Investment In Agricultural Property as a Catalyst in Nigeria (A Case Study of Orumba North L.G.A Or Anambra State)
Investment as giving up of a capital sum now in exchange for the benefits to be received in the future takes an indefinite number of ways, ranging from non-property operation as in case of banks and building society, stock and shares, units trust, debentures, insurance policies, property bonds to property investment operations such as investing on land or building (real estate).
- BANKS AND BUILDING SOCIETY
This type of investment is regarded as the safest form of investment being risk free with little or no management problem. The investors deposit their money in the bank and other financial institutions.
This yield some interest which compares favorably with ideal investment since invested capital is quickly and cheaply recouped if required.
STOCKS AND SHARES
Stocks and shares are acquired by purchasing on equity in quoted / unquoted enterprise. A small part of the company is in fact purchased, the size and part ownership being represented by the relationship between the shareholding bought and the total number of issued shares in the company.
The advantage about investing in stock and shares is that they are generally marketable. Hey can be sold simply by giving a telephone instruction and the transaction can be completed in hours.
UNIT TRUSTS
This came into existence in order to reduce the risks to the ordinary investor by giving him the opportunity ot spread his investment over a number of companies.
The advantages of this type of investment operation are the increase in the security of capital and probably the security of income this enables the investor with limited resources to obtain an interest in a wide range of companies.
DEBENTURE
This is a loan issued to companies form private investors thus providing alternative avenue to companies ot raise loans instead of going to a bank or other financial institutions.
Debentures are very safe investment and are therefore, desirable investment to limited investors when Chief concern is not to loose their capital. It provides the investor with a steady and reliable income flow at a known rate of interest quoted by th company if the company is healthy.
INSURANCE POLICIES
An insurance policy is taken out to provide cove against the loss which could arise on the occurrence of an unlikely and undaunted event; which it is obviously hoped will not in fact occur. A premium is paid to the insurers who agree to pay certain sums of money on the occurrence of the event insured against the full details depending upon the terms of the policy.
PROPERTY BONDS
This enables an investor to get insurance cover and an interest in property shares at one and the sometimes, the importance of the property element that many investors have in the past regarded property and consequently property companies as being one of he safest and most rapidly growing types of investment tables. The sources of property bonds depends ot a very large extent upon the quality of the management and as the quality of the bonds manages and he quality of property investment approaches will determine the quality of property bonds.
LAND AND BUILDING (REAL ESTATE)
This is meant on investing in a land for sale and building. The difference between this type of investment property and others mentioned above (non property) derived form the unique characteristics of the property market.
From the options discussed above the investor order to carryout and investments that appeal to him must assess it in consideration of he following fundamental general principles of investment:
i Security of capital
ii Security of income
iii Liquidity of capital
iv Regularity of income
v Cost fo purchase and sale
vi Divisibility of Holdings
vii the ease of purchase and sale
viii The security in terms and capital appreciation prospects.
2.3 PROPERTY AS IN INVESTMENT
Property as in investment is the interest and right an individual or groups of investors have over land or building properties may be in terms of freeholds, short or long leaseholds, ground rents, offices, shops, farms (agricultural property) warehouses, factories etc.
Each of these interest or type of property will have features which makes them more or less attractive to investors, depending upon circumstances and the requirements of the particular investor. Real property or estate has been very good investment unlike other forms of investments. Several features of property investment made it good over other. Investment operations which needs the employment of professionals such as surveyors and solicitors. The amount of capital required to buy property is high which is not often to buy shares. Property values appreciate with time and property is therefore usually in good hedge against inflation. The yield on property investment is generally higher than other forms of investment. it normally does not consist of large but a series of smaller markets, each of which is local in nature yet the knowledge of property transactions.
Moreover, property investment is prone to interference in the form of legislation by governments while every tract of land a legal description e.g other legal backings of property investment like rent, control, taxation of development gains, betterment and rating of properties and other change on property.
2.4 INVESTMENT IN AGRICULTURAL PROPERTY IN NIGERIA
Investment in agricultural property in Nigeria is not advanced as that of development countries like Brazil, Denmark, USA etc. unlike in this country where investment is mainly on cash crops livestock, fisheries and a very little on wood land in the said Western countries where both the government and individuals invest in the mentioned properties.
Most of the major investments in Nigeria are owned by the government and her agents. For instance, the creation of some parastatals such as he various development agricultural projects (ASADAP), the various river basin development Authorities throughout the federation, state owned farms etc.
The okotiti pupa oil palm project which is sais ot be one of the largest in Nigeria is owned by he Ondo state government. The emphasis placed on agricultural property investment in recent times, has made many individuals and some Nigerians to —-*******much interest in the venture various government programmes and policies on agricultural property investment has made this venture very attractive because the government have realized the nature of our economy and have known the attractions attendant to investment operation in agricultural properties. Some eminent Nigerians that have invested on agricultural properties includes former president Olusegun Obasanjo who is he owner of Temperate Enterprises Ltd, Ota, Ogun state.
Major General Emmanuel Adisoye poultry and animal husbandry farms at Okene, Kwara state, former Chief of army staff, major General Shehu Yar Adua of Sambo farms, Kaduna, United Trading Company (U.T.C) Guinness Nigeria Ltd, International Breweries ltd, Ilesa breweries and a handful of others in the said investment.
Moreover, the study area, Orumba North L.G.A. Is enjoying both small and large scale agricultural property investment operations.
