Best Short Term Investment Opportunites In Nigeria

This is a typical question a mid-level income earner sent to my mail on the best short-term investment opportunities in Nigeria:

Best Short Term Investment Opportunities In Nigeria

I have N100,000 that I need to invest without much exposure to risk but want to make more than bank annual savings return, where can I get a higher return on a short term, say 6-months - 1 year?

I am not surprised if a lot of people with more cash are asking and looking for answers to this question. Why? We are in an eventful period where saving money in a bank no longer pays, not because of the interest return but the rate at which the Naira loses value is alarming. You will also agree with me that what one could buy with N10,000 in 2012, one can't afford that same value with N20,000, that's how inflation will wipe out the real value of N100,000 and leave you with the normal value.

Another better place we no longer trust is the Nigeria stock market. Personally, I still believe this is the best financial market one can invest in only if you know how to spot a great company with profit potential and are willing to hold your portfolio between 3 - 5 years.
In an unpredictable market like Nigeria, where do you think one can safely invest their money, whether N50,000, N100,000 or N1,000,000, at little or no risk while being assured that their money is not going to be tied up for a long time, let's say 3-6 months?
A typical short term investment opportunity (unlike long term that last for several years or even decades) is expected to yield return and can be turned to cash in several months or one year.

When I say return, what specific figure am I talking about? This is a big question one need to answer so you don't get greedy and decide to leave your investment for more returns, after all, the future is not certain, you have to be prudent and disciplined in your finance.
In the investment and finance world, there two types of return, positive and negative return.
When you earn a return that is less than the rate prices go up (inflation), you have a negative return while the reverse is a positive return. 

Let me explain further, the average inflation rate in Nigeria for an 11-month period in 2016 is currently at 14.13 percent (source: with recent month figure reported at 18 percent (November 2016). Also, the CBN interest rate was increased to 14 percent in July 2016, a second hike for the year after the apex bank abandoned the fixed exchange rate to allow market forces drive dollar to Nair exchange rate.

If you had invested N100,000 in a short term market that earns 14% interest while the inflation rate is at 18%, that's a negative return of -4% which would have been a positive return of +4% inflation rate is 12%. As at January, when inflation figure was 9.6%, such return was not bad for me, that's because CBN interest rate (which is the estimated return on money market securities) was around 11-12%.

Before I share the best place to put your money, I want to tell you where not to invest your money if you need the money in 3, 6 months or less than a year; stock market.

This can be individual stocks, or ETFs, even if a particular stock has recently spiked by 50% than it was last week, it's not worth it.

If you are considering investment in stock with a spare money you can follow my strategy on how to find stocks before they rise again.

Here are two best short term investment opportunities in Nigeria :

Money Market:

Money market account is a perfect alternative to saving money you would need in 3-6 months, Currently paying an interest, close to CBN interest rate on a quarterly basis, which you can reinvest to earn a compound return on your cash balance, money market instruments offers a positive return. Besides, during rising interest rate, lenders in money market make more money than borrowers.

Why not take advantage of a diversified portfolio of money market securities such as Guaranteed Commercial Papers, Treasury Bills, Bankers Acceptance, Certificate of Deposit and other fixed income investments with top rated providers like FBN quest, ARM asset managers, etc.

I have been operating a money market account with FBN capital, now FBN Quest, for 2 years, managed by professionals. Overall, they are efficient in transaction processing with a real-time account that lets you track your portfolio balance.
Find more information about FBN Quest here

Buy Dollars, Keep or Invest In Eurobond

This is a great short term investment many people do not know about. I have personally enjoyed mouth-watery return from this strategy. The idea here is not to just open a domiciliary account and buy the dollars blindly but understanding the principle behind dollar to Naira exchange rate and why the Naira has continually lost over 50% in just a year (2016), the biggest fall in 43-year history.

Read Time to cash in on another Naira fall in 2017 & Why you should make money in US dollars,, to see the reason dollar may remain stronger against our local currency.
In this first link, I shared how you would have made 94% return on your cash balance for just buying the US dollars from BDCs in January 2016, and reselling back to them at a higher rate. This is not round-tripping as that is illegal and you may be sanction for that.
On the second link, I went further to talk about earning a second income in foreign currency.
A better way to make more return is to invest your dollars (if it's above $1000) in FBN Eurobond dollar-denominated debt instrument which offers both income and capital appreciation.
While these are the two lowest risk short-term investment opportunities with a moderate return, you can as well share other ideas that you have tried and tested.