Where to put your money in 2016 – Experts

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  • Investment pendulum not predictable – Critics 
  • It’s a brighter year for all – FG

Despite the glaring uncertainties surrounding global markets, economic experts are optimistic that the Nigerian economy will gain increased confidence of both local and international investors in 2016.

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Considering the performance of the economy in 2015, and the positive forecast for 2016, activities in many sectors may improve in the new year.

Gross Domestic Product grew from 2.64 to 2.87 per cent, despite the consistent fall in the price of crude oil at the global market, while this year’s projection of 6.5 per cent growth, when compared with the global economic growth projection of 2.8 per cent, will still give investors in the country fantastic returns this year.

Banking on a possible carry-over of last year’s slow but steady growth rate of the economy and commitment of the Federal Government towards developing the non-oil sectors, both economic and investment analysts are convinced that the new year may be very rewarding for investors that are ready to invest in certain sectors.

The question, therefore, is, which sectors hold the highest prospects of return on investments?

With a population of over 180 million, an economist cum analyst, based in the United States of America, Miss Bunmi Adeyemi, said that there was an acute shortage of essential products and services, which represented veritable investment platforms all across major sectors of the economy.

AGRICULTURE SECTOR 

Adeyemi believes that the agriculture sector offers high prospects in terms of return on investment, being the sector with the largest contribution; having contributed 40 per cent to the country’s GDP in 2015.

“The sector will be an investment hotspot this year. This is not unconnected with the initiatives implemented by the immediate past government in previous years to boost agriculture and agro-allied industrial activities, which focused on the business of agriculture as against traditional production,” she said.

POWER SECTOR 

The sector is potentially a profitable platform for investors in the new year. But how it will play out, experts say, depends largely on the government. The big power supply gap, power and tariff structure reforms are fuelling optimism in the sector.

The Chief Executive Officer, Hi-tech Power Systems, Mr. Seun Adebajo, said only about 40 per cent of the Nigerian population had access to power, noting that this meant that investors should explore several untapped potentials in the sector.

“Full regulation and stricter supervision of the sector will open up opportunities for serious minded investors in the sector. The power sector will be lucrative in 2016 and it will be a major sector that will move forward, because I expect more foreign direct investors to move in,” he said.

PROPERTY 

Though the real estate sector has traditionally been investors’ delight, industry players insist that 2016 holds better prospects for investors due to the expected massive infrastructure upgrade across the country.

Improvement in power supply in places perviously without power and new roads in many communities have thrown up fresh investment opportunities in real estate as the value of properties have skyrocketed.

In Lagos, Port Harcourt and Abuja, the demand for property is higher, leading to projections that investors will earn high returns on building residential structures as well as office accommodation.

The Managing Director, Lordwingate, a real estate firm, Mr. Uche Ajaere, explained that the Lagos–Ibadan Expressway and Lekki, where several companies had relocated, were major property hotspots in Lagos.

“CBN"

“Builders should understand that residential property is in high demand in the country, owing to the fact that demand far exceeds supply. Before now, Port Harcourt was a no-go area, especially for expatriates, due to the activities of militants. But now, people are returning to the area and houses and offices are in hot demand,” Ajaere told The Point.

TELECOMS/ICT 

With the exploits of telecommunications and information technology companies in Nigeria, it is hardly imagined that there will still be room for fresh investments. But experts insist the sector can still accommodate new entrants.

Founder, Mobility Mobile and Web Solutions, Mr. Yomi Adegboye, explained that the Nigerian telecoms/ ICT industry, comprising hardware, software and communications, remained a high yielding sector for prospective local and foreign investors.

In 2015, activities in the telecoms sector were believed to have contributed largely to the current GDP growth rate. For instance, in the last three years, private investment including FDIs into the telecoms sector increased significantly from about $25 billion in 2012 to about $60 billion by mid-2015. The $35 billion FDI increase represents over 150 per cent growth.

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