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Sunday, November 10, 2013

SOME MAJOR INVESTMENT OPPORTUNITIES IN NORTHERN PART OF NIGERIA




What Dangote, Shoprite, and Chinese civil engineering giants have in common…

   In recent time the only main story coming from the north is that of Boko Haram obliterating all other sources of potential positive news. This is not surprising looking at the preoccupation of the media industry the world over, that feeds on bad news such as war and natural disasters. Thus, both local and international media has been concerned with only Boko Haram as no any other thing coming from the North is worth reporting. Though, there is some element of true that (world wide) where there is war and other civil disturbances positive activities in other spheres of live slow down or cease to continue. That notwithstanding there are some positives things going on in the north, after all who says Boko Haram activities have not been reduced in the last one year which is a credit to the regime in power. Apart from that is this insecurity problem not restricted to a particular corner of the vast region that constitute more than two-third of the land area of Nigeria? 

                                                        Obajana cement plant, Kogi state
                                                                          
   Before I start to mention these investments opportunities I will start with the giant investment strides Alhaji Aliko Dangote is making in the region (who is currently one of the richest people in the world) that runs into billions of Dollars. In Sokoto and Kebbi state alone he plan to invest money worth 871.3 million Euros in building four sugar plants over an area of 120,000 hectares. Another sugar plant is to be built in Kwara state another northern state. Already Dangote own Savanna sugar factory in Numan Adamawa state after purchasing it from the federal government. His plan is to replicate what he did in the cement industry in sugar business, making the area one of his major sources of wealth. Other states in the North that are hoping for the billionaire to come and invest in their sugar industry include Jigawa, Yobe and Bauchi states. Dangote plan to turn Nigeria into a big sugar exporter worldwide in the next coming years with these investments in the north.
   Agriculture is one vast area that any substantial investment in it is bound to generate a good turnover. Already state such as Kwara and Taraba have invited foreign investors who have put their money in the area. The fact that billionaires such as Dangote, Abdus Samad Rabiu and Mutallab have put their money into the sector is a positive indicator of the potential of the sector. According to estimates from the Central Bank of Nigeria, agriculture (despite the underinvestment in the sector) contributed nearly half of the GDP of Nigeria. In the retail business already South African companies such as Shoprite have been rushing to open shops in Northern states with two in Kwara and Kano and more states coming up. With the vast population of the region and growing rank of middle class modern retailing is an area worth investing in in the North. For a start an investor should consider retail business in these state capitals, Kano, Kaduna, Ilorin, Sokoto, Maiduguri, Minna, Jos, Yola, and Bauchi; the reasons for chosen these places are size of middle class, level of infrastructures, and their socioeconomic compositions.
   Real estate is an area that is suffering from growing lack of investment and any investor that is wise enough to notice this opportunity and creatively utilize it will reap the benefit of good returns on his money. Unlike Lagos in the South where there is growing investment in the real estate sector, in the north the only state that commercial real estate business is rapidly growing up is Kano followed by Kaduna. Chinese have so far discovered the opportunities in the Civil engineering business in the North, a lot of road constructions, building and other civil engineering works in the north are now been awarded to these Chinese companies. Because of the growing demands for modern infrastructures in the region the market for civil engineering in the region is bound to continue growing in double digit for a long time to come. 



    States such as Zamfara, Gombe, and Niger have been keen on inviting foreign investors to invest in the vast mineral deposit that nature endowed them with. Already Chinese investors have invested substantial amount of money in gold processing in Zamfara. There is still large untapped deposit of limestone (use in making cement) in many parts of the region just like Dangote found out with his investment in Kogi state. Islamic finance is an area worth investing; northern region has the most concentration of Muslim faithful of any region of West Africa. This, naturally, mean a vast market for Islamic finance particularly Islamic Banking products; currently there is only one financial institution that serve this large market, any investor wise enough to see this potential and make arrangements for tapping it will benefit from its untapped wealth. Kano alone needs such products as Musharakah, Mudarabah, Ijarah, etc, to finance the businesses of it inhabitants who make their living out of trade for hundreds of years.

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