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Financial Literacy

Withholding Tax: Beginners’ Guide For Small Businesses in Nigeria

Beginners’ Guide For Small Businesses on Withholding Tax in Nigeria



FIRS could seal your office if you get these two notices

Whether you are opting out of a paid job to run your own business, or you are entering into business with zero employment experience; one thing is certain: you are becoming an administrator and a business leader if you scale through. As such, it is required that you perform some managerial  obligations in the best interest of your business.

This is to expertly prevent you suffering undue charges in the long run. One of such obligations is the issue of Withholding Tax that comes in various ways. Here is a comprehensive guide detailing all you need to know about Withholding Tax in Nigeria.


What is a Withholding Tax?

A withholding tax is basically an advance and indirect source of taxation deducted at source from the invoices of the tax payer. It’s main purpose is to capture as much tax payers that may have evaded tax into the tax net. Withholding tax rates are usually 10% or 5% depending on the type of transaction and collecting authority for the tax (which can be a Federal Inland Revenue or the State Inland Revenue).

[ALSO READ: A legal view of corporate taxation in Nigeria]

Withholding tax

GTBank 728 x 90

[ALSO READ: Taxes you need to be aware of if you are about to start a business]

How Does it work?

When a company or individual supplies goods or services to another company an invoice will usually be issued as evidence of a transaction. If for example the amount payable by the purchaser is N1million at the relevant tax rate is 10% then upon payment the purchaser will deduct N100,000 from the invoice of the supplier and then remit to the relevant tax authority.

The Purchaser is also obligated to obtain evidence of remittance in the form of a withholding tax credit note on behalf of the supplier. The Supplier can now use the tax credit not to reduce any income tax payable at the end of his year of assessment.

How do I use a WHT Note to reduce my income taxes?

WHT is an advance payment of your income tax, therefore if at the end of a financial year your tax payable is N500,000.00 and an aggregate of all your WHT credit note is N200,000.00, the net tax you will pay to the government will be N300,000.00. That is why it is important to keep your WHT Note.

withholding tax 2


[ALSO READ: A legal view of corporate taxation in Nigeria]


Please tell me more on the WHT Note

Okay, the WHT credit note is a document issued by a relevant tax authority to a beneficiary as evidence that withholding tax was deducted from its business. It is usually issued to the company that deducted the WHT from your invoice as such you must endeavour to always go back and request for it. This is because without it you will not be able to claim back the money that has been deducted from your invoice.

A WHT Credit note will include the following

  1. Credit Number
  2. The name of the tax payer (purchaser of your services or goods) who deducted the tax and remitted on your behalf
  3. The name of the beneficiary whose invoice was deducted (which is you I suppose)
  4. The Date of the transaction including the nature of the transaction

So what happens if my customer fails to remit my taxes on time?

Too bad, there is nothing much you can do except complain and then blacklist the customer. However, the tax authority upon noticing have penalties ranging from 200% per annum of tax not remitted for companies and N5,000 per annum for individuals. Meaning if your customer fails to remit N100k in withholding taxes already deducted from your invoice his penalty will be to pay N200k extra.

This penalty also applies to anybody who equally fails to deduct as well. Fortunately though, the tax authority can exercise leniency and grant the default some reprieve against the penalty.

remitter withholding tax

[ALSO READ: Taxes you need to be aware of if you are about to start a business]


As the Remitter , when Do I have to remit the taxes I deduct?

So, if you deduct taxes from your suppliers invoice you must file returns at the end of any given month. All you do, is draw up a schedule detailing the list of companies you deducted taxes from, their addresses, the value of the invoices,  the tax deducted and the rate, Your name and address as the tax payer and the relevant tax authority . You then attach a cheque(s) for the total amount deducted for the month.

You can pay directly to the bank. Banks these days have agent who collect these cheques on your behalf and promptly obtain receipt of payment on your behalf. After obtaining receipt of payments, you now take to the relevant tax authority attached to your schedule, so you can be handed the WHT credit notes on behalf of your clients. You should keep a file for all the WHT Credit note you receive on behalf of your clients for easy accessibility.

Does it mean all transactions involve WHT?

WHT is mainly for transaction involving contract of purchase. What this means is that WHT can only be deucted from your invoice if it involves supply of goods and services to a destination requested for by your client. WHT cannot be deducted in the ordinary course of your business, meaning if I you sell soaps and I come to your shop or market to buy the soap, I cannot deduct WHT from your receipt.

However, If I ask you to supply to me then that becomes a contract and as such I am obliged to deduct WHT from you.

