Five ways to invest money in Nigeria for beginners

At the peak of the Mavrodi Mundial Moneybox (MMM) Ponzi scheme that crashed in December 2016, many Nigerians had caught the bug of quick, large returns on investment of up to 50 percent. Millions of Nigerians got their fingers burnt when the Ponzi scheme suddenly closed shop.

However, there are other reliable investment vehicles, which not promising outrageously high returns outperform Ponzi schemes in terms of consistency. This article was inspired by Ola Brown, founder of Flying Doctors.

Nigerian Stock Exchange

The Nigerian Stock Exchange is a place to consider when searching for where to put some money. Make stocks part of your portfolio.

A stock is a unit of the share of a company that is traded on the floor of the Nigerian Stock Exchange (NSE). It is also often referred to as a share. Every company has shares which the owners lay claim to. When you go to register a company at the Corporate Affairs Commission (CAC) you typically say your authorised share capital is N1m made up of 1m ordinary shares of N1 each.

This means your initial capital at the start of your company is N1million represented by those shares. Whilst the value of your capital may increase over time, your shares remain the same till you decide to increase it again and register the same with the CAC. When the shares are listed on the floor of the NSE they are tradable as stocks meaning people can buy or sell them.

Divide your investments into long term investments and speculative investments when trading on the NSE.

The better you are at understanding a company’s annual report, market conditions and growth trajectory; the better you will be at trading.

Treasury Bills

Treasury Bills are short-term debt instruments issued by the Federal Government through the Central Bank to provide short term funding for the government. They are by nature, the most liquid money market securities and are backed by the guarantee of the Federal Government.

They are usually issued for tenors of 91 days, 182 days and 364 days at the primary market auction held fortnightly by the Central Bank of Nigeria. The interest rate (stop rate) at the auction is not fixed but fluctuates based on demand and amount offered by the apex bank.

You do not pay tax on treasury bills and yield is normally higher when compared to fixed deposit. But they are harder to get rid of than fixed deposit if you need the money back before the maturity period.

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Fixed Deposits

A fixed deposit is a type of short-term financial investment sold by banks to its depositors. A depositor invests in a fixed deposit when he deposits his money with a bank in exchange for interest for a predetermined period.

Fixed deposits can often be for one month, three months, six months and one year. In return for fixing your money with the bank for a fixed period, the interest paid on fixed deposits is always higher than the interest that the bank pays on a regular deposit. Fixed deposits can be done in naira or dollars, unlike treasury bills.

Fixed deposits are also available from your bank. Make sure you shop around as rates can differ drastically from one bank to another.

Minimum investment the amount for FD and T-bills is usually about N50K to N500K depending on where you are buying from.


Eurobonds are dollar-denominated longer-term investments with maturity periods of about five years. Interest rates are generally higher than fixed deposits offered by the banks.

Money market funds

A Money Market Fund (MMF) is an open-ended fund that provides financial help and a steady stream of income by investing in high quality, short term Money Market Instruments. These include bankers’ acceptances, certificates of deposits, commercial papers, and collateralised repurchase agreements. You can also invest in government securities. These include Treasury bills.

Developing a habit of saving and investing is important. If you do not earn much and you can barely pay your bills, the idea of saving money might seem laughable. But everyone has to start somewhere! If you work hard at saving, your financial situation is likely to improve over time.

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