A number of people are often unsure, afraid and sceptical about where to invest their money in Nigeria that will ensure rewarding returns and safety of their funds.

There are a number of safe and rewarding outlets to invest your money in Nigeria in 2020. These are enumerated below:

1.Treasury Bills

Treasury Bills are short term government guaranteed debt instrument issued at a discounted price and redeemed at par. It is issued on behalf of the Federal Govt by the Central Bank of Nigeria.

Investment in Treasury Bills is the safest and most risk free investment option in Nigeria.

  • Tenor ranges from 91days to 365days.
  • They are sold in a bi- weekly auction conducted by the CBN
  • They are by nature the most liquid money market instrument backed by the guarantee of the Federal Govt of Nigeria.
  • No interest is paid on Treasury Bills rather you buy at a discounted price which is a price less than the face value and it is redeemed at par which is the 100% face value.
  • However, from November 29, 2019, the CBN has stopped the sale of Treasury Bills to individuals and small firms. Only big corporate organization would be allowed to do buy Treasury Bills.

2. Bank Deposits

Investment in Bank deposits can be in the following forms:

  • A Savings Account which pays interest of between 1%-3% p.a.
  • Fixed Deposit Accounts: This could be 30days, 60days, 90days, 180days and 360days fixed deposits. Interest rate could go as high as 8-10%p.a. However interest rate on fixed deposit is currently between 1%-3% because of the restrictions placed on Treasury Bills purchase by individual and small firms. This has led to huge liquidity with banks thereby crashing deposit interest rates.
3.   FGN Savings Bond.
This is a debt instrument issued by the Debt Management Office (DMO) on behalf of the Nigerian Govt.                The bond is tailored and targeted at the retail investors and ordinary Nigerians of all income groups to give them the opportunity to earn an income through savings and investing, and also to promote savings culture of Nigerians.
  • Investment is between N5,000 and N50,000,000 maximum.
  • Tenor is for 2 and 3 years
  • Interest rate can reach up 13%p.a which most often is more than interest paid by commercial banks on savings.
  • Interest is paid quartely while the principal is paid at maturity.
  • The bond is risk free and safe and is backed by the full faith and credit of the Federal Govt (Federal Govt hardly default so you are sure of getting back your money in full plus the interest).
  • The interest from the bond is tax free.
  • FGN Savings Bond can be used as collateral to get a loan from commercial and microfinance banks.
  • Investing in the bond is a good way to save towards important occasions or projects such as weddings, School fees, housing projects or retirement.
  • The FGN Savings Bond is issued monthly through offer for subscription, and can be bought from any of the approved Stockbrokers. The subscription attracts no fees or charges.
  • The bond can be sold at the secondary market before maturity to raise cash for urgent needs.
  • FGN Savings Bond is different from Treasury Bills because it has a longer tenor of 2 and 3 years while Treasury Bills has tenors of 91days and 365days.
  • Treasury bills cannot be traded on the Stock Exchange, and interest is paid upfront in the form of a discount. Interest on FGN Savings Bond is paid at the end of each quarter and the bond can be traded on the secondary market of the Stock Exchange.
  • Treasury Bills is no longer available for retail investors while FGN Savings Bond is mainly for the retail investors with minimum investment amount of N5,000, and subsequent purchases in multiples of N1,000.

4. Shares and Stocks.

Investment in Shares and Stocks can be done in 2 ways:

  • Primary Offerings such as Initial Public Offerings (IPO).
  • Secondary Offerings which is the sales and purchases of existing shares or listed shares at the secondary market of the Stock Exchange.

Returns from investment in Shares and Stocks are in the form of:

  • Dividends
  • Bonuses
  • Capital appreciation ( Share price appreciation).

5. Investment in Real Estate.

The I opportunities in the real estate sector of the Nigerian economy is enormous and diverse. Real estate as an investment offers greater rewards and could bring in huge returns more than just buying a dream home for you and your family.

The various options in real estate investment is examined below:

a) Investing in Rental Properties.

Here you buy a property or properties and then rent out to tenants. This gives you fixed rental income yearly or monthly. Rental properties could be residential, commercial or industrial properties. Also properties appreciate over time so also do the rent received on the property, and this leaves you with a more valuable asset over time.

b) Buying of Land And Re-Selling.

Buying of land and Re-Selling for a profit is one of the smartest real estate investment, and it requires little or no efforts whatsoever. You can start with buying just one plot and grow to buying tons of plots and acres of land, and selling when the price appreciate.

c) Property Development.

This involves acquiring land in viable locations, developing them into luxury apartments, single unit apartments or commercial structures and selling at a high profit margin.

d) Off-Plan Properties.

Off-plan properties are properties bought from a property developer before the property is built and completed. They are normally characterized by an initial down payment by the buyer to secure the property, and subsequent periodic instalment payment. The finished/ completed property is delivered to the buyer after payment of the final instalment. Properties offered on Off Plan are always at a cheaper price and such properties will then be sold off at very high margin/profit when the property is finally completed and delivered.

e) Shell/Carcass Properties.

These are properties sold half completed and at the skeletal level. The basic structures and the block work has already been put up by the developer leaving the buyer to do the finishing according to his or her taste and resources. This will normally includes: the windows, electrical fitings, bathware and toilet ware installation, doors, wardrobe, kitchen cabinets, painting etc.

Once you buy a Carcass/Shell structure, you already own a home or an investment. You can take your time to complete it to your taste, or you can hold on to it for a few years and sell at a profit.

f) Buying old properties: Renovating redesigning and selling at very high profit.

Whichever is your desired investment option from the above list, we are here to help you achieve your goals . Kindly reach us on any of our contact information or drop your message and contact information in our enquiry page and we’ll contact you.