[ALSO READ: A legal view of corporate taxation in Nigeria]

Please what do you really mean by Relevant Tax Authority?

A relevant tax authority is either the State or the Federal Government. The State Government collected WHT from Individuals or Sole Traders under the Personal Income Tax Act. The Federal Inland Revenue collects tax on behalf of the Federal Government under the Company Income Tax Act

CAVEAT: Don’t forget to always consult a tax consultant for help with your taxes. This only serves as a guide.

[ALSO READ: Taxes you need to be aware of if you are about to start a business]

Ugo Obi-chukwu "Ugodre" is a chartered accountant with over 16 years experience in financial management, corporate finance and financial analysis. He is also a retail investor and a personal finance advocate with over a decade experience investing in the Nigerian stock market. Ugo is the founder/Publisher of Nairametrics and blogs regularly on the website.



  1. Heather

    October 26, 2013 at 5:40 am

    Precisely what really motivated you to create “A-Z Of Withholding Tax In Nigeria – Beginners Guide For Small Businesses | UGOMETRICS BLOG”?
    I personallycertainly adored the post! Thanks -Anita

  2. zoefafa

    March 22, 2014 at 10:50 pm

    thanks a lot ugometrics. stumbling upon the link that brought me to this site has been like striking a diamond mine of financial literacy. thanks a bunchy y’all.

  3. subas

    March 26, 2014 at 12:43 pm

    Very educating…

  4. Anonymous

    July 23, 2014 at 9:36 am

    I found this article on withholding tax very useful. I think that there is a high risk of double taxation with this category of tax. The other issue is the technicality involved in determining what constitutes ordinary course of business especially for service providers. I believe that if the other heads of taxes are well monitored and executed, there would be no need for withholding tax and the risk of double taxation for instance via WHT and VAT on the same service

  5. Teingo Inko-Tariah

    July 23, 2014 at 9:37 am

    I found this article on withholding tax very useful. I think that there is a high risk of double taxation with this category of tax. The other issue is the technicality involved in determining what constitutes ordinary course of business especially for service providers. I believe that if the other heads of taxes are well monitored and executed, there would be no need for withholding tax and the risk of double taxation for instance via WHT and VAT on the same service

  6. Mordi Vincent

    September 30, 2014 at 11:32 am

    Thanks for educating me in the field of Taxation.

  7. Eno

    November 13, 2014 at 9:45 pm

    Very educating. Thank u for the awareness on dis topic

  8. omolara

    November 20, 2014 at 2:51 pm

    Beautiful! Really helped

  9. Sandra

    December 3, 2014 at 3:46 pm

    Please, I need clarification on something. My employer charged a supplier WHT on his invoice, and the selling price of the goods already has VAT included. So the supplier claims that since he has charged VAT on the transaction that there was no need to pay his fees net of WHT again.
    Could you please provide explanation to clear this.

    • Nairametrics

      December 3, 2014 at 4:18 pm

      Hi Sandra, You charge 10% WHT (if it is a registered company) or 5% WHT (if its a sole trader) on his invoice.So for example, he sells you an item costing N100 and charges 5% VAT his invoice will be N105. However, before paying you deduct the WHT from the N100 and not N105. The tax base for WHT is on the supply value (excluding VAT) Cheers

      • Sullivan

        February 18, 2015 at 9:48 am

        Hi Nairametrics, the first sentence of your explanation is not quite correct. What determines the WHT tax rate is first of all the nature of the transaction and then the entity type. For example, a supply of a good or the provision of a service (contract of supply/service) will attract WHT at 5% irrespective of whether it is an incorporated entity (limited liability company, plc) or unincorporated entity (partnership, enterprises etc.

    • Dennis

      April 13, 2017 at 2:11 pm

      Since the invoice is vat inclusive, then your employer was right by deducting WHT from the invoice.

  10. Jide

    December 6, 2014 at 1:55 pm


  11. Bola

    January 16, 2015 at 10:29 am

    Thanks… This is really helpful

  12. Osasuyi Peter

    January 26, 2015 at 12:59 pm

    WTH has been clearly explained in your post. I really like the examples and the simple language used. Thank you a lot.

  13. Osasuyi Peter

    January 26, 2015 at 1:04 pm

    I meant WHT up there.

  14. Sullivan

    February 18, 2015 at 9:55 am

    A good post…. We have setup Taxassit to provide free tax services to starters and SMEs in Lagos and Port Harcourt. All tax advices are provided by volunteers with experience from the big 4 accounting firms.

    The website is under construction and the services are completely free.

