The Value of the Nigerian Entertainment Industry

Fri, Mar 28, 2014
By publisher
8 MIN READ

Guest Writer

By Roberts Orya  |

PULL Quote: “Nollywood is getting set to take over the world. I recognize the role of entertainment in the Nigerian economy and this government will support an industry that makes Nigerians happy. I have given them direct order to make sure entertainers have $200 million worth of loan to work with. Make more movies, write and produce more hit songs, provide jobs and give hope to our people.”

—  President Goodluck Jonathan

It bears similarity with Hollywood. A number of Nollywood actors and actresses are destined to superstardom before they attain the middle age. It is not about instant fame and fortune. But by sheer productivity and masterful performances, actors and actresses become veterans before they attain the golden age. Musicians even tend to operate across generations. The reason for these is the entertainment industry does so well in harnessing the power of youth.

A lot is feared about the demographic structure of Nigeria, for now and for the future. By current estimates, the Nigerian population has over 100 million people under the age of 45. Will this army of young people find gainful employment today? If they don’t, how are they to vent their energy? From, say the year 2054, when the potential demographic dividend of today will yield to something of an inverted pyramid population structure, what percentage of private and public resources would be required to support the pension system and care for the aged?

Fiscal Relief

First, let’s take a close look at the last question. Most artistes across the genres of entertainment are early starters. They start to contribute to the GDP at relatively young age. Their careers prop a broad range of economic activities that define the entertainment industry value chain. Because artistes remain economically active in their old age, and some of their past works gain even greater value much later, they hardly pose any burden on government or society. Instead, they keep both together happily. Furthermore, outside of policy-making and regulating the industry, entertainment is a sphere of activities for the private sector. It is not a place where huge pension liabilities will accrue to the government. Therefore, the growth of the entertainment industry does not pose corresponding additional burden on fiscal management.

Indeed, the entertainment industry has been growing in leaps and bounds in the last decade. Nollywood has risen to number two position (behind India’s Bollywood) in the global film markets, in terms of volume of production. In revenue, Nollywood is third, behind Hollywood and Bollywood. Nollywood produces about 50 movies per week. Current estimates put its annual revenue at an impressive $590 million. Africa Renewal, a publication of the United Nations, reported in its May 2013 edition, that the African film industry (in which Nollywood is by far the dominant), would contribute significantly to the expected 5.2% GDP growth projection for the continent last year. Euromonitor International and Reed Exhibitions, the organisers of the World Travel Market, a global event for the travel industry, were cited by Africa Renewal saying that the Nigerian film industry will continue to drive domestic and regional tourism.

The entertainment sector is job-rich. It is now reputed to be the second highest employer of labour in Nigeria after agriculture. Characteristically employing pools of young people with diverse skill sets, the Nigerian film industry alone currently employs more than one million people.

International Interest

In the earlier part of its history, Nollywood struggled to attract the interest of funders. It basically relied on angel investors and personal finance of a few people within the industry to maintain production. Then, its distribution infrastructure was hijacked by pirates and other agents of unauthorised distributorship. Today however, the industry is raising a new breed of savvy entrepreneurs whose exploits have internationalised the movie industry. One of them is 33-year old Jason Njoku of Iroko Partners, who was recently listed by Forbes as one of “top 10 young African millionaires to watch.” His firm with offices in Lagos, London and New York, distributes Nollywood and Ghanaian films and music. Seen as Africa’s version of Netflix, Iroko Partners attracted further $8 million in funding last December to boost its on-demand video platform and drive it toward profitability in 2015.

With the rising funding profile, several Nigerian actors and actresses have starred in international films. Some of the Nigerian films have been shot in exotic locations outside the country. One of the exponents, Genevieve Nnaji has been a guest on the Oprah Winfrey Show. Omotola Jalade-Ekeinde is currently a Goodwill Ambassador of the United Nations. In the music sphere, Femi Kuti has received two nominations for Grammy Award, while 2Face Idibia and D’banj are winners of MTV Music Awards. Around Africa, Europe and America, Nollywood actors and Nigerian musicians are showcases of the abundance of raw talents in Nigeria, and how we are a people that is up and doing. Africa Magic channel on DSTV (Digital Satellite Television) is about the magic of the Nigerian creative zest and industry capacity; no pun intended.

