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Nigerian Millennials have figured where to invest their money

This why Nigerian Millennials will rather invest in cryptocurrency and ponzi scheme.



Nigerian Millennials

James, a Nigerian millennial, who had not been too happy with the snail-like growth of his bank account, chuckled yet again as he took one hard glance at his bank statement. For someone who had about N2 million in his bank account, you’d expect him to be wearing a wide smile. In Nigeria, being financially independent is a luxury for a lot of millennials, especially when you consider the purchasing power of earning in Naira.

But for James, it wasn’t the account balance that was his source of humour, it was the amount of credit interests he earned regularly. By keeping the money in the bank for 3 months, he had earned just N15,650 in interest income. This fell below his expectation. Being a cautious saver, he had avoided the trappings of giving his money to several people promising great returns. He liked risk and if he were to invest in money, he had an array of choices.

Investment opportunities in Nigeria

Traditional investment options: In Nigeria, several traditional investment options are available for millennials to invest in. Risk-free government securities like Treasury Bills and FGN Savings Bonds offer between 10% to 14% per annum in returns. Corporate Bonds offer similar returns but require a larger capital outlay which keeps it out of reach for many.

Real estate and Mutual Funds: Investors can also place their money in real estate, hoping that it will appreciate in a not too distant future. Mutual Funds are increasingly gaining wide adoption among some working-class millennials sipped in herd mentality. For most of them, it is at least better than keeping the money in the bank. However, the returns provided by these investment options are not great enough.

The Nigerian Stock Market: One investment that is often overlooked by this generation is the Nigerian Stock Market. Ironically, this is a market that could deliver the sort of mouth-watering returns they all seek. Unfortunately, it is a much-maligned market ladened with a severe trust deficit. Retail investors believe the market is often rigged in favour of select few.

Nigerian Millennials

Stock Exchange building

For a lot of millennials like James, saving or investing in Nigeria Stocks is anything but rewarding going by the returns available. Since Bull Ride experienced in 2017, Nigerian Stocks have posted negative returns quarter after quarter and remained one of the worst-performing exchanges in the world.

While stocks remain on the bottom of the ladder, fixed income securities just don’t offer the excitement of investment. Most millennials will rather place their money on riskier investments like Cryptocurrencies, Forex Trading, High-risk deposit accounts and Ponzi schemes than waste their time on traditional investments.

[READ ALSO: Foreign investors are dumping more Nigerian stocks]

NASD OTC: Apart from the Stock Market, Nigeria also has the NASD, an Over-the-Counter market for trading shares in unquoted companies. Unfortunately, this market has failed to live up to its expectations. Retail investors hardly know about its existence and even when they do, they realise the market is shallow and bereft of excitement. Just like the Stock Market, younger Nigerians place little regard to NASD OTC.


Millennials’ stories on their preferred investments

Cryptocurrencies: Ifeanyi, a marketing executive in a leading consumer goods firm said he loved investing in cryptocurrencies and had made “serious money” from it. He declined to mention how much he had made, claiming he did not want to be kidnapped. Cryptocurrencies have posted the best returns in the market for the last two years and it’s not difficult to see why young Nigerians love it. The risk is high, returns are mouth-watering and the feeling you get for placing is “lit”, as Ifeanyi remarked.

Nigerian Millennials

Microfinance bank: An employee of a microfinance bank, also a millennial, informed Nairametrics that some of her clients are younger than 30 years old and that the number is growing fast. Her bank receives deposits of N1 million and above and can pay as high as 14% per annum in interest payments. She claims interests can go as high as 18% per annum if the deposits are significantly higher and have a long retention rate. Nairametrics also received significantly higher questions from millennials, requesting to know how to invest in microfinance banks, compared to the Stock Market.