    • Anonymous

      March 9, 2016 at 5:40 pm

      Thanks for the good initiative I’m highly interested to participate you can reach me on thanks
      Adekola Taofeek Aca

    • juciken

      March 21, 2018 at 5:56 pm

      What’s the endpoint of the free service? If free indeed, then I am interested

  15. Oby

    March 11, 2015 at 8:32 am

    Does a company in a particular state pay WHT on supplies of raw materials to the state Government where it resides.

  16. Oby

    March 11, 2015 at 8:33 am

    Does a company in a particular state pay WHT on supplies of raw materials to the state Government where it resides and if not why

    • Nairametrics

      March 11, 2015 at 9:41 am

      Companies pay WHT to the FG not state. Only Sole traders or One Man businesses or Partnerships pay to the state

    • Anonymous

      January 19, 2016 at 2:38 pm

      Please can WHT be deducted in rents?

  17. Agie

    March 17, 2015 at 10:48 am

    who can the lagos internal revenue service collect WHT from? can it be collected from a limited liability company?

  18. Emmanuel Uwaga

    July 29, 2015 at 10:54 am

    Please what will be the right WHT treatment on invoice sent iro out sourced staff salaries with all statutory deductions to be remitted by the sourcing firm?

    • Nairametrics

      July 29, 2015 at 6:50 pm

      We believe it is 10%

      • Anonymous

        May 19, 2019 at 4:00 am

        10% of the total invoice or 10% of service charged?

  19. Pingback: Don’t Miss Our Top Trending News For The Week | NAIRAMETRICS


    November 19, 2015 at 12:42 pm

    This is quite rich and knowledge broadening. Kindly cite the relevant tax legislation and date for WHT legislation in Nigeria

  21. Opiughie John

    January 19, 2016 at 8:39 am

    Can WHT be deducted in retrospect?

  22. Constance Joy

    January 19, 2016 at 2:40 pm

    Please how can WHT be deducted from rent?

  23. jamiu

    January 28, 2016 at 3:11 pm

    For transactions that attract both vat and wht. I think the normal practice of deduction is to deduct vat first from the gross value and later apply appropriate wht rate on the net after vat. Some say no to this approach.they opined that the wht rate should be applied on the gross. Please which of these opinions is right

    • Anonymous

      March 2, 2017 at 7:39 am

      WHT rate should be applied on the net amount. Applying it on the gross will amount to charging WHT on VAT.

  24. Anonymous

    February 4, 2016 at 4:32 pm

    This article is wonderful. All thanks

  25. Gideon

    February 9, 2016 at 12:35 pm

    How do you handle a situation where WHT was not deducted on previous payments on a contract which occurred in previous years? Can WHT of the previous payments be deducted by the Client from the outstanding balance in the preceding year?

  26. Ada

    February 17, 2016 at 11:32 am

    Do you need to withold WHT if you have not paid the supplier?

  27. Pingback: And Here’s A Recap Of Our Top Ten Trendy News For The Week | NAIRAMETRICS

  28. Anonymous

    April 7, 2016 at 9:58 am

    Thanks for the post….
    However, in a case of an unincorporated company (Enterprise), I understand it is not liable to pay Company Income Tax. The customers have been paying WHT on its behalf. How does an Enterprise claim back the deducted WHT from the government since it is not liable for CIT?

  29. Irene

    April 15, 2016 at 9:33 am

    This post is brilliant. The language is simple and very comprehensible. Thank you so much for this insightful piece. Can you please provide the link to the Taxassist website you spoke about?

  30. idris Olufowobi

    April 20, 2016 at 10:45 am

    Is WHT applicable on foods supplied by a fast food outlet for a function?

    Will appreciate your prompt response.

    • Nairametrics

      April 20, 2016 at 1:16 pm

      Yes it is

  31. Victor Olanrewaju

    April 25, 2016 at 3:28 pm

    Thanks so much for this piece

  32. willy

    June 9, 2016 at 9:44 am

    The text is simplified and very interesting.

  33. Maureen

    June 13, 2016 at 6:30 am

    Thanks so much you have saved me the stress of going to FIRS for enquiry.

  34. Chika

    June 17, 2016 at 10:32 am

    This has to be an all time classic! Thank you nairametrics for helping small businesses everywhere!

