Thirteen industries in Nigeria have been identified as the top industries to watch out for in 2023 due to the tendency they have to provide opportunities to the surging population of the country.
This is according to Nairametrics Founder, Ugo Obi-Chukwu. He said this during his presentation at the Nairametrics Economic Outlook webinar, held on Saturday, February 4.
These industries include; Agriculture, Renewables, Transport, Security, Telecomms, Data/Artificial Intelligence (AI)/Cloud Computing, Vocational and Education, Fintech, Infrastructure, Entertainment, Trade (e-Commerce/Hybrids), Fast Moving Consumer Goods (FMCG), and Real Estate.
During his presentation, Mr. Obi-Chukwu said that although Nigeria faces a tough business environment in 2023 due to rising inflation, currency depreciation, and other factors, there are still opportunities that Nigerians can tap into in these highlighted industries.
According to him, past government intervention funds have helped to stimulate agricultural and power sector businesses across the value chains. This has resulted in increased investments in both sectors.
Renewable energy: It is instructive to note that past government intervention funds have helped stimulate investments in renewable energy. The Nigerian government in collaboration with partners like the World Bank, the African Development Bank (AfDB), the European Union, and the Bank of Industry (BoI) has contributed to renewable energy growth in Nigeria. The partners have been able to work together through initiatives like the Rural Electrification Agency (REA), which facilitated a €9.3 million deal with solar mini-grid developers to develop projects in unserved areas in 2021.
- Nairametrics has previously reported that the BoI Solar Energy Fund which was first launched in 2017 in the form of a N1 billion fund for micro, small, and medium enterprises (SMEs) has been increased to N6 billion.
- The target market for the BoI fund now includes households and businesses (agribusiness, solid minerals, artisans, service and hospitality industries), project developers (providing solar solutions for residential estates, educational facilities, and healthcare facilities), and deposit money banks (DMBs)/micro-finance banks (MFBs).
Also, in December 2022, the Federal Government and US-based renewable energy company, Sun Africa, signed an agreement for the engineering, procurement, and construction (EPC) of 5,000 MW of solar generation and 2,500 megawatts per hour (MW/h) of battery energy storage power plants. The power plants will be located across the country’s six geopolitical zones and will help provide clean and affordable electricity to over 30 million people.
Agriculture: Government intervention funds have also increased investments in Nigeria’s agricultural sector. During his presentation, Mr. Obi-Chukwu looked at the differences in the sectoral distribution of credit between December 2015 and September 2022 in Nigeria’s industries.
- According to him, there is a 172% rise between 2015 and 2022 in the agricultural sector – N610 billion in 2015 and N1.66 trillion in 2022.
- This shows that Nigeria has recorded increased growth in its agricultural sector.
- This was further solidified in Mr. Obi – Chukwu’s data presentation showing crop production at N40.6 trillion in 2022, trailing 12 months (TTM).
Nairametrics earlier reported that the Buhari administration has invested heavily in agriculture since 2015. In June 2022, Nigeria’s finance minister, Dr. Zainab Ahmed said the agricultural sector is important to the Federal Government and investments in the sector were aimed at increasing output in the entire value chain to meet the country’s demand for food, export, and employment.
In November 2022, Nairametrics also reported that between September and October 2022, under the Anchor Borrowers’ Programme (ABP), the Central Bank of Nigeria (CBN) disbursed N41.02 billion to several agricultural projects.
- The cumulative disbursement under the ABP amounted to N1.07 trillion to over 4.6 million smallholder farmers cultivating 21 commodities across the country.
- The Bank also disbursed N300 million to finance large-scale agricultural projects under the Commercial Agriculture Credit Scheme (CACS), bringing the cumulative disbursement to N745.31 billion.
Transport: In November 2022, Nigeria’s road transport sector, which accounts for 83.6% of the total sector expanded by 49.68% year-on-year, higher than the 21.11% recorded in the corresponding period of 2021.
- Meanwhile, the water transport sub-sector expanded by 19.48%, an uptick from the 3.02% growth recorded in Q2 2022. Air transport grew by 14.58%, and transport services expanded by 6.66%.
Security: According to Mr. Obi-Chukwu, the challenge of insecurity in the country creates an opportunity for security companies to tap into closing security gaps both for the public and private sectors.
- In November 2022, the Nigerian think-tank, Agora Policy recommended the use of private security contractors in a specified and controlled manner to close security gaps in the country.
- These contractors must have clear objectives and measurement parameters to be monitored closely
Telecoms: There are many opportunities in Nigeria’s telecoms sector, as the market is large and diverse, with consumers’ needs going beyond several aspects of the market due to an increased digitalized economy.
- According to Mr. Obi-Chukwu, talent globalization is to be expected in 2023. Following this, there will be an increased need for more reliance on the telecoms sector.
Data/Artificial Intelligence (AI)/Cloud Computing: Nigerians are showing a rising interest in data and artificial intelligence.
- This interest will create business opportunities in 2023 and beyond.
- Nairametrics had earlier reported that Google search interest in “artificial intelligence” reached a record high in 2022 in Nigeria.
- AI businesses can provide AI-powered assistance for sustainable farming practitioners in Nigeria.
- Businesses can also tackle information technology issues using AI.
Vocational and Education: Nigerians are interested in learning more to be a part of the fourth industrial revolution. This need can provide opportunities for stakeholders in education. As of October 2022, Nigeria’s balance of payment report showed that Nigerians spent a sum of $11.6 billion (N5 trillion) on foreign education between 2019 and 2022.
However, the educational system is still lacking in critical infrastructure, manpower, and up-to-date curricula. These are gaps that can be filled in person and online by educators in the country.
Fintech: According to Mr. Obi-Chukwu’s presentation, the general services sector which fintech is a part of has seen a 211% increase in the sectorial distribution of credit between December 2015 and September 2022.
- This increase shows that there is more participation in the sector, which can only grow further as the population expands and more Nigerians increase their knowledge of technology.
- Nairametrics recently reported that the Chief Executive Officer of the Ham Institute of Cyber Security, Hanniel Jafaru, said that the fintech business in Nigeria is set to take a giant leap in 2023 because of the cashless policy the Central Bank of Nigeria (CBN) is trying to implement.
- He emphasized that due to the cash withdrawal limit that comes with the policy, most persons will begin to look at the possibility of using fintech services to carry out their transactions.
Real Estate: Although rent will likely increase in 2023 due to inflation rates, according to projections made by Mr. Obi-Chukwu during his presentation, there are still opportunities in Nigeria’s real estate sector.
- According to the Chief Commercial Officer at Mixta Africa, Rolake Akinkugbe-Filani, some innovative ways for owning real estate in the country have emerged.
- One of these innovative pathways is fractional ownership. She also made reference to realistic payment plans that many Nigerians can afford.
For the record: In 2023, Nigerians can also tap into opportunities in the following sectors; Infrastructure, Entertainment, Trade (e-Commerce/Hybrid), and Fast-Moving Consumer Goods (FMCG).
You may watch a recording of the Nairametrics Economic Outlook on YouTube below.