Nigerians in Diaspora - Real estate or Nigerian Stocks Investment?

Nigeria has a good number of citizens living and working abroad (in diaspora) and the number keeps increasing. Every day many individuals and families pray and look for every available means to travel abroad in search for greener pastures. Of course, with a population of over 200 million people and few opportunities being jostled for within the country, it is not out of place for people to have such desires to look outside the shores of the country in search of opportunities and better life. And for those that make it out, most of them never really forget home or their roots. They work tirelessly to succeed, and as they do they send back money to their relatives in Nigeria to support them, as well as amass investments in Nigeria mostly in form of real estate, perhaps with the hope of retiring back to their Fatherland in the future. 

However, even though real estate is said to be 'real', a number of such hardworking Nigerians in diaspora trying to invest in Real estate back home risk being swindled at it, both by unscrupulous relatives and fraudulent real estate firms and agents. Some have made bold to share their stories, while others have taken it in good fate and remained silent about their loss. The fraudulent lot thrive on the absence of their clients to easily swindle them either by diverting funds meant for the properties or by other means including some Real estate firms and agents allegedly selling parcels of land without allocation, which usually leads to unfortunate outcomes. 

In view of this, how can Nigerians in Diaspora invest back at home with peace of mind? 

One of the ways they can mitigate the risk elucidated above is by balancing out their real estate investment with investment in the stocks of Nigerian Companies publicly traded on the floor of the Nigerian Stock Exchange. It does not have to be one for the other, both can go together by carefully allocating capital between them on a regular basis. For instance, if a Diasporan plans to set aside $500 monthly for such investments back in Nigeria, they can split the amount into two and allocate $350 to Real estate and $150 to the Nigerian stock Market until they are comfortable to rebalance the allocation. This way they can both own landed properties back home, as well as have stocks (shares) of great companies back home which they can fall back to when they retire. 

One might ask, is it possible to invest such small amounts in the Nigerian stock market monthly? Yes it is. Stocks of Publicly listed Nigerian companies are traded every day in the Secondary market of the Nigerian Stock exchange, and all one has to do is to get a good stock broker with online presence who would provide further direction on how to open a stock broking account, CSCS account, etc., and begin to trade online. Some Nigerian stockbrokers with online presence include Investment-One, Morgan Capital, United Capital, Stanbic IBTC brokers, etc. With the Stock market you can get fundamentally good stocks that will give you both capital appreciation and pay regular dividends. An example of some companies that paid dividends for 2024 financial year include GTCO ₦8.03, Zenith Bank ₦5, Dangote Cement ₦30, etc., and they all publish their Financial results quarterly (This is not any form of investment advice). Imagine owning 1 million shares of GTCO 20 years from now, and how much dividend one would be receiving annually. Another example of capital appreciation of some Nigerian stocks in the past 52 weeks include Presco ₦346 to ₦1,186 as at today, Vitafoam ₦17.5 to ₦69 as at today, Nigerian Breweries ₦25.25 to ₦58 as at today, to name a few (again this is not any form of investment advice). Of course there are also a number of stocks that have performed badly within the same period, so one would have to speak to one's stock broker or investment advisor before making such investment decisions. 

There you have it. Nigerians in diaspora do not have to be stuck with Real estate investment only, rather they have the opportunity to explore the Nigerian Stock market and invest in viable fundamentally sound companies and reap the reward bountifully. Already they have currency advantage due to FX rate, which could give them the opportunity to get more volume of stocks. The good thing is that Stockbrokers with online presence provide platforms or portals by which one can trade and monitor their stock portfolio regularly without influence or threat of "omo o n'ile" or fraudulent agents as is the case with Real estate transactions. If one needs money or an emergency comes up, such platforms provide the advantage of selling off immediately, unlike real estate where one might have to wait for months before getting a buyer. 

If the current leadership of Nigeria is working towards a $1 trillion economy, most definitely the Capital market would be a partaker of the bounty. You sure do not want to be left out!

As stated before, speak to your Stock broker or Investment Advisor before making any investment in the Capital market.

Thanks for reading, and Happy Investing! Feel free to drop your comments below.