Bola Asiru is the founder of Red Door Gallery in Lagos, as well as a keen art collector and patron of contemporary African art. Alongside his preoccupation supporting and mentoring young Nigerian artists, he serves as the principal for MasterCard Advisors, Middle East & Africa with a primary focus on Sub-Saharan Africa markets. His industry experience spans across the UK and Nigerian banking sectors, financial services, energy & power, publishing, transport, public sector and real estate. He has previously served as the Strategy and Operations Leader, West Africa at Deloitte and continues to write extensively and make presentations on the links between art and finance.
In this interview, he focuses on the business side of art, offering ideas for opportunities in the intersection between art and finance. He also speaks on solutions that can be provided by technology.
Following the outbreak of the Coronavirus pandemic, what predictions can you make on the future trajectory of modern and contemporary African art, and what measures can be emplaced to ensure its sustainable growth?
Regardless of the sectors we discuss, we will find some common themes with regard to COVID-19. Firstly, there is increased digitisation for customer engagement, as well as payments for goods/services. Secondly, travel restrictions and social distancing have increased the focus of the local customer and reduced dependency on international flows. There is also an increase in collaboration to deliver on customer experience. For example, the entire restaurant business would have collapsed if they did not collaborate with logistics/delivery companies to make food delivery seamless, as well as partner with digital payment schemes to provide an alternative to cash.
Based on this, it’s fair to conclude that the art sector will need to brace itself for increased digitisation, localisation of events and increased collaboration across the value chain to continue delivering superior artist/collector experiences.
Thank you for bringing up sustainability. A sector that refuses to operate within ‘professional codes’ is not sustainable in the long run. Some of these codes are not written in a rule book but all professional players know the right thing to do regarding artist/gallery agreements, authentication and provenance for example.
Other drivers of sustainability for the sector include adequate funding (both public and private sector) and an openness to embrace African modern and contemporary art as a valid asset class to drive up local demand.
What business opportunities are emerging on the African continent at the intersection of art and finance, to stabilise and enable the continued growth of the art ecosystem?
Looking at the art value chain, we have not even scratched the surface on the continent with most players just at one end of the chain—the trading aspect. There are other opportunities and gaps in terms of art writing, private (or public-private partnership) art schools, art storage facilities, art packaging/shipping, framing, restoration and documentation/provenance services. Taking a closer look at the financial aspect, Africa can do more regarding art collateralisation and insurance.
In a nutshell, wherever an entrepreneur can create real value for the artist, gallery, collector or museum, a viable business opportunity lurks.
What solutions can Art Tech investments bring to bear in such areas as logistics, insurance, contracts, legal, storage, data, standardisation, education and the new artists discovery?
Tech solutions do one thing and one thing only, solve problems and pain points leveraging digital. Every entrepreneur should ask themselves about the problems across the art value chain they are trying to solve and then find out if there is a critical mass of people willing to pay for the service. A great idea with only 100 people willing to pay a $1 subscription is not commercially viable or investable. The ideal solution solves real pain points, has a large critical mass of people willing to pay for it and can be delivered at a price point that allows for decent margins.
In the same vein, what is your perspective on the prediction that tokenization, an emerging blockchain application will impact heavily on the Art Finance sector in Africa, for example in fractional ownership that would offer the opportunity for small investors?
There are possibilities along these lines and these discussions have been going on for a while. However, for innovation such as this to truly take off, there has to be an alignment of all stakeholders particularly our regulatory and compliance pillars. I believe that blockchain as a technology is good especially as it relates to proof of ownership in the art world, however, it’s application must consider the local regulatory framework if it is to truly scale and succeed.
It is commonplace knowledge that the art sector suffers from a lack of transparency. What collaborations are essential between art and finance stakeholders to address this issue?
The key driver of transparency is not just collaboration but data. Ten years ago, there was limited public knowledge on average selling prices for a work by Prof Enwonwu or Prof Grillo. Today, because the secondary market openly shares its data with the public, there is more transparency regarding prices. Imagine if all galleries, art dealers and collectors conducting bilateral transactions were to also share their data and make it public. The transparency with regard to price and valuation would be phenomenal. Unfortunately, many dealers, galleries and collectors are private and will not share acquisition/sale data.
Data on fakes and forgeries is also critical for increasing confidence in the sector. I know that The Ben Enwonwu Foundation website has a dedicated section on this topic, but we need more stakeholders sharing similar data with the public.
I believe that data sharing is the first big hurdle to be crossed to give the finance world more confidence in the transparent valuation of art assets.
The pandemic has left in its wake dwindling corporate support. How would you advise organisations seeking such support?
Anyone seeking support at the moment must propose a collaboration of mutual benefit and also show demonstrable value to the sponsor company. Unfortunately, collaboration proposals are sometimes pitched to corporates as CSR/charity requests rather than a viable commercial collaboration where both parties benefit. My advice, therefore, is to pitch the proposals based on mutual benefit to both parties.
A consequence of the ongoing Coronavirus pandemic is increasing scepticism in financial markets and subsequently buyer apathy. As the founder of a leading Lagos-based gallery, what advice can you offer artists as they adapt to this development?
I believe the scepticism in traditional financial markets creates a significant opportunity for alternative investments such as art. My advice to artists who are not comfortable with some of the complexities of finance and investments is to collaborate with dealers or galleries that have the experience and networks in that space. However, some artists may be comfortable with the topic and choose to discuss same with collectors, which is also fine. For many years, art has outperformed the stock market in terms of returns.
This is also a good time for artists to start including resale rights in their sales agreements. It would ensure that any temporary buyer apathy experienced now can be neutralised with future revenue from secondary market sales.
