House Debate: Is Art investment?

By McPhilips Nwachukwu
One question that defiled answer at last week’s art forum organized by the Ben Enwonwu Foundation in collaboration with new art destination house, The Wheat Baker, The Art Exchange Limited and The New Awakening was whether art collection, which for many art lovers came as a hobby could  become an investment platform in the  present global economy.

This question became very necessary when viewed in the light of recent reports and development around global art activities concerning the over all contributions of the creative industries to the  gross domestic product of world economy.

Quoting the United Nations Conference report on Trade and Development, UNCTAD 2010, Linda Naiman in an article titled, Creative Economy Report 2010: Creative Industries are stimulating economic recovery sourced from the internet, noted “that  global exports of creative goods and services more than doubled between 2002 and 2008.” The total value of these exports reached $592 billion in 2008 and the growth rate of the industry over that six year period averaged 14%” the report is quoted to have  revealed.

According to this report, “ the global market economy already had boasted by increases in south-south trade in creative products before the recession sets in. The South’s exports of creative goods to the world reached $176 billion in 2008, or 43% of total creative industry.”

Importance of creative industry

From left: Giles Peppiat, guest lecturer, Amb. Aurthur Mbanefo, Chairman of the occasion and Engr. Yemisi Shyllon at the event.

With this startling and encouraging revelations , no serious economy will want to  undermine the importance of creative industries, which the visual art plays a vital role. In developing economies like Nigeria, where  total dependence on a mono product has exposed the country’s economic strength to  unsettling  instability, all hands must be  on deck to evolve a supporting  and alternative economic platform for the nation to lean on for survival.

It is perhaps  on the  recognition of all of this, that the organizers of the forum decided that it was time  art market was looked into properly to ascertaining  whether it offers any investment future in the elitist  business of art production and collection.

Held at  Ikoyi, Lagos based, The Wheat Baker, the forum apart from having, British born Giles Peppiat, director of Contemporary African Art at the International Auction House, Bonham as Guest Speaker, also paraded all known art patrons and connoisseurs including: Eng. Yemisi Shyllon, Foluso Phillips, Sandra Mbanefo- Obiago, Femi Akinsanya, Frank Okonta, Robert Mbonu, Hebert Wigwe,  Rasheed Badamosi, Torch Taire and Arthur Mbanefo, who chaired the occasion.

Unanimously, all the speakers agreed that interest in art came to them first, as hobby and that the issue of business remains secondary, and  in most cases was not even contemplated while the works are being collected.

As  Investment  banker, Femi Akinsanya would put it,” selling the works would amount to one selling his own children. Can  parents sell their own children?” As emotional as Akinsanya’s submission sounds, it didn’t remove the fact the creators of work of art should earn a living from their practice and that it is only through” networking, sales and acquisitions” that  a thriving art market economy can be sustained.

“Art has to change hands. There must be a large number of people willing to acquire or buy and sell  art works.” He said.

Having said that , Akinsanya, employing his wealth of knowledge in investment banking and art collection  educated prospective art buyers on the need to uncover  “ works of art of peak creativity and to as well, develop deep knowledge of the artist and his artistic philosophies” as some of “ the determinant factors that help in evaluating works of art.

While acknowledging the possibility of investment value in art, avid collector and  patron, Engineer Yemisi Shyllon raised the critical question of preservation and storage  as some of the constraints that may impede this presumed emerging    market.

According to Shyllon, the state of an art work speaks volume about its   value attachment and pricing. Lamenting about lack of “ standing “national galleries and museums in the country, he wondered what would happen to the nation’s public and private collections in the case of death of their collectors.

Apparently referring to the global

impact of the creative industries to world economy as revealed by 2010 United Nation’s UNCTAD report, Sandra Mbanefo-Obiago  complained that Nigeria has not taken seriously the development of cultural industries as vital platforms for the  re-engineering of the national economy.

Citing the globally accepted Fela in Broadway show as a typical example of how cultural products can be cashed in to generate wealth, She  therefore appealed to government, banks and investment institutions to invest in creative industries arguing that since , “ there is an oil and gas desk, mines and solid minerals, transportation etc desks in the banks, there should be  a creative desk in our banks as well.”

Speaking to the theme of the forum; Art as an Investment, Bonham’s auctioneer, Giles, while acknowledging like previous speakers that interest in art derives out  of hobby adventure, however provided supporting and more practical insights into how the emotionally edifying hobby of art collection can transform into  mega business venture.

For this to happen, Giles suggested the need for an in-depth knowledge of the work to be acquired  as well as development of  participatory interest in such art fora like exhibitions, auctions and seminars where works of artists are sold,  exhibited and discussed.

“ Try and research the provenance of existing works in your collection. This information can have a dramatic effect on the sales prospects of any work.” He said.

Also to sustain this investment platform, Gile further suggested the establishment of an investment fund to help strengthening investors exposure to the asset benefit of arts.

According to him, “ the rapid rebound of the global art market since 2010 and its continuing strength in these troubled financial times has provided fertile ground for the formation of art investment funds that look at art solely as an asset class and seeks to provide investors with exposure to the benefits of appreciating market.”