Harnessing Nigeria’s creative industries
Nigeria’s creative industries (arts and entertainment) are slowly breaking new ground. New trends have led us to consider it potentially as a sound private consumption indicator. According to the national accounts for Q1 2017, the entertainment industry grew by 12% y/y. However, we emphasize that this is from a very low base as the sector accounts for just 0.3% of total GDP. Nollywood is said to be the second largest employer in Nigeria after agriculture.
· The Nigerian film industry (Nollywood) is recognised as the second largest globally and has been identified as a priority sector in the FGN’s Economic Recovery and Growth Plan 2017-2020. The industry is projected to generate US$1bn from export revenue over the next three years.
· The success of the industry hinges partly on the development of cinemas and multiple distribution platforms.
· We understand that the industry produces 50 films per week. Given the high frequency of production, the quality and content of most of these movies are variable. However, from a trend perspective, there has been increased demand at cinemas for local films which take after global standards.
· In 2015 one such movie grossed over N95m from cinema ticket sales. However, last year another movie, which captured the culture of Nigerian weddings, broke that record by grossing over N450m.
· The FGN has granted most segments within the creative industries including Nollywood conditional access to pioneer status incentives (Good Morning Nigeria, 10 August 2017). These include holidays from the payment of companies’ income taxes as well as withholding tax on dividends from pioneer profits for an initial period of three years. This duration could be extended by two additional years.
· As with most sectors across the economy, poor access to finance poses as an obstacle to sustained growth across the film industry’s value chain. The federal ministry of information and culture recently created a US$1m venture capital fund to assist with better access to finance for stakeholders within the industry.
· The Bank of Industry has launched the N1bn (US$3.3m at the official rate) Nollyfund to support film makers.
· Generally, the film industry has made significant strides. On a macro note, it has engaged the youth population and, as such, generated jobs. Furthermore, we believe that increased investment within the sector would have a significant impact on GDP growth.