Mark Essien: How to become rich in a time of a dying Naira

The Naira is falling down! For those who don’t know – the Naira, Nigeria’s currency used to trade at N160 to a dollar. It was very stable for a long while, and then shortly after the oil prices started falling, the Naira started falling. The Naira has now dropped to N330 to the dollar, and it continues to fall.

Falling oil prices internationally, a slow-down from China and shaky stock markets means that we are about entering interesting economic times.

And interestingly, many fortunes are made in such times. So how can you profit from this?

There are two key benefits to a weak naira: imported goods become very expensive, and if you export goods you can be earning 3x as much as you would have otherwise.

For example, an imported ice-cream cone that used to cost N1,500 will now cost N4,500. If you can sell a locally produced version for N3,000, you are much cheaper than the alternative.

How do you profit from this?

There are two main methods:
1. Produce goods locally to sell locally that are currently imported
2. Produce goods locally for exportation

Producing Locally to sell locally

Common commodities that are currently imported are going to become very expensive. There are certain high end products that the Lekki returnees purchase a lot. For example Nutella. Find out how to produce a local version of it. Start selling at half the price of the foreign one.

To produce locally, you will need to import a bunch of machines. The Federal Government currently subsidizes this by offering cheaper dollars to buy such machinery. Even if you cannot access that subsidy however, you will still be able to recover the capital many times over that you invest in buying the more expensive machines.

Things you could produce locally: Phone Chargers, Inverters, Deep Cycle Batteries, Phone Cases, ACs, Mini-Fridges…

Producing for Export

One of the main money spinners will be goods produced for export. Nigerian production has now become quite cheap, meaning it is getting competitive in the foreign market. For anything where there are raw materials available in the country (e.g palm oil, mangos, ore), it will be much cheaper to rely on local staff to refine those material into goods that can sold on the foreign markets.

Wages tend to constitute a large part of the cost and since the price of that has dropped significantly, you have a great opportunity to sell abroad and earn a lot of money locally.

For software specifically, the cost of production in Nigeria has dropped because software cost is 95% salary cost. Software is also very easy to sell globally.

What you should NOT be doing right now

There are some terrible business models for right now:

1. Do not try to sell to the local market things that are dependent to a large part on a country-external workforce
2. Do not sell something internally which is produced outside the country
3. Service based businesses will stagnate for a while. Now is the time to focus on improvement pending a future recovery