Business in Nigeria: 6 Industries Worth Investing In

Photo of Lagos in Nigeria

Are you looking for profitable investment opportunities in Nigeria that are not related to the oil sector? With the oil sector being such a fundamental part of the economy and accounting for up to 6.33% of the country’s GDP in the third quarter of 2022; it can be difficult to think of other thriving local industries. But they are very much present, thanks to the Nigerian government’s efforts to diversify the economy and put the country’s considerable labor force to good use.  

Discover some of Nigeria’s fastest-growing industries and what opportunities they hold for those wanting to go off the beaten track.  

1. Transport

In the third quarter of 2022, the transport and storage industry in Nigeria grew by a staggering 41.59%. Overall, the road, railway, airway, waterway, and pipeline subsectors of the Nigerian transport industry account for about 3% of the country’s GDP. While impressive, this growth can quite easily be explained. Any country’s transport sector is, effectively, a cornerstone of progress, supporting the supply chain, trade within and outside the country as well as economic progress.  Not to mention public transport – a key ingredient to a dynamic economy, whether it is by car, train, ship, or even airplane. In the past and even now, some investors have shied away from investment in non-oil industries in Nigeria, with poor infrastructure to blame – something the Nigerian government is aware of and focused on rectifying.  

Indeed, while past development in the transport sector has proved tricky, Nigeria is determined to grow its public transport infrastructure, viewing it as essential to the country’s continued growth. This includes roads, railways, as well as port and airport infrastructures. Cooperation between the public sector and private foreign actors will be of utmost necessity for the success of this project. 

With Nigeria being an African powerhouse, as well as the most populous African country, opportunities for investment in the transport and storage sector are numerous and can prove to be particularly lucrative.

Cold chain logistics

One particular area of investment in the transport industry would concern cold chain logistics. Indeed, in recent years, Nigeria has been losing its competitive edge both locally and internationally because of its inability to transport and store temperature-controlled goods (such as meat and dairy) in the right conditions. This represents an opportunity for any investor.

2. Finance & Insurance

In Q3 of 2022, the Nigerian Finance & Insurance industry experienced a growth of 12.7% — a particularly surprising development for a country that has historically seen low levels of insurance penetration, often owing to religious and cultural barriers. Despite this, the sector remains tenacious, earning more than N50 billion ($160 million) in overall investment income. The Central Bank of Nigeria is expected to maintain its strict monetary policy and the enactment of the Pension Reform Act 2014 will likely help the insurance sector maintain its projected 10% yearly average growth rate. 

In Nigeria, the 2 main types of insurance are life insurance and general insurance (housing, motor insurance, health…). Life insurance has partly picked up thanks to the National Health Insurance Authority Bill 2022, a new law that would provide health insurance coverage to some 83 million vulnerable Nigerians.

3. Information & Communication Technology

The ICT sector grew by 10.53% year-on-year in Q3 2022. 

Viewed as Africa’s most prominent ICT market, Nigeria houses a whopping 82% of the African continent’s telecom subscribers as well as 29% of internet usage. With a compound annual growth rate (CAGR) of 4.6% and an expected increase of over 167 million subscribers in the five years to come, Sub-Saharan Africa is also anticipated to experience the fastest development in the ICT industry. 

As a result, the Nigerian government is promoting collaborations between regional ICT businesses and international investors to move the economy away from oil and gas. Local authorities have backed the establishment of government- or private-sector-led incubator hubs, youth innovation initiatives, and science technology zones in order to foster these collaborations and grow a community of entrepreneurs in the technology sector. In fact, the government of Nigeria has even given Abuja Technology Village and other hubs special economic zone status, thereby allowing duty-free shipments and eliminating labor problems – all as an economic incentive to investors and business owners.

4. Art & Entertainment

The Art & Entertainment industry in Nigeria recorded a growth of 7.79% in Q3 of 2022. While the pandemic impacted the sector in 2020, it has since picked up, striking lucrative deals with international streaming giants and production houses. A report by PWC predicts that the industry will be the fastest-growing one globally in the coming 5 years.   

5. Construction

Nigeria’s construction industry is expected to expand by 3.2% yearly between 2022 and 2025 as a result of the real estate industry’s consistent expansion and government support for the infrastructure and energy industries. Supportive government programs, like the $2.7 billion Infra-Co fund, which is backed by the Central Bank of Nigeria (CBN), the Nigerian Sovereign Investment Authority (NSIA), and the Africa Finance Corporation Companies (AFCC), have drawn financiers to the sector and increased the trust of the businesses already established making construction a safe industry to invest in.  

6. Food Processing

With a population of over 213 million people, it is safe to say that the food industry offers great opportunities to investors. Over the past five years, the sector has expanded at an average rate of 3%, contributing an average of 4% annually to the GDP. Even though the industry is primarily made up of small and medium-sized businesses, new entries from international food corporations and existing operations are expanded to satisfy the needs of the local market. The increasing urban population also means that consumers are now paying more attention to their diets, a change that has triggered an interest in low-fat, low-sugar, and low-carbohydrate foods and beverages.  

 

Investors can seize the opportunity to be among the first ones to introduce foods and beverages that meet the demands of people with special dietary needs.  

How Africa HR Solutions can facilitate your entry into Nigeria

Expanding to new markets is never an easy task, and sometimes, you may just want to wait before going through the costly and time-consuming process of establishing your own local entity. What if you could legally operate in Nigeria almost right away, without the initial entity investment?  

