Reasons Why You Should Invest in African Art Today

African artworks are making headlines as they are now featured in almost every auction house and art gallery all over the world. This is an indication that the art world has finally begun to see the value in African art, especially classical and contemporary art pieces, which many are moving mountains so they can get their hands them.

While we all know that art is a form of communication that helps capture messages or emotions to people without the use of words, as it allows artists to express themselves, experiment with creativity, and demonstrate an understanding of the world around us, there is also an opportunity where the artist and investors alike, can make money through capital appreciation of these art pieces, because they are known for gaining value over time.

Now that we understand that Art investment is sustainable and could bring strong returns, especially during times of economic hardship, African Art especially has proven to be an emerging market that is expected, by many experts, to be a game changer. According to a survey done by ArtTactic, 70% of the respondents believe that the strong interest in the young generation of African Artists has fueled the highest auction sales of work by modern and contemporary artists from Africa following the stall due to the global Covid-19 pandemic.

Here are a few reasons why you should invest in African art:

The Potential for Exponential Growth

Looking into ArtTactic’s, “Modern & Contemporary African Artist Market Report 2016–2021,” which provides a unique insight into African art sold globally, including the auction results from Sotheby’s, Christie’s, Phillips, Bonhams, Piasa, Strauss, and ArtHouse Nigeria, it revealed that the African art landscape is still at its infancy compared to other markets and has the potential for exponential growth.

The report explained that the sales of work by African art creatives surged by 44.1% in 2021, reaching $72.4 million in sales compared to $50.2 million in 2020. This is the highest total ever for the African Modern and Contemporary art market and shows a 20.4% increase in average art prices and a 19.7% increase in the number of lots coming to the market in 2021. When you compare these figures to other markets, it shows there is the potential for exponential growth when it comes to sales and interest.

Also, the report stated that the young Contemporary African creatives market also set an all-time high in sales, generating $24.9 million in 2021, a surge of 121% in comparison with 2020. Female representatives participated with 40%, and the majority of the sales, around 80%, went through Post-War and Contemporary auctions in New York, London, Hong Kong, and Paris between 2016 and 2021.

Return on Investments is Similar to that Seen in the Cryptocurrency Space

We all saw what happened with cryptocurrency investments in 2021 with tokens doing as much as 10,000% return on investments as investors flocked in to get their hand on cryptocurrency tokens. We can expect this level of return in the future in the African art scene. In fact, we are already seeing it.

Beyond the NFT boom in the cryptocurrency space, ArtTactic’s report revealed that NextGen artists took the central stage at auction houses. With no auction results before 2020, Amoako Boafo (b. 1984) became the highest-selling African artist last year, with $8.5 million in auction sales. The second place in 2021 is taken by Jacob Hendrik Pierneef, with $4.3 million, and El Anatsui with $4.1 million. The report stated that in the group of young artists, 8 out of the top 11 saw their first auction sales in 2020 and one in 2021, generating $21.9 million. The top lot last year was Amoako Boafo’s Hands Up, which sold at an auction in Hong Kong for $2.8 million.

With the young already profiting greatly from their works, it shows that the potential of returns you can make on an African artwork is almost limitless because of the endless possibilities that exist in the space as the market continues to grow.

A Hedge Against Economic Downturn

It is no news that inflation has been on the lips of everyone, both in developed and emerging economies. Just yesterday, the U.S. announced that its Consumer Price Index, an inflation tracker, recorded 8.5%. Looking away from developed economies, the inflation rate in emerging economies is in double figures and there is fear that these figures will not be easing anytime soon.

Due to these worrying factors, investors are now looking for ways to hedge their assets against these economic conditions and Art investments have a track record of sustaining wealth during market and economic downturns.

Contemporary Art has demonstrated strong appreciation in high inflation periods. According to the Masterwork.io chart, contemporary art has offered an annual return of 13.8% over the last 25 years, as of December 2020, versus a 10.2% annual return from the S&P 500. Art has a higher appreciation rate and low correlation to more traditional investments, meaning it is unlikely to rise and fall with those assets. Citi Private Bank calculated the long-term correlation coefficient of 0.12 between art and the S&P 500 Index, which is a very low correlation. This is why contemporary art is crucial in diversifying financial portfolios and managing investment risk.

Across all periods of human history, art has easily exceeded inflation, is long regarded as an investment of passion, and offers potential economic benefit. Even with the current conditions, the art market has seen a total of $5.7 billion in sales so far this year.

Conclusion

Now I am sure you are interested in buying artworks and you may have heard that it is capital intensive. Not to worry, with ARTSPLIT, you can own a piece of Contemporary African Art pieces for as little as $1.

ARTSPLIT is an art trading technology company driven by one common goal; enhancing the investment status of African art by allowing users to co-own rare and valuable artworks on a platform that guarantees price discovery and market liquidity. ​

To learn more about the platform, send an email at info@artsplit.com or visit www.artsplit.com. You can also call or WhatsApp our mobile at +234(0)9088962169 and follow @artsplitofficial on Twitter, Instagram, and Facebook.