  35. Dayo Akande

    July 7, 2016 at 7:21 pm

    The write up on WHT is educative and insightful. Thank you

  36. Dare

    August 25, 2016 at 11:38 am

    Good write-up, but quick question pls. Supposing I gave out an Invoice with contract value of N50,000 and VAT of N2,500. Total Invoice value comes to N52,500. The client paid N47,500 (which is a deduction of 10% WHT on the contract value). My question is since the client deducted withholding tax and gave me the WHT credit note, am I still supposed to remit the VAT of N2,500 to FIRS? Thinking it will be double taxation when I remit VAT of N2,500 again from my N47,500. please help out. Thanks

    • Nairametrics

      August 25, 2016 at 1:16 pm

      Hi…it will not be double taxation. You are still expected to remit the N2,500 as vat. You only remit less if you have a corresponding input vat

    • Immanuel Silas

      March 2, 2017 at 8:35 am

      Let’s look at it this way:

      Contract value 50000
      VAT 2500
      Total 52500

      When payment is made.

      Cheque 47500
      Credit Note 5000
      Total 52,500

      Hence, when you remit VAT of N2500 from the cheque amount, You’ll still be left with your contract value of N50000 which is now made up of N45000 in bank and N5000 in form of WHT credit note.

    • Adekunle

      July 11, 2019 at 9:25 am

      Hi Dare,
      If the WHT Credit Note issued to you is valued at N5,000, (as against N2,500 at 5% as expected), it then means a 10% rate was applied to your invoice. However, you still have to remit the VAT of N2,500.
      Thank you

  37. Lanre

    November 9, 2016 at 1:41 pm

    Thanks so much for the info. Is my school’s end of year party also liable to the WHT?

  38. Philip

    December 11, 2016 at 9:39 pm

    Please if am paying withholding tax, should I pay for the tax that is called for by a local government council?

    • Nairametrics

      December 11, 2016 at 10:21 pm

      Pls explain better. What local government tax are you referring to?

  39. Peju Olufemi

    February 16, 2017 at 12:03 pm

    I appreciate your good work but I will enjoy updates on economic issues,


  40. Olumide Olumorokun

    May 31, 2017 at 2:06 pm

    The A-Z of Witholding tax in Nigeria depicts the best way of explanation of the concept of Witholding tax with clarity on the part of a lay-man. thank you

  41. chima frank

    June 1, 2017 at 1:35 pm

    am in a supply firm, we have not been given WHT credit note from a particular company for some time now and the authority(government) have charged us to bring our note or to pay the bills. pls i want to know how to go through in getting all the WHT from that company we have been supplying to.

  42. John

    September 2, 2017 at 4:41 pm

    less grammar and jargons. Simply telling what it is anyone might be wanting to know. Thank you very much

  43. Onosemuode Efe

    September 14, 2017 at 11:56 am

    How do I generate a schedule, please? Thanks.

  44. Olukayode Adedayo

    September 25, 2017 at 8:51 pm

    If I am not the purchaser or supplier and WHT has been deducted from purchaser, would I still pay tax on my commission received from supplier?


    October 19, 2017 at 5:26 pm

    If a supplier of service gave a certain % of discount to a purchaser, what value will be subjected to WHT? is it the gross or the net value?

  46. Anonymous

    February 21, 2018 at 8:55 pm

    Please how do you account for WHT tax (from service provider’s perspective)? I would like to know the accounting entries.

  47. Divine

    April 4, 2018 at 10:28 pm

    My tenant, an eatery pays one million as rent, is it right for the tenant to deduct 10% from my rent as WHT even when l am a retiree. Please, l really want to be educated on this. Divine

    • Nairametrics

      April 5, 2018 at 7:07 pm

      The eatery will deduct WHT from rent payment to you if the house is not owner-occupied.

  48. Anonymous

    April 24, 2018 at 3:15 pm

    Best description, simple and straight to the point! Thank you

  49. Ife

    June 25, 2018 at 4:32 pm

    Thank you for the info. Kindly advice on what to write to a client who deducts witholding tax on total invoice instead on admin charge. Thank you

  50. Prince Oputun

    June 26, 2018 at 12:20 pm

    Thank you for the information.

  51. Caroline

    June 28, 2018 at 4:01 pm

    Thanks for this article, could you please let me know if WHT is applicable for transport services(air freight shipment from Europe to Lagos) invoiced by a foreign company

    • Adenike

      December 6, 2018 at 4:53 pm

      WHT can only be charged on transactions carried out within Nigeria. Foreign company’s will not have any means of accessing the credit notes.

  52. Anonymous

    July 10, 2018 at 12:05 pm

    Thanks, the article is educating.

  53. Anonymous

    August 1, 2018 at 10:45 am

    Good Article, please how much withholding tax is deducted from a retainership fee meant for a Law firm who offer legal services to a company?

    Remember the Law firm is an enterprise not a company.