Africa HR Solutions’ Employer of Record (EOR) solution allows you to do just that. We onboard your employees, and manage payroll and taxation as well as HR and compliance, while you are free to focus on your core mission: expansion.  

Contact us now to find out more about how our EOR solution can help you achieve your expansion goals.  

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GRANT GERAGHTY - Africa HR Team

GRANT GERAGHTY

HEAD OF CLIENT RELATIONSHIP

Grant Geraghty is the longest-serving member of the Africa HR team. This resident subject matter expert and client champion is responsible for gaining a deep understanding of our clients’ unique HR needs in Africa and providing tailored solutions that align with their business objectives. Grant collaborates closely with our clients to ensure that their requirements are properly implemented, providing ongoing support and guidance throughout the process.

Grant brings a wealth of experience to his role, having served as Africa HR’s longest-serving employee. He holds a Bachelor of Commerce degree, with a major in Economics and Business Finance, from the University of Natal in South Africa. Additionally, he has completed a certification program in Payroll and Tax Administration from the University of Cape Town, further enhancing his expertise in HR operations and compliance.

His commitment to delivering exceptional service and his extensive knowledge of HR in Africa make him an invaluable member of the Africa HR team.

KEVINA TAKOORDYAL Africa HR Team

KEVINA TAKOORDYAL

HEAD OF OPERATIONS

Kevina Takoordyal has a BA Hons Business Management from the University of Glamorgan, UK, with MBA in leadership and Innovation, MBA General, PMP Certified, and Agile Scrum Master. She currently works as the Head of Operations at Africa HR Solutions Ltd with more than 20 years of proven leadership capabilities in Operations, Business Development, People Management, Process Optimization, and Project Management in the Financial Services, BPO, Banking Industry, and Heath Care Industry. In Senior leadership roles with an international footprint across Europe working and extensive Pan- African experience from a compliance, finance, and operations angle, Kevina comes across with a panoply of cross-functional skills. Kevina also serves on a few Boards, Non-Independent Executive at MioD and for NGOs on a voluntary basis, a coach and mentor to aspiring female leaders across Africa and Mauritius.

Kevina is a firm believer in Servant Leadership with a strong focus and commitment to uplifting others, with the ability to deliver through a highly engaged – diverse team, and works towards consistently synergistic value creation. While being a focused and adaptive thinker and Kevina is actively participating in panel discussions on Innovation, CX, Digital transformation.

Kevina serves as Project Assessor for the National Youth upskilling program. She has been recognized as Global Talent in a few companies, Ceridian, and International SOS Ltd whereby she has been awarded a few scholarships and had the opportunity to be mentored by Senior Vice President in the US. Award Winner in various fields and at a national level and recognized including Super Achiever Leader Award in Africa in 2016, Awarded Africa Women Leader 2018.

VILOSHNA PACKIRY POULLE​

VILOSHNA PACKIRY POULLE

Head of Finance & Business Support

Viloshna is an experienced finance professional with 18 years of expertise in strategic financial planning, financial analysis, cash flow management, systems and controls implementation, financial reporting, and continuous process improvements. She currently serves as Head of Finance & Business Support, where she has successfully automated and leveraged the financial reporting system capabilities to ensure efficient company operations.

Viloshna’s background includes senior roles in a multinational pharmaceutical company and a large listed Mauritian conglomerate. Her meticulous attention to detail and strategic thinking have streamlined financial processes, making her a valuable addition to any finance team. Viloshna is a qualified finance professional with an FCCA qualification and an MBA, bringing valuable expertise to any organization.

In her current role, Viloshna leads the company’s Treasury and Payments function, including the fulfillment of the company’s cross-border payments into Africa. With her strong educational background and extensive experience, Viloshna consistently demonstrates her ability to optimize financial operations, minimize risks, and improve profitability. Her expertise in financial reporting and process improvements make her a valuable asset to any organization.

MARK DU PREEZ​

MARK DU PREEZ

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A qualified lawyer who joined Africa HR Solutions in July 2020, Mark Du Preez has experience working in private practice for a reputable law firm in South Africa. He also played commercially focused roles at a leading private bank, wealth management company, and outsourcing firm in South Africa and Mauritius.

Mark has played a pivotal role in Africa HR Solution’s risk mitigation strategy, which positively impacted P&L performance over the years.

He currently leads the Partnerships function of the company including relationships and oversight with in-country partners (ICPs) across Africa.

Alex Daruty - Africa HR Team

ALEX DARUTY

Head of Commercial

Alex has more than 15 years of experience in the global, strategic development of both enterprise and consumer brands in categories including technology, transport, enterprise software, entertainment, and travel.

With experience in roles on both agency and corporate side, he has worked across international brands and has led the development and execution of multi-discipline campaigns across EMEA, NORAM and Asia Pacific.

His focus is on driving meaningful business impact through brand differentiation and building high-functioning, digitally oriented, and analytically driven capabilities. He is motivated by working with, and developing dynamic people, teams, and organizations.

He leads, manages, develops and mentors the Key Account Management department, including line management responsibility for the team of Key Account Managers and Key Account Administrator who represent the Company as the primary communication link between all relevant stakeholders, including clients, third party in-country partners and internal functions.

Originally from Mauritius, he holds bachelor’s degrees in International Business, Finance and Management from the University of Nevada, Reno.