The recent fall in global oil prices, the delays in passing the 2016 budget, the shortage of petroleum products, the steep drop in power generation and general slowing of economic activities in Nigeria, all have resulted in some foreign companies shutting down their plants, selling off and shipping out; Medium size (and in some cases blue chip companies) scaling down operations and reappraising financial activities as well as carrying out large scale cost engineering in order to stay afloat; invariably Micro, Small and Medium Enterprises have also taken a hit and may be the worst affected as this has created a shortfall in business opportunities for them, thus many have shut down operations and let go of staff while others carry heavy debt burdens as many clients are more frugal in their spending, whereas some even carry out tactics to evade paying for services if necessary.
With the above situation report, a lot of economic activities are still going on in what I call the underground/distress market. What is this? There is serious movement of cash between the wise investors who have surplus saved up for such a time as this and the less fortunate ones who have to sell off their assets to stay afloat. This is the order of financial transactions taking place, for example a property I recently got wind of belonging to a popular former government official which is currently valued at 150 Million was sold for about 100 Million, the pressure is mounting and the cost of living is also on the increase yet one must be smart in times of such distress. For the prepared it is a great time to buy! But if you have to sell to survive, at least reinvest a good portion of the inflow from sales into other less expensive distress assets. Put your money back in the loop immediately.
Many may be aware of the benefits of sales and purchase of real estate assets and seek out such deals since they are quick and, with the right counsel probably, easy. However, to the untrained eye there is a business generally ignored…construction.
Let me say here that I am not a financial analyst or an economist yet I am an industry professional just studying the trends… you see construction today may not look attractive but based on projections and budgetary allocations the industry is going to be one of the busiest this year. As between the ministries of transportation and the ministry of Power, Works & Housing they share a total capital expenditure of over N610 Billion, which accounts for up to 10% of the 2016 budget. This is more than 3 times the combined budgetary allocation for these sectors in the past 2 tenures. Going strictly by the 2016 budget and holding all other factors constant, the document tells me that one of the most lucrative businesses to consider within this administration is not Agriculture as is making the rounds in most quarters, not ICT, and certainly not oil but something relating to infrastructure, construction, housing and the built environment in general.
Now I want to mention ways to take part in this opportunity but I need time to piece my thoughts together properly. First of all, it is NOT rocket science and some people are already jumping into the space and making a kill, yet there is a place for everyone who is interested, hardworking and determined not to “suffer”… How do you partake of this opportunity? Read the next post, I hope to be done next week.
First Published in “Classic Heritage Magazine”
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