  54. Lyn

    August 16, 2018 at 1:08 pm

    so we paid our agent the sum of 15m for rent and the contract stated that the amount was net of tax. so this means we will pay 10% of that amount to LIRS? kindly assist as i will appreciated your swift response.

  55. K7

    August 28, 2018 at 12:04 pm

    If another country ( DRC Congo) deducts WHT for an export contract from Nigeria ..can the Nigerian co. use the WHT credit note to claim Tax offset

  56. Lucky Ehigie

    August 29, 2018 at 3:12 pm

    Can WHT be deducted on a landed property trasaction? Say I sell my house to a company at an agreed sum, does the company have any power to deduct any amount in the name of WHT?

  57. Topaz

    April 12, 2019 at 5:07 am

    What are the differences between vat and wht?

  58. Today Birthday

    December 28, 2019 at 9:22 pm

    I relish, result in I found just what I used to be looking for.
    You have ended my four day long hunt! God Bless you man. Have
    a nice day. Bye

  59. Bayo

    January 25, 2020 at 11:58 am

    What can be done if my employer has been deducting my tax and pension from my salary every month and they refuse to remit it and it has been ongoing for 4 months?

  60. Toochi

    February 29, 2020 at 8:53 am

    Clear and direct. Many thanks. Thanks again.


    March 5, 2020 at 8:22 pm

    Good evening and thanks for this explantion on WHT. Do you charge WHT on the total value on the invoice or the service charge of the supplier?

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Financial Literacy

7 common money mistakes I made and why you should avoid them

Don’t plan your wedding with the hope that your uncle will foot the bill. It is setting yourself up for frustration. Uncle also has his money issues that you have no clue about.



On Sunday, March 17th, 2020, Nairametrics Founder, Ugodre Obi-Chukwu, tweeted a question that has over time garnered more than seven hundred interesting responses. His question was about debt and it was straight to the point —”What was the most amount you lent out to someone and never got paid back?”


As you can expect with this type of question, the responses were varied and highly personal. The Twitter thread also proved one thing, and that is the fact that banks are not alone when it comes to bad debts. One of those whose responses stood out for this author is Gabriel Omin, a personal finance enthusiast. Interestingly, Mr Omin had earlier written extensively about the 7 money mistakes he made in the past, and lending is atop his list. See below.

Never Ever Lend Money Kept In Your Custody.

There is a reason you were chosen to keep the money. People do not joke with their money and so they carefully choose who keeps corporate funds. Even thieves chose trusted people to keep their money.

When you betray the trust of people for whatsoever reason, you’ve soiled your name. You will lose social capital, which is a very important capital (this is one of those, not everything that counts that can be counted). That is very hard to undo. Whatsoever happened, it’ll be hard for people to forget. My dad will not touch the original money that is given to him to keep. If you numbered your money, you will get it back the same way. Basically, you will get the same notes you gave him to keep except he took the money to the bank.

GTBank 728 x 90

I learned this the hard way. A friend of a friend came with a need. He told me he had funds in the bank but it did not clear and the next day was a public holiday (this was pre-online banking). I loaned him money that someone gave me to keep. The person who gave me the money to keep, trusted me to the extent that he refused to sign a contract with me because he trusted me. I was supposed to get the money on the next working day, from the friend of a friend. Till today the next working day nefa reach. I had to go to the guy who gave me the money to keep for him, spoke a lot of English and paid back though I missed the day we earlier agreed. It was sad but I learned the hard way.

READ ALSO: COVID-19: What businesses must do to mitigate crisis

Avoid Impulse & Unplanned Expenses.

No budget, no spend. Spending without a budget is misappropriation. It doesn’t apply only to politicians. Have a budget & stay on it. This is the epitome of discipline. People will say what they want to say but instilling financial discipline is more important. A budget creates boundaries. Without a budget, you are on the speed lane to debt and debt…s/he is cruel. Plan plan plan. There might be surprises but a plan keeps you in order. It helps you know where you have detoured. You must not buy every AsoEbi. ATM cards are sweet to swipe but hard on the balance.

One of the ways to avoid impulse buying is to hold cash. Yes. It sounds not- so-tech in a tech age but believes me it works. When the cash is finished, it is finished. Sitting down in one place also helps. Yes o. The more the outing, the more the expense. I can feel the envy I am generating with this but na so e bi.

The Money Will Come.

You are old enough now to know that the money will not always come. Things happen. Have a buffer for emergencies. The difference between politicians & business people is that politicians do not understand why the money should not come. Business people work for money. They know that you have to make it happen. Stop planning your expense based on the generosity of strangers.



