
Nigeria remains the world’s largest producer of cassava, with an annual output of over 60 million metric tons. In addition, rice production has surged to 8 million metric tons, making Nigeria the second-largest producer in Africa.
The agricultural sector grew by 3.2% in the second quarter of 2024, driven by improved farming techniques, mechanisation, and government support. Agri-tech platforms like Farmcrowdy are helping to connect investors with farming operations, offering returns as high as 25% annually.
Investments in agriculture, particularly in export crops like cocoa, have proven profitable, with Nigeria earning over $700 million from cocoa exports in 2024. Agriculture continues to offer strong returns, especially for those leveraging modern farming technologies and export-oriented initiatives.
4. Renewable energy investments
Nigeria’s persistent energy deficit, with over 40% of the population still lacking access to reliable electricity, presents a significant opportunity for renewable energy investments.
Solar energy and mini-grid solutions have emerged as critical drivers of growth in the energy sector, with installations growing by 45% in 2024. The renewable energy market is expected to attract $10 billion in investments by 2030, as the demand for off-grid power solutions continues to rise.
Approximately 93 million Nigerians rely on off-grid solutions, highlighting the vast potential of renewable energy investments. Investors in solar power projects are seeing returns between 15% and 18% annually, driven by strong demand in rural and semi-urban areas.
Companies like Lumos and Resources are leading the sector, offering solar solutions to thousands of homes and businesses. The Nigerian government’s incentives and tax breaks for green energy projects are further enhancing profitability for investors in this sector.
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5. Stock market and local equities
Nigeria’s stock market has been resilient, with key sectors such as banking, telecommunications, and consumer goods driving market growth in 2024. The Nigerian Exchange Group (NGX) saw a 10.7% increase in market capitalisation this year, with telecommunications stocks performing particularly well. MTN Nigeria’s stock price, for example, rose by 25% in the first half of 2024, driven by the growing demand for data services and mobile connectivity.
In the banking sector, companies like Zenith Bank and Access Bank have delivered dividends of 12% to 15% to shareholders. The NGX All-Share Index is up by 8.9% this year, making it one of the best-performing stock markets in Africa. Local equities continue to offer investors strong dividends and capital appreciation, particularly in industries like telecommunications and consumer goods, where demand remains high.
6. Cryptocurrency and digital assets
Despite regulatory hurdles, Nigeria remains one of the world’s top markets for cryptocurrency adoption. Over 30 million Nigerians are actively trading digital assets in 2024, using cryptocurrencies as a hedge against inflation and the naira’s volatility. The country ranks second globally in peer-to-peer Bitcoin trading volume, with cryptocurrency transactions totalling $2.1 billion in the first half of 2024.
The popularity of stablecoins like USDT (Tether) has grown, with $500 million traded monthly as Nigerians look for alternatives to protect their wealth from the naira’s depreciation, which has fallen by 18% against the dollar this year. Cryptocurrency traders are realising gains of over 30% in less than a year, making digital assets a highly attractive investment avenue for those willing to navigate the regulatory landscape.
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