Building Wealth with African Art

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By Obafunsho Adenekan

Could buying African art be a good form of investment? Or is it simply a market for art lovers who want something nice to hang on their wall? This article is for the novice art collector who seeks alternative forms of investment to build wealth over the next decade.

There is a compelling argument that African art might experience a boost similar to art pieces of Chinese origin, where newly affluent Asian professionals are driving up prices. Certainly, prices of top contemporary African artists are surging, with antique tribal pieces snapped up for increasingly high sums.

1-9Art Work by Olumide Onadipe

Yet at the entry level there are still bargains around. London auctioneers, Bonhams is holding its Africa Now sale, an annual event since 2009. Estimates for pieces go from £3,000 to £100,000 and prices have been rising in recent years.

Giles Peppiatt, director of contemporary African Art at the auctioneers, said that at last year’s sale seven wooden sculptures by Nigerian artist Ben Enwonwu, which were commissioned by the Daily Mirror in 1961, sold for £361,250: only a few years ago, similar works would have fetched in the region of £100,000. The record price ever paid for a piece of art by a contemporary African artist was £541,250 in 2012 for New World Map by Ghanaian artist, El Anatsui.

2-love-isnt-blueArt Work by Zinno Orara

Nigeria’s economy may be reeling from volatile oil and commodities prices, but prices are holding steady or rising for many of the continent’s African artists. Works by Africa’s best-known living artists often sell for less than $150,000 — the asking price at auction for works by much younger, less time-tested artists in New York.

Contemporary and Abstract African art is now the latest investment commodity, and wealthy Africans are leading the charge. There is no formula for how one can successfully invest in art, but there are guidelines and precautions one can take to minimize the risk.

The Mei Moses World Art Index, which looks at the resale values of painting, has over the last fifty years outperformed US and international equity markets.

The 2013 Citadel Art Price Index, which looks specifically at the South African art industry uses data from auction sales and plots the top 100 selling artists, examining how quickly a certain artist can sell their work and for how much. The index experienced a decline of 4.8% in the first half of 2016 having finished strongly in 2015.

lateef-1Art Work by Lateef Olajumoke

According to Prince Omoba Engineer Yemisi Shyllon (Pardon the Nigerian title craze…avoidable in some climes), who is considered Nigeria’s largest mega art collector and the founder of OYASAF (Omoba Yemisi Adedoyin Shyllon Art Foundation), with an over 7,000-piece collection tells CNN that, until recently, Contemporary African art wasn’t considered that valuable.

Engineer Shyllon started collecting art as an undergraduate at university in the mid-1970s, when it had virtually no value. “You could buy a piece of good art for 20,000 Naira [about $50 at current conversion rates]. Today it would sell for millions” he said. “I’ve studied the movement of the prices of artwork sold in auctions in Nigeria since 1999, and I can tell you how much the artworks have grown over time, of different artists — if we draw a correlation analysis we come up with a positive graph about the growth, and therefore it can form a solid basis for investment” he continues.

076Art Work by Tolu Aliki

Nigerians increasingly see art as a “status symbol and investment,” Shyllon said in an interview in his presentation room filled with paintings and sculptures. “It will get much, much bigger and then it becomes dangerous for people like me to keep works of art in my house.”

There is also a new generation of artists whose works include abstract and contemporary art are revered and the millennials can connect to. With a distinctly young population (over 50 percent of Africans are aged below 30), there is a flurry of creativity, youthfulness and beauty in the air. Artists like Tolu Aliki, Lateef Olajumoke, Olumide Onadipe and so on engage the younger demographics’ imaginative side with its mixture of color and materials to great art.

slide-05Art Work by Ibe Ananaba

More and more young Africans are creatively using art as a form of expression to capture the realities and dreams around them through painting, sculpture, carvings and several other forms of art. As a result, there is a huge supply of beautiful and unique works of African art in the market.

The aim is to purchase the works of these younger artists in their growth stage and either be a collector for resale, or to keep in a private museum.

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Author: Obafunso Adenekan

Obafunso is a chartered accountant. He started his career as an investment banker working on complex divestment transactions, capital raising, and structured debt transactions for large corporations and States in the Nigerian capital markets. He is passionate about the growth of small businesses in Nigeria. Obafunso currently lives in Lagos with his family.

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About The Author

Obafunso Adenekan
Obafunso is a chartered accountant. He started his career as an investment banker working on complex divestment transactions, capital raising, and structured debt transactions for large corporations and States in the Nigerian capital markets. He is passionate about the growth of small businesses in Nigeria. Obafunso currently lives in Lagos with his family.

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