Spending Based On Other People’s Purse.

Don’t plan your wedding with the hope that your uncle will foot the bill. It is setting yourself up for frustration. Uncle also has his money issues that you have no clue about. Don’t plan to fly business class with the hope that someone else will pay. You are not on welfare. Even if you are on welfare, please bring something to the table. That something is humility.

Responsible people spend within their means. They may not have Rolexes or iPhones but they hardly ask for help on predictable things like house rent, school fees, etc. It takes 9 months to have a baby. It is not an emergency; plan for it. I take God beg you; plan.

READ ALSO: COVID-19: The ‘New Normal’ for Nigerian aviation industry

Your kids should be in schools that you can afford. People have come to me for fees of school that my kids cannot even attend. I once headed a scholarship board and we set our requirements from day one. But parents kept coming for help in schools that they cannot afford. I mean households that both parents were not earning any income. You see what I mean by the fact that you have to contribute humility when you come to the welfare board?

Don’t buy with the hope that someone else will pick the bill. Try and agree upfront for a joint transaction. For the fact that someone paid upfront might mean that s/he expects repayment. Don’t think s/he is wicked when repayment is expected and asked for. In joint transactions, always think of going Dutch except you are advised otherwise. Err on the side of caution.


Spending Money Before It Gets To You.

Things happen. Until money enters your account, don’t go & pick something with the hope that you will pay when you get the money. That habit will lead you into the red. How about if that money does not come at the end of the day? I try not to make promises to people based on expected money. I see people start piling up debt just because they got a new job. It will distort your balance sheet if you start that way. It never ends well.

Money Sent Me On Errand.

I have seen people who were given a raise, upgrade their lifestyle in a heartbeat. Fly business class by the next day. Buy an expensive toy they never planned for. This is what happens to lottery winners. They pursue the appearance of wealth. The appearance of wealth is demonstrated when you get those things that make it look like you’ve arrived. It is the reason people take pictures sitting on cars; same reason musicians record videos in mansions and nice cars and private jets. Gang stars wear fur coats. Same when people buy TV/stereo set/gadgets with their first salary. Always allow the money to cool down. Take out time to plan what to do afterward. I have a one month rule for windfalls. They stay in the account until such a time that I have decided the way forward.

Depending on the Generosity of Strangers.

This is living life with the hope that somehow someone else will show up in the nick of time to pick your bills. It leads to living in debt and hoping that those you are indebted to will forget the money. These people can come to you with their family to thank you for the debt forgiveness you have rendered them. Meanwhile, you have said nothing of such. They always convert their debt into forgiven loans by themselves without your consent. They are experts at this. They quarrel and get contentious if you do not forgive. Money problems abound.

So, next time you think of doing any of these, have a rethink.

Continue Reading


A New Wave: Where to Invest in H2 2020

Some of the industries that are expected to succeed given the changing times are not your usual kinds of investments.



A New Wave: Where to Invest in H2 2020

There are two kinds of people in the world: The ‘glass-half-empty’ kind, and the ‘glass-half-full’ people. Where some see problems, others see the opportunities – same glass, but different perspectives. 2020 might have left very little hope to hang on to, but the world is still in motion.

Amidst the chaos, many have found their diamonds in the rubble – and many more will. These people, however, will be those who are willing to adapt to the changing times by repositioning themselves to leverage the opportunities that arise.


The Covid-19 pandemic has proven to be a holistic challenge, bringing to the fore a myriad of issues. It has caused a dent in the revenue/ disposable income of many businesses and individuals alike, shaken the very balance of the economy with many countries heading for unprecedented recessions, and left everyone with so much uncertainty.

Yet, we are at the cusp of a new dawn. Processes are changing, new industries are emerging, and money is changing hands. Flexibility, automation, and sustainability are just some of the words that will make all the difference in the world of business.

Dr. Ola Orekunrin Brown, the founder of Flying Doctors – a healthcare investment company – had, at the Quarterly Economic Outlook Webinar hosted by Nairametrics, offered insights into some of the industries that are expected to succeed given the changing times, and they have been outlined below. But be warned, a lot of them are not your usual kinds of investments.

GTBank 728 x 90

READ ALSO: The week that shook the world: the collapse of the Lehman Brothers and the effect it had on me

Investment opportunities to leverage in H2 2020

Online Events

One of the many trends that emerged in recent times, as a result of the Covid-19 pandemic induced lockdown in many parts of the world, is a huge dependence on internet technology and digital media. Everybody went indoors – and online. The entertainment sector found its home on social media through Instagram Live parties, Tik Tok, and the Houseparty App.