FinTech Products: The allure for FinTech is also of financial interest to young Nigerians. In Nigeria, most FinTech related products are sold to millennials as AgriTech funds or pure peer to peer lending. The more esoteric AfriTech funds involve playing in a market that allows you to lend money to farmers in parts of the country you may never visit. They promise significantly higher returns than traditional investments and offer low rates of loss of investments. At least that is what they make them believe.

Ponzi schemes: For the less savvy, risk-loving millennials, ponzi schemes are the preferred form of investing. For Kola, it’s not just about the risk, it’s the price point. With just N50,000 invested in a Ponzi scheme, he can make three times that amount in three months. He claims he knows the risk and that the schemes are not based on any underlying business, however, everyone who participates in it understands it’s just for a short period. Some Ponzi schemes, hardly last over 2 years, thus the earlier you place your bet, the less the risk.

[READ ALSO: T-Bill Yields Trade Flat as Market Players Shun Lower Rates]


Immigration: If Ponzi schemes are a race to the bottom, immigration is a race for survival. For most young Nigerians under 30, checking out of the country is a new form of investment, the only difference is that it is in their careers. Just like regular investors, they take on jobs that provide regular income, while acquiring experiences required to score immigration points. They then save a huge chunk of their salaries, for tickets, visa applications and living expenses. The upsides here are clear – a chance to get a better life in a foreign country.

Nigerian Millennials

Reactions to millennials’ choices of investment

Most fund managers we spoke to placed the blame squarely on the regulators and government. A senior investment officer in a leading mutual fund opined that the lack of exotic investment schemes like financial derivatives makes investments in Nigeria very boring. Doing this will require a significant change in regulations guiding the financial sector as well as lifting the lid on capital flows in and outside the country. According to him, the current government is not ready for this and even if they have a change of mind, it can take 3 – 5 years for markets like this to go mainstream.

Reasons for the hatred

So why the hatred for stocks and traditional investments?  For a lot of them, the answer is embedded in a bout of history. Their parents had lost a lot of wealth to the Stock Market crash of 2011. The bitter taste of that experience lives on in the hearts of their children. Unfortunately, this is very bad for the market.

Going by this dangerous trend, the Nigerian Stock Market, as we know it, will only continue to fall out of relevance and in a decade might just become extinct. Other traditional investments like Treasury Bills and FGN Bonds all sound esoteric and enticing until they figure out how “small” the returns are.

Based on the foregoing, it has become imperative for traditional investments opportunities to be made more attractive for young investors. One of the ways this could be achieved is to probably increase the interests accruable to investments. This is the only way to encourage millennials to consider buying shares or treasury bills.

More so, the authorities must work towards ensuring that investor confidence is guaranteed. Young investors who have once seen their parents incur loses and continue to do so may never invest their money in the same loss-making ventures.

[READ ALSO: Financial Expert explains why you should really consider mutual funds now]

Blurb articles are succinctly written opinions editorials from content contributors expressing their views on financial reports, macroeconomic data, and economic policies. Blurb is recommended for readers seeking 'straight to the point' information and viewpoints that can help shape better investment decisions.



  1. Fifi

    July 16, 2019 at 12:14 pm

    Great article! The frustration of looking for where to invest and get reasonable returns is real. Sometimes when you press your interest calculator the amount that come up doesn’t make the effort worth it.

  2. Dan M

    July 16, 2019 at 8:14 pm

    Interesting read. Quite clearly, millenials do have a very different take on what investment should be. It is useful that they have accepted the risk some of their preferred options present. I however don’t agree with the view of the need to ‘make returns more encouraging’ in order to improve the participation of a group. What is more important is for regulators to ensure that the integrity of platforms remains intact. Every investment type has its pros and cons. Things are also cyclical. And yes, new ‘exciting’ opportunities (like cryptocurrencies) emerge. Investment must start with the individual determining his/her objectives and figure out how to mix the alternatives available to realize goals.