Less than a decade ago, it was almost unthinkable that a local Nigerian musician would collaborate with international stars. Today, such collaborations are commonplace. U.S. mega stars Kanye West and Snoop Lion have worked with D’Banj and Don Jazzy, while Senegalese-American star Akon has signed Tuface Idibia, P-Square and Wizkid as the African representatives of his record label, Konvict Musik. Apart from signing a lucrative deal with SONY Music Entertainment, D’Banj’s was recently unveiled at the African Union Summit in Addis Ababa as the Ambassador for ONE Campaign, an advocacy that calls African governments to commit at least 10 per cent of national budgets on agriculture investment.

Nigeria’s Kings of Comedy, Ali Baba, Basketmouth, Julius Agwu, AY, among others are also celebrated across Africa and beyond. Basketmouth and Julius Agwu have individually organized sold-out shows at the O2 Arena, United Kingdom. Apart from having sold-out performances at home and abroad, video and audio recordings of comedy shows have also become huge sources of revenue for these comedians.

Harnessed Demographic Advantage

Nollywood bubbles with the energy of youth. The predominant genre of the Nigerian music ruling our airwaves is youthful. That means perfect symmetry with the huge Nigerian youth population. The population universe of 170 million people provides a big market for retail of entertainment products. At the same time, businesses tapping the huge Nigerian consumer market, especially the mobile network operators (MNOs) and food & beverage, are propelling Nigerian entertainers to new levels of financial success with incomes from endorsements, Caller Ring Back Tones (CRBT), etc. In effect, Nigerian youthshave the right motivations for success in the examples of the stars that grace our television sets and rule our airwaves.

When cinemas arrived in Nigeria, much of the movies that moviegoers were treated to came from Hollywood, Chinese and Indian films. However, over the last decade, Nollywood films have become staples of Nigerian cinemas. This experience has further deepened the cinema culture in Nigeria as Nollywood film producers and directors, with considerable investments in both equipment and training, have significantly improved the quality of Nigerian films.

The Nigerian entertainment industry has invalidated the excuse of poverty as a reason for the youth to operate in the underworld of crime. Many music stars and comedians have emerged from poor neighbourhoods, including Mushin and Ajegunle, twosuburbs in Lagos. We therefore hope that the demographic dividend that is associated with the Nigerian population structure will be realised. The threat of a large youth population, which will turn against the larger society because of lack of the right motivation and opportunities, therefore diminishes.

Presidential Vision

It is to the credit of the vision of President Goodluck Jonathan that he made the connection with the entertainment industry as early as 2010 when he succeeded late President Umaru Musa Yar’Adua. On November 6th of that year, he announced an intervention fund for the entertainment industry. He expressed his vision for the industry and commitment to growing it with these words. “Nollywood is getting set to take over the world. I recognize the role of entertainment in the Nigerian economy and this government will support an industry that makes Nigerians happy. I have given them direct order to make sure entertainers have $200 million worth of loan to work with. Make more movies, write and produce more hit songs, provide jobs and give hope to our people.”

This show of foresight, and the consequent recognition of the body of artistes by Mr. President, with the audience he granted the industry stakeholders, was thought to be an election gimmick ahead of the 2011 presidential election. Assuming that was the case, it would mean that the youth, given their visibility in the entertainment industry and their career successes, have become a critical bloc in the Nigerian political calculus.

However, soon after his election in 2011, Mr. President kept his promise. He has continued to renew his commitment to the industry.

The Nigerian Creative and Entertainment Industry Stimulation Loan Scheme (NCEILS) was launched with the funds pledged by Mr. President. Having facilitated the drafting of the operational guidelines for operating the Fund, and as the trade policy bank of the Federal Government, the Nigerian Export-Import Bank, has managed it.

NEXIM Bank flagged-off funding support for the Nigerian movie industry with its first film financing facility for the production of “Dr. Bello” Movie on Saturday, April 21, 2012 at the Radisson Blu Hotel in Lagos. The Bank has since been providing funding support for the improvement of distribution infrastructure/platforms and establishment of new digital production studios.

 

Roberts Orya is Managing Director  |  Chief Executive Officer, Nigerian Export-Import Bank

— Apr. 7, 2014 @ 01:00 GMT

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