Companies went online as well, leveraging digital technology like Zoom, Microsoft Teams, and Slack. Even the lifestyle industry went online with online gym classes, yoga classes, and even karate classes. Not only have they provided much-needed solutions, they have also come with the additional benefit of convenience.


A good example of this is Eric Yuan, the founder of Zoom, who joined Forbes’ billionaires’ list for the first time as a result of the increased use of Zoom for work meetings. Apptopia, an App tracking firm, reveals that Zoom was downloaded 2.13 million times around the world on 23 March, the day the lockdown was announced in the UK– up from 56,000 a day and two months earlier.


Online education

Another feature of the digital economy lies in the education sector. With schools forcefully closed, classes have had to go online. Online courses, training workshops, and even full degrees will become more normal as those who work from home will see these online education courses as an opportunity to develop themselves with little effort.

Investments here will be even more fostered by access to international markets, thereby increasing the market size. ResearchAndMarkets predicts that the online education market is poised to grow by $247.46 billion during 2020-2024, progressing at a CAGR of 18% during the forecast period.

READ ALSO: Stay secure when shopping online – Follow these tips from Visa

Institutions that are too big to fail


The stock market is expected to be even more volatile, given the overall unfavourable economic terrain and a high level of uncertainty – especially with all the talks of a recession coming. In H1 2020, the more favourable companies to invest in are those that have stood the test of time – the stocks that are too big to fail.

Many of these stocks have been in existence for decades and have been able to attain a level of stability as a result of their large market share and stable structures. You want financially strong companies and the reason is not far-fetched; the goal is to put your money behind the companies that are strong enough to withstand the storm to a good extent.


Another by-product of the Covid-19 induced lockdown is the increased need for internet services. Dr. Ola explains that the use of the internet as well as the move to work-from-home, are some of the megatrends of the times.

Good internet connectivity has proven to be the lifeblood that keeps digital entertainment trends, digital work trends, digital lifestyle trends, digital entertainment trends, and a huge chunk of the communication we have today. As a result of this, companies in the telecommunication industry have begun experiencing growth in revenue and earnings. Investments in this sector will most probably be worth your while.

READ ALSO: Banking related phishing up 9% in 2019, e-stores down 10%

Distribution & E-commerce

When the Okada ban took place, several motorcycle companies that were affected were forced to pivot from transporting people to moving items as full-scale delivery businesses. While many might have thought that a bad idea, the lockdown has undoubtedly contributed to the development of this industry.

The e-commerce industry is also expected to thrive with trade moving predominantly to the internet. Investments in distribution companies and e-commerce businesses are also expected to be worth your while.

Stronger currencies

One of the major hits of the pandemic is the Nigerian foreign exchange market which has now become highly volatile. The demand for the dollar far outweighs the available supply and this has forced importers and speculators alike to scramble for what is available in circulation.

Given the challenges with the FX market, international spending on foreign denominated expenses like tuition fees or international loans will come at an increased cost. To mitigate foreign exchange loss challenges, investments in USD denominated equities, and Eurobond funds will help you withstand the storm. While gains here could have you betting against the Naira, having foreign investments in your investment portfolio will come in handy.

READ MORE: Edtech redefines learning during Coronavirus pandemic


The Agricultural industry is an expected gainer. One of the reasons for this is that local supply chains will expand, given the restrictions on the global supply chain as a result of the lockdown and the border closure. While this will also thrive, Dr. Ola Brown, explains that jobs will only be created in the short term.

This is because fewer hands will be required as productivity, better processes, and mechanization systems increase. An example of this is the new trend of robot herders in the United States. This is even more so as we compete with the rest of the world in production. Needless to say, Agriculture will always exist, given the need for food, as well as the rising global population.

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While the Covid-19 pandemic has a direct impact on the healthcare industry, the industry is a complex one. The first reason for this is that, with the healthcare infrastructure deficit in Nigeria, the government will need to invest in it to provide wide access.

With subsidies on healthcare, the free market in terms of investments might not be as lucrative with more people opting for government healthcare. However, given increased investments in the sector and the move to preventive health practices, the industry remains attractive.

For more detailed investment opportunities with specific stocks in the Nigerian Stock Market, sign up for the Nairametrics Stock Select Newsletter.

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Analysis: Airtel Nigeria is winning where it matters

Airtel has left no stones unturned in ensuring that its provisions are top-shelf – subscribers to the network, of course will have their own ideas.  



Analysis: Airtel Nigeria is winning where it matters.