    December 9, 2019 at 8:11 am

    Great piece, for me it’s a No No for stock since my undergraduate days bitter experiences. I was a die hard stock investor with a couple my friends and families, even though we made good money back then, like the money made from NAHCO sequel to their IPO which paid for my first laptop and a complete suit for my final year project and defence. However the remains of my stocks keep giving me a negative feelings about general volatility of shares. For instance the era of Ndi Okereke saw the stocks crashing due to cashing out of many high class holders for real estate in the Emirate world (Dubai) and a whole lot of bad shares sold by the then government of the day (Obasanjo) e.g. transcorp and looking at lives of some of my family friends impacted negatively then, I just left it like that without further investment.
    I could remember clearly a case of my uncle selling his Camry wagon for #250,000 while relocating to the UK then leaving me alone in the university of Ibadan undergraduate programme and he used the #250000 to buy Skyne bank 0
    PLC shares looking at the present worth even after many years (decades) the stock still does not worth #40000 of present day value….what sort of investment is this that someone will be trying to encourage me to do?

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Analysis: Total Nigeria needs a financial overhaul

 Total Nigeria’s Q1’20 results are a testament that some might have it worse than others as it recorded a revenue drop of 9.3% to N70.2 billion



Total Nigeria, Analysis: Total Nigeria needs a financial overhaul

The Oil Industry has had a particularly tough year, owing primarily to the novel pandemic. The International Energy Agency (IEA) predicts that the global oil demand is expected to further decline this year as Covid-19 spreads around the world, constraining travel as well as other economic activities.

Organizations like Total depending on international trade will be forced to scale down operations until restrictions ease off. However, Total Nigeria’s Q1’20 results are a testament that some might have it worse than others.

The period recorded a revenue drop of 9.3% to N70.2 billion in the first quarter of this year compared to Q1 2019. Total earns its revenue from three main sectors namely: Networks, General Trade, and Aviation. Revenue from Aviation fell by 39.5%. The decline in Networks is attributed to the reduced demand as a result of the enforced lockdown and restriction on travel across the nation.

READ ALSO: Analysis: MTN’s blow out Q1 profit vs Covid-19 headwinds  

Yet, it is clear that the company had its own challenges pre-COVID-19. In the quarter, it attained a loss after tax of N163 million which was 65.6% better than the loss after tax of the comparative quarter; it is overwhelmed by a myriad of distinct issues.

First off, its revenue has experienced a steady fall over the years; reasons for this is tied largely to its lack of importation of petroleum products.

It is also burdened by inefficiencies in its operations evident in its high operational and direct expenses, as well as its high debt over the past years. The company has carried on huge loans and borrowings in its books: N40.6 billion in 2019 and only a marginal reduction of N2.2 billion in the current year.

(READ MORE:Nigeria’s Bonga crude oil export terminal shut down)

Even higher are its expenses after an 8.38% reduction in the just-released results, it arrived at N69.7 billion for Q1 2020. Amongst its high operational expenses is the high and increasing technical fees it pays to its parent company. From N251 million in the first quarter of last year, it incurred around N700m in the year under review. It also has cash flow issues with about N22b in negative cash and cash equivalents. In its 2019 report, it revealed that the year had been tough with its cost of doing business rising exponentially as evident in its interest expense, 395% higher than the previous year as a result of repayment for products and a high level of borrowing.

Total Nigeria records loss for the first nine months of 2019, Analysis: Total Nigeria needs a financial overhaul


The company, in its last full year annual report, noted that to make significant savings to both operational and capital expenditure costs, a series of initiatives relating to cost efficiency, process optimization, and significant reduction of working capital requirement and finance costs, were put in place and are in motion for this year.

READ ALSO: STERLING BANK: Reduced fee income, weak operating efficiency drives steep decline in pre-tax profit

As Dr. Fatih Birol, IEA’s Executive Director put it “The coronavirus crisis is affecting a wide range of energy markets – including coal, gas, and renewables – but its impact on oil markets is particularly severe because it is stopping people and goods from moving around, dealing a heavy blow to demand transport fuels.”

