Investing, in broad terms, is putting money to work for a period of time in some sort of project or undertaking in order to generate positive returns (i.e., profits that exceed the amount of the initial investment). It is the act of allocating resources, usually capital (i.e., money), with the expectation of generating an income, profit, or gains.
As thoughtful investors, people often find ways to add to their assets. Some prefer buying stocks in companies, some crypto, some gold, some bonds and other things that people can invest in. There is one that everyone is familiar with by eating meals everyday, wearing clothes and a lot more: Agriculture.
Farmland investment offers a unique avenue for diversification within an investment portfolio. It’s an asset class that combines both tangible value and the potential for consistent returns.
Here are some reasons why investing in farmland could be a strategic choice for investing in Nigeria’s future:
- Population Growth and Food Demand: Nigeria has a rapidly growing population, which is expected to continue increasing in the coming years. This demographic trend can lead to increased demand for food, putting pressure on agricultural production. Investing in farmland positions you to benefit from this increased demand for food products.
- Agricultural Potential: Nigeria has diverse agro-ecological zones that are suitable for various crops and livestock. The country has the potential to produce a wide range of agricultural products, including grains, fruits, vegetables, and livestock. Investing in farmland allows you to tap into this potential and contribute to food production.
- Import Substitution: Nigeria currently imports a significant portion of its food to meet domestic demand. This makes the country vulnerable to price fluctuations in global markets and currency exchange rate fluctuations. By investing in farmland, you can contribute to reducing the dependence on imports and strengthen the country’s food security.
- Value Chain Opportunities: Investing in farmland doesn’t only involve cultivating crops; it can also involve various stages of the agricultural value chain, including processing, packaging, and distribution. Developing a robust value chain can create additional income streams and contribute to the overall growth of the agricultural sector.
- Job Creation: Agriculture is a labor-intensive sector. Investing in farmland can create employment opportunities, especially in rural areas where job opportunities might be limited. This can contribute to poverty reduction and economic development.
- Hedging Against Inflation: Farmland investments can act as a hedge against inflation. Agricultural products often have intrinsic value and tend to rise in price with inflation, providing a measure of protection for your investment.
- Long-Term Investment: Farmland investments are typically considered long-term investments. While they may require upfront capital and ongoing management, the potential for consistent returns over the years can be appealing for investors looking for stability.
- Environmental Considerations: Sustainable and responsible farming practices can have positive environmental impacts, such as soil conservation, water management, and carbon sequestration. Investing in farmland allows you to support such practices and contribute to environmental sustainability.
- Owning farmland in Nigeria gives one a sense of belonging and deep connection to one’s roots even if you travel out of Nigeria. It also gives one sense of deep connection between one’s personal fortune and the progress of Nigeria.
As much as investing in farmland is a very good way to diversify portfolio and a smart way to invest in Nigeria’s future there are a lot of factors to put into consideration some of which are; market accessibility, soil type(for those willing to venture into agriculture), weather and climate risk, and most importantly, the security of the land. You need to ensure that there are no disputes over the land and this is where Hastom as a company comes in.
At Hastom, all our farmlands are problem-free and you can be guaranteed that you have a land free from disputes.
Before investing in farmland in Nigeria or any other country, it’s important to conduct thorough research, assess the local context, understand the risks involved, and seek advice from experts in the field. Diversification of your investment portfolio and consideration of your risk tolerance are also crucial factors to keep in mind.
