BREAKING NEWS, Business
The Nigerian Export Import Bank is breaking the ice in financing Nollywood, a sector of the economy that is growing steadily and contributing to the country’s GDP growth. Before now, practioners in the sector were having difficulty in accessing loans from the banks
| By Maureen Chigbo | Jun. 30, 2014 @ 01:00 GMT
THE Nigerian Export Import Bank is leading the way to prove that finance institutions in the country should start financing the entertainment industry. This is against the background that Nollywood is ranked third globally among other creative and entertainment industries in revenue, with receipts over the years reported to range between US$300 million and US$800 million in the recent past. As at today, NEXIM’s total funding support to the industry comprises N662.24million disbursed to seven beneficiary clients and N811.00 million awaiting disbursement to seven other beneficiary projects.
In its funding intervention, NEXIM extends loans to eligible companies in the value-chain within the creative arts and entertainment industry under the Nigerian Creative Arts and Entertainment Industry Facility Scheme. The bank’s role in financing the creative arts and entertainment industry is two-fold – providing funding intervention to loan beneficiaries and developmental support/strategic alliances through capacity building and events sponsorships.
On its developmental support role, NEXIM’s contributions are essentially towards ensuring that the industry operates in a structured manner and within global best practices and standards. To this effect, it had, over the past months, developed draft operating guidelines to enhance stakeholders’ access to loan facilities with inputs from both practitioners and regulators. It has commissioned a study to review the industry, develop and recommend the best financing programme and instruments for the Nigerian Entertainment Industry based on Bollywood financing experience.
NEXIM has also sponsored capacity building programmes, events and film festivals to showcase Nigeria’s creative talent and develop human capacity. The bank‘s collaboration involved the establishment of strategic partnerships with key stakeholders like the National Film and Video Censor Board, the Nigerian Film Corporation and the British Council. The bank has also engaged in strategic partnerships and sponsorship supports of some creative and entertainment industry events for marketing, advocacy and capacity building programmes, which were intended to create awareness, build capacities, facilitate monetisation of intellectual property and proprietary assets as well as showcase Nigerian talents.
According to NEXIM, the events and programmes include the Zuma Film Festival, the 10th Nigerian Video Music Awards; the 9th African Film & TV Programme EXPO; the Nigerian Booth at the Cannes International Film Festival 2012; the African International Film Festival, the 1st National Policy Dialogue on the Development of the Creative/Entertainment Industries in Nigeria and the 1st Annual Nollywood Edition of the Hollywood Black Film Festival. NEXIM has also facilitated strategic partnerships, exchange of ideas and information sharing towards enhancing dialogue and critical issues resolutions toward improving support to the industry.
Moreover, it has participated and facilitated training and capacity building programmes organised by the Association of Movie Producers, AMP, the Yoruba Film Producers and Video Marketers Association and Motion Picture Practitioners’ Association of Nigeria, MOPPAN. It started policy dialogues with development partners, relevant regulatory and statutory institutions in the entertainment value-chain on ways of improving industry framework/structures on issues relating to access to finance, intellectual property/copyrights, risk mitigating instruments. Some of the organsations are the Export – Import Bank of India, the National Insurance Commission, NAICOM, the Nigerian Copyright Commission, NCC, and the Nigerian Insurers Associations, NIA.
NEXIM’s funding interventions thus far were for various entertainment value chains like the distribution and exhibition infrastructure, digital studios and digital equipment as well as film production. Total approval to these activities is N1.11Billion while only N662.24 million has been disbursed. The first movie financed by the bank, Doctor Bello, was premiered in Washington D.C. on September 27, 2012, at the Kennedy Center, Washington D. C; followed by premieres in Nigeria (Lagos/Abuja), South Africa and London, the United Kingdom, in November 2012.
NEXIM’s visionary support to the creative and entertainment industry must have been influenced by an UNTAD report which showed that world export of creative goods and services grew at an annual average of 14 percent between 2002 and 2008. It reached a peak of $592billion in 2008. This was in contrast to the drop in international trade by 12 percent in 2008, following the global financial and economic crisis. During the recession, the creative economy continued to thrive as people continued to go to cinema and museums, listen to music, watch videos and TV shows and play video games. The global film and entertainment industry generated about US$90.6 billion revenue in 2010, while revenue was projected to increase to US$102.7 billion in 2012. Most of these revenue streams are largely from theatrical distribution, with North America contributing the largest market share of about 40 percent. Europe, the Middle East and Africa account for 24 percent, Latin America, 20 percent and Asia Pacific, 3 percent.
The Nigerian film industry is widely adjudged as the most prolific in the world with consistent production of more than 2,400 yearly titles in the past three years – 2,408, 2,514 and 2,621 in 2008, 2009 and 2010, respectively. Provisional data in 2011 from the Nigerian Films and Videos Censor Board, NFVCB, showed that 1,743 and 1,234 movies were respectively registered and approved. The percentages produced in 2010 in the main languages were 44 percent, English, 31 percent Yoruba, 24 percent, Hausa and Ibo, 1 percent. Nollywood films rights are predominantly exploited through Home Video – CDs and DVDs releases and Cable and Satellite broadcast rights.
Despite Nollywood’s high prospects, the industry still faces some challenges that are militating against the full realisation of its potentials. These include very low production for theatrical releases and cross-border co-production arrangements; inadequate exhibition/theatrical infrastructure currently at 0.36 screens per million population. Nigeria currently has less than 60 modern screens in multiplexes located in five cities namely Abuja, 15; Lagos, 17; Port Harcourt,14; Enugu, five, and Uyo, six. This, when compared with India, is one of the lowest in the film market, with India having more than 13,000 screens translating to 12 screens per million people.
Other problems afflicting the industry include lack of adequate digital production and distribution infrastructure to exploit the new media and digital distribution platform; gross violation of intellectual property rights/ineffective Intellectual Property laws; inefficient and unstructured distribution channels cum marketing outlets both domestically and internationally; low access to structured finance and funding support to enhance production quality and access to new major markets like the US, Europe and Asia and poor corporate structure and or records and book-keeping culture.
The way forward for the Nigerian film industry to leverage and benefit from the available financing schemes requires enforcement of intellectual property rights, ensuring that revenue streams are identifiable, and verifiable, introducing industry guarantee fund and instruments to assuage challenges relating to access to finance, especially by small companies and start-ups; design and issuance of policy instruments by the insurance industry like completion bond and asset valuation of collateral – property, equipment and or intellectual property.
If these are done by all the stakeholders in the industry and finance institutions, there is no doubt that Nollywood will continue to grow to contribute its quota to the economic and GDP growth in the country. The recent rebasing of Nigeria’s GDP by the National Bureau of Statistics in April showed that the Nigerian movie industry accounts for N853.9 billion or 1.2 percent of the GDP. To encourage sustainable entrepreneurship in the industry which is popularly known as Nollywood, the federal government in April said it was considering giving it tax breaks in specific areas as well as the building of a strong distribution network that will ensure that practitioners are not denied their just rewards due to the activities of pirates.Tags: African Film & TV Programme EXPO Bollywood Cannes International Film Festival Chioma Ude Financing Hollywood Black Film Festival Home Video Katrina Kaif Nexim Nigerian Export-Import Bank Nigerian Video Music Awards Nollywood Omotola Jalade-Ekeinde Rita Dominic Robert Orya Salman Khan Zuma Film Festival