However, Total’s position goes beyond the impact of the pandemic. Its rebound rests on its ability to carry on with cost control and lower debt commitments, together with the speed of the containment of the virus. That said, the company might need to raise capital soon while also coming up with formidable strategies to strengthen its business model.

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Merger, Tax incentive boosts BUA Cement FY 2019 result

BUA Cement Plc recently released financials reveal a 47.5% increase in revenues of N175.52 billion up from N119 billion in 2018.



BUA Cement gives succour to host communities in Edo

One of the industries set to experience the downsides of the Covid-19 pandemic is the construction industry. Given the slowdown in construction activities as a result of the lockdowns and constrained economic activities, the reasons are not farfetched.

Prior to the outbreak of the pandemic, Globe Newswire had predicted an accelerated growth pace of the global construction industry from 2.6% in 2019 to 3.1% in 2020. This growth has now been revised to 0.5%. What is even more daunting is that the revised growth rate is based on the assumption that the outbreak will be contained across all major markets by the end of the second quarter of 2020.

It is only after that (including freedom of movement in H2 2020) that events could facilitate reverting to the normal course of activities to foster businesses in the industry like BUA Cement or those that depend on it to restart activities.

Nigeria’s third-largest cement company, BUA Cement Plc, however, still has its 2019 victories in order. Involved in the manufacturing and sales of cement, BUA Cement has 3 major subsidiaries and plants in Northern and Southern Nigeria.

(READ MORE:Update: BUA Cement Plc lists N1.18 trillion shares on NSE)

With a market capitalisation of N1.18 trillion ($3.3 billion), BUA is the third most capitalised company on the NSE. Its recently released financials reveal a 47.5% increase in revenues of N175.52 billion up from N119 billion in 2018.

Kalambaina Cement Line 2, BUA Group, Kalambaina Cement, CCNN, Merger, Tax Incentive Boost BUA Cement FY 2019 Results

The company’s profits also increased by 69.1% from N39.17 billion in 2018 to N66.24 billion in 2019. Core operating performance was strong, and this was supported by strong cement sales in the domestic market, impairment writes back, and other income.

Deal book 300 x 250

The main reason for the company’s increased earnings is from the cost synergy and increased revenue as a result of the merger that took place between CCNN Plc and Obu Cement Company Limited.

There was also a striking jump in its income statement on its tax for the year. For FY 2019, it incurred a tax expense of N5.6 billion, in comparison to the N24.9 billion tax credit it received in FY 2018.


This was as a result of a reversal of previous tax provision made on Obu Line 1; it received approvals for an extension of the company’s pioneer status on Obu line-1 and Kalambaina line-2 in February 2020, to leave effective tax rate at just over 8% in 2019. The pioneer status will help the company save funds that will otherwise have been spent on higher taxes.

(READ MORE:Dangote Cement to access more debt funding)

BUA reported an impressive FY’19 result. Its performance shows the growing strength of the company and its increasing market share. On the back of the strong performance, management declared an N1.75 dividend per share that translates to a dividend yield of 5.5% on current prices.

Cash flow position was also robust with a strong closing cash balance – from N2.8 billion in 2018 to N15.6 billion as at year ended 2019. The company’s growth, as well as the impact of its merger, present a great buy opportunity of the highly capitalized, low-cost stock. As of today when the market closed (21st May) its share price stood at N35.60 from a 52-week range of N27.6 and N41.

READ ALSO: COVID-19: Best and worst case scenarios for the Nigerian economy

What we see is a great growth stock further heightened by the population expansion and increased urbanization. However, we expect the impact of the Covid-19 pandemic to be felt from the Q1 results of the company.


The industry could slow down for the year as the level of commercial construction also slows down. Yet the best part of holding stocks like this is that even with stalled operations for a period, a resurgence will always emerge.

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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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