Airtel might have won our hearts over with internet-war adverts starring our favourite tribal in-laws, but its fundamentals are what will make us the bucks that keep us happy. Airtel Africa Ltd is a subsidiary of Indian telecoms group, Bharti Airtel Ltd; the group has left no stones unturned in ensuring that its provision of prepaid plans, credit transfers, mobile internet services, messaging, roaming facilities and more, are top-shelf – subscribers to the network, of course, will have their own ideas.

Since last year when Airtel Nigeria became the second telecommunication company in Nigeria listed on the NSE, the company has experienced a steady level of growth. With a presence in 14 African countries, the group’s strength lies in its diversity with stronger companies mitigating the poor performances of others.

Performance Overview: Airtel Africa 

Airtel Africa’s report for the year ended March 2020, revenue jumped by 10.9% from $3.1 billion at the year ended 2019 to $3.4 billion in 2020. The consolidated profit before tax also jumped by 71.8% from $348 million in 2019 to $598 million in 2020. However, profit for the period dropped by 4.23% with earnings of $408 million in 2020 from the $426 million it had earned in 2019. A reason for this is the tax figure that moved from a credit of $78 million in 2019 to tax payments as high as $190 million in 2020. Total assets also jumped by 2.41% from 2019’s value of $9.1 billion to $9.3 billion in 2020 primarily as a result of their acquisition of more property, plant, and equipment (PPE). The total customer base grew by 9.3% to 99.7 million for the year ended.

Full Report here.

Revenue growth of 10.9% was driven by double-digit growth in Nigeria and East Africa. However, the rest of its African operations experienced a decline in revenue. Its success in Nigeria is especially commendable, considering the fact that the company lost more than 100,000 subscribers in Nigeria between December 2019 and January 2020. Raghunath Mandava, Chief Executive Officer, remarked that the results which were in line with the group’s expectations, “are clear evidence of the effectiveness of our strategy across Voice, Data and Mobile Money.”

(READ MORE: NCDC and NNPC-IPPG reinforce #TakeResponsibility theme with multi-lingual campaign)

Behind The Numbers – Nigeria

Airtel Nigeria’s performance indicates the company is making the right calls in a very competitive industry. Nigerians are fickle when it comes to data and voice but will spend if the service is right. The company grew its data revenue by a whopping 58% to $435 million a sign that its strategy to focus on data is working. Voice Revenues for the year was up 15% to $850 million. In total, Airtel Nigeria’s revenue was up 24.4% to $1.37 billion. Ebitda margin, a number closely watched by foreign investors 54.2% from 49% a year earlier. Operating profit for the year ended also jumped by 52.6% for the year from 2019 and 32.4% from Q1 2019. Total customer base in Nigeria also grew by 12.5%.

Regulation forces Airtel Africa to initiate shares listing in Malawi , Analysis: Airtel Nigeria is winning where it matters.

Deal book 300 x 250

Nigeria is surely critical to Airtel Africa’s future seeing that it contributes about one-third of its revenue. Recent results thus indicate it is winning where it matters most and it must continue to stay this way if it desires to survive a brutal post-COVID-19 2020. Telcos are expected to be among the winners as Nigerians rely more on data to work remotely but there are other players in this game. Concerning the impact of the pandemic, he explained that at the time of the approval of the Group Financial Statements, the group has not experienced any material impact arising from the impact of COVID-19 on its business.

On cash flows…

The group has also taken measures to enhance its liquidity. The CEO explained that it is moving its focus to enhance liquidity towards meeting possible contingencies.


“Having considered business performance, free cash flows, liquidity expectation for the next 12 months together with its other existing drawn and undrawn facilities, the group cancelled the remaining USD 1.2 billion New Airtel Africa Facility. As part of this evaluation, the group has further considered committed facilities of USD 814 million as of date authorisation of financial statements, which should take care of the group’s cash flow requirement under both base and reasonable worst-case scenarios.”

To this end, they have put in the required strategies to preserve its cash as its cash and cash equivalents, consequently, jumped by 19.1%.

(READ MORE: COVID-19: MTN says it has put strict measures in place to preserve resources)

Buying opportunity

Investors looking at this impressive result will be wondering if this portends a buying opportunity. Airtel Nigeria closed at N298 on Friday and has remained at this price for about a month. The stock is quite illiquid and is not readily available to buy.

It’s the price to earnings ratio of 4.56x makes it quite attractive. Further highlighting this opportunity is its price-to-book ratio which is as low as 0.5273, suggesting that the stock could be undervalued. Whether it is available to be bought, is anyone’s guess.





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