Open Session: Where Should I Put My Naira Now?

“Once upon a time

Them tell us say one Dollar is equal to one Naira

Once upon a time

You fit travel from Lagos to London with no visa

Shey na like this we go dey dey?”

– Wande Coal

In the face of rising inflation and currency devaluation, returns on conventional asset classes like treasury bills and bonds no longer appear attractive, particularly because of the fear of negative real returns. So, it’s become more important than ever, to be very intentional and strategic about our investments in order to avoid loss of value. If you’ve been wondering where to put your Naira, worry no more, this article’s gotcha. Bear in mind sha, this is not what? Not financial advice. Oya Leggooo.

AGRICULTURE

Recall that in 2019, the Minister of Agriculture legit told Nigerian youths to go and farm before seeking political positions. Funny, no? Little did we know that Baba was dropping bars. According to the Nigerian Investment Promotion Commission (NIPC), the agricultural sector contributes 25% of Nigeria’s Gross Domestic Product (GDP) and its growth rate over the last five years has averaged 4%. In other news, our agricultural sector holds some good investment prospects.

To invest in agriculture, you don’t necessarily need to carry hoe and cutlass to farm, although there’s nothing wrong with that. One of the easiest ways is to invest in agricultural ventures, businesses, or farm projects. There are agricultural platforms such as CrowdyVest, Farmsby, and Thrive Agric that allow individuals to invest as low as 5,000 Naira in farming projects and get returns as high as 20% or even more. 

REAL ESTATE

The real estate sector is another sector you can put your Naira in. Real estate investments involve the purchase, ownership, management, rental, or sale of real estate for the sole purpose of making profits. The Nigerian population keeps growing at an exponential rate and frankly, there’s an infrastructural deficit in the county. As a result, there’s an outsize demand for property, particularly in urban areas like Lagos, Abuja and Port-Harcourt. Investing in real estate can yield higher returns over a long period of time as opposed to investing in other asset classes.However, it is most times best suited for high-income earners as real estate investment is capital intensive.

 The most common way to invest in real estate is to become the landlord of a rental property. On the other hand, if you do not want to go through the hassle of buying and managing several properties by yourself, a Real Estate Investment Company (REIC)  might be the solution for you. REICs buy properties and resell them to investors. They also manage the properties and find tenants for investors in exchange for a percentage of the monthly rent.  

FOREIGN STOCKS

Nigeria is home to some of the most innovative fintech startups in Africa and one of the amazing solutions the industry has birthed is the ability to invest in foreign stocks as a Nigerian living in Nigeria. Apparently, all you need is a smartphone and internet access. Apps like Bamboo, Chaka, and Trove grant you access to stocks listed on the New York Stock Exchange and you can buy stocks on these apps for as low as $10-$20.

But, remember that investing in stocks is quite risky because stocks are volatile. In countries like the US,  there’s no limit to how much you can gain or lose in a trading day. Please do well to research and analyse a company before putting your money in their stocks. Another upside to investing in foreign stocks is that you’re automatically protecting your Naira by converting it to Dollars to invest. So in the event that the Naira gets devalued over the investment period, your Dollars will likely still be more valuable and you can make some extra cash when you sell your stock.

CRYPTOCURRENCIES

This one is quite controversial because of the Central Bank’s attempt to ban crypto trading in Nigeria. However, this article literally won’t be complete without the mention of crypto because it’s another alternative asset class you can tap into . A cryptocurrency is a digital asset or currency used as a medium of exchange, but it does not exist in a physical form and it is not issued by a central authority. Some popular cryptocurrencies include Bitcoin and Ethereum.

You can buy or sell these currencies via apps like Binance or Coinbase. Cryptocurrencies are also very volatile and very high risk, so please tread carefully, study and  do your research before diving in.

COMMODITIES

Commodities are basically goods that are tradeable. In investment terms, there are some commodities that are listed and traded at the floor of an exchange. Examples of such commodities include metals like gold, and materials like crude oil. Commodities can be another way to hedge your funds against devaluation and also diversify your portfolio. In Nigeria, you can buy and sell commodities via the AFEX Commodities Exchange and they have an app, so you can trade from the comfort of your home.

Well, , there you have it, some of the alternative ways to invest your naira and earn amazing returns. Don’t say we didn’t do anything for you. Cheers!

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