Farmland Before the discovery of crude oil in 1956 and the oil boom in the 1970s, Nigeria was known to be an agrarian economy that was remarkably booming as agriculture was her major source of foreign exchange earnings.
In view of recent developments such as the decline in the value of crude oil, incessant inflation, and the receding economy, as well as the adverse effects of the Covid pandemic on the economy, investors are beginning to make alternative and wiser investment choices.
Government organizations and private companies are making efforts to return to investing in agriculture. There is no better pointer to this than the many initiatives of CBN which show that farming is beginning to regain its lost reputation as a critical source of development for the economy.
These initiatives have given smallholder farmers better headway into accessing loans from commercial banks, which proved quite difficult to do in the past. Some reports state that there are now about 4.8 million smallholder farmers who have accessed loans through the various CBN initiatives.
In recent years, billionaires like Bill Gates, and Aliko Dangote have expressed interest in farmlands and have also invested. An instance of this is the $30 billion fund made available by the Bill and Melinda Gates Foundation to smallholder farmers in 2017.
There are a number of reasons for these investments and agricultural funds. These are the same reasons why the average investor today knows that agriculture in Nigeria has been identified as a green goldmine. Here are five reasons you should invest in farmland:
1. Limited risk
There is no investment without risk but investing in farmland offers you lesser risk. Considering that people are always going to demand food, farming would invariably stay in business. One major thing to consider when investing is the stability of the market.
The recent covid pandemic had a huge effect on many businesses as many had no choice but to shut down. This crashed many stock markets. Despite this, one thing was constant, the need for food. An investment in farmland comes with limited risks as it is backed up by stable assets which are unlikely to depreciate.
2. Farmland appreciates over time
The value of land appreciates over time. This is a significant consideration for real estate investors. How much more is the value of farmland? The value of an acre of land is several times its initial worth after a while. An acre of land that is constantly being used for agricultural purposes would yield even more.
3. The need to diversify an investment portfolio
Investors are advised to diversify their investment portfolio. The reason behind this is that if one investment plan fails, one can always fall back on another. With the current instability of the stock market, prudent investors seek other ways to improve their holdings and also increase their wealth.
Considering the increase in the demand for food and other agricultural products, it is only wise to invest in farmlands. With the teeming population and the high rate of hunger in the country and the world at large, farming would never go out of business. Farmland investment can also be seen as a way to give back to society, a key motivator for investors.
4. People always need to eat
With over 200 million mouths to feed, farming and the need for agricultural products are in even more demand. The increasing population in the nation and globally is a major factor to invest in farmland. Food needs to be produced because people are always in demand of it. Investment in farmland, therefore, capitalizes on the rise in people’s demand for food.
5. Long-term investment
We don’t know what the future holds, but one thing is sure, the demand for food is constant. Other kinds of investments might not guarantee you a long-term duration, but investment in farmland ensures this. Given the steady increase in the demand for food, farmland, investment not only guarantees a long-term investment, but also a stable asset and it makes an excellent addition to your holdings.
As a bonus point, farmland, investment is also any young person’s surefire way to build wealth and secure the future. As a parent looking to build trans-generational wealth and give your child(ren) a great financial headstart at life, a farmland investment is also the perfect choice for you.
Let us guide you through making the right farmland investment and securing profitable returns on it. Send us an email today at email@example.com to get started.