From agriculture to real estate, How we made it in Africa highlights five business opportunities in Nigeria, Africa’s largest economy with a population of over 200 million.
1. Nigeria is a major rice grower but doesn’t produce enough to meet domestic demand and therefore has to import a fair amount. There is an estimated 2.5 million tonne shortfall between local supply and demand for rice. Mezuo Nwuneli, managing partner and co-founder of Sahel Capital, sees rice cultivation as a significant opportunity. “If you look at consumption dynamics in Nigeria, it’s effectively gone from minimal consumption of rice in the early 1980s to roughly seven million tonnes annually today,” he says. To find out more, read the full interview with Nwuneli.
2. Housing for young professionals presents a potentially lucrative, untapped business prospect in the Nigerian property sector, according to Abayomi Onasanya, founder of student housing developer Student Accommod8. There is substantial demand in the build-to-rent sector from young professionals who have a decent income but cannot find suitable apartments. These young adults are looking for 45 square metre, one-bedroom apartments, with shared utility rooms close to transport hubs. “Young adults tend to leave first thing in the morning and socialise after work; they generally come home to sleep, so the space need not be too large,” he says. Read more about this gap in the property market.
3. Nigeria has significant demand for private education, which creates a window for a chain of branded schools, according to Adetunji Adegbesan, CEO of Nigerian edtech company Gidi Mobile. “The huge need in Nigeria makes it ripe for the creation of school chains which benefit from economies of scale, including centralised services and management systems software. It is also faster to replicate a model than build it from scratch.” This, says Adegbesan, is a feature of India’s education system where one chain may have up to 40 schools in its network. He explains the potential is for tier-B and -C schools as the tier-A segment (aimed at wealthy families) is saturated. For our full interview with Adegbesan, click here.
4. The maintenance and servicing of agricultural equipment (particularly tractors) remain a concern for Nigerian farmers. According to Mira Mehta, founder and CEO of Tomato Jos – a Nigerian operation farming tomatoes for processing into tomato paste – one of their biggest headaches is the maintenance of equipment. Because of a shortage of parts, tractors are sometimes out of commission for weeks. “If you have a business that can provide an efficient service in fixing tractors or industrial agricultural implements, I think it could be a huge success,” says Mehta. Learn more about Tomato Jos’ journey of producing tomato paste in Nigeria.
5. In an earlier interview with How we made it in Africa, property developer Michael O’Malley said there is an opportunity for value retailers to enter the Nigerian market, which will drive the development of shopping centres. “The retailer base in Nigeria at the moment is not broad enough for even the smaller centres to gain a lot of traction. The types of retailers that are currently present in Nigeria are not offering a discount product to the public. We need value discount retailers to… look at the market opportunity in Nigeria.” Read about this profit-making idea.