There seems to be challenges on understanding my insights on how we can unlock value from farmlands in our nation. Understand that this has nothing to do with mechanization of farmlands but purely making assets to have “velocity”. I have used that word “velocity” to indicate something that can change hands with ease at the least possible friction. I will explain this in a very simple way thus:
Let us assume that you inherited 1,000 hectares of farmland in remote Abia state. Today, Nigeria will consider you a poor person because the asset is “dead” (un-transferable and no value). Under my proposal, I will get startups to map that farmland and record it in your name. Then, they will register it in the local government/ministry of lands. They would also put the assets in a portal which can enable you to sell say 100 hectares to someone in Lagos, and the part-title moves immediately to the buyer with all powers of the state protecting that buyer. What is happening here is divisibility due to digitization of assets.
Also, you can put another 100 hectares as a collateral to a bank to get money to pay school fees for your kids and also attend to their healthcare needs. The balance of 800 hectares is documented in the ministry as assets in your name which adds to your net worth as a person.
My thesis is that by doing this, mapping and digitizing and linking that asset to you, your net worth could move from $0 (dead assets) to say $100,000 on that land. Simply, you are now worth $100,000!
By having the ability to “operate” on the $100,000 value, you have built liquidity as a person and have more capacity to borrow and spend, which boosts and drives economic growth. Banks, lenders etc will lend because they know your value is now $100,000, no more the old $0.
Understand that I have not focused on pure selling of any land to anyone. You do not even need to sell the land. You have simply unlocked the assets into your net worth. Also, you may not have planted any crops – this is not farming where we are talking of farm yields.This is purely making a class of asset which is “immobile” with no velocity to become transferable so that values can accrue to the owners. If this explanation does not cut it, contact my team. I will be happy to speak.
Nigeria has about 82 million hectares of arable land. If you put each hectare on average of $1,100, you get about $90 billion as “unlocked value”. Recording the assets easily and making them transferable, people can take loans using the lands as collateral, magically unlocking liquidity in the economy. In short, my $90 billion is pessimistic as the unlocked value could be in multiples.