Mike van Graan, Executive Director of African Arts Institute and Programme Director of the 2013 Arterial Network African Creative Economy Conference, in his February 2014 article “African Creative Industries, The Sleeping Giant” for the African Business (Twitter) monthly observes:
World export of creative goods and services reached $592bn in 2008 – more than double the 2002 level – indicating an annual growth rate of 14% over six consecutive years. Africa’s share of the global creative economy stands at less than 1%, with the key contributors to this 1% being North African countries and South Africa.
As with minerals and other commodities, Africa is rich in talent and creativity. But, as with minerals, most countries lack the infrastructure and expertise to beneficiate this talent and creativity into sustainable, let alone, profitable enterprises.
Nollywood is the second-largest movie industry in the world – after India – in terms of the number of films produced annually. It is also the 2nd-largest provider of work in Nigeria — after agriculture — and produces about 50 movies per week with an average of 130 people employed per movie.
A recent study forecasts that the global entertainment and media industry alone injected around $2.2 trillion in the world economy in 2012. The creative industries sector accounts for 7% of the world’s GDP, growing at an annual rate of 8.7%.
The United Nations Conference on Trade and Development (UNCTAD) classifies creative industries into four broad groups: heritage, arts, media and functional creations.
These in their turn are subdivided into nine groups:
- Traditional cultural expressions – arts and crafts, festivals and celebrations
- Cultural sites – archaeological sites, museums, libraries, exhibitions, etc
- Visual arts – paintings, sculptures, photography and antiques
- Publishing and printed media – books, press and other publications
- Design – Interior, graphic, fashion, jewellery and toys
- Performing arts – live music, theatre, dance, opera, circus, puppetry
- Audiovisual – film, television, radio and other broadcasting
- New media – software, video games, digitalised creative content
- Creative services – architectural, advertising, creative R&D, cultural and recreational
The creative economy is also excellent at generating jobs and developing new skills. In the US, it contributes 11% to the GDP and provides work for over 30m people. It has a similar impact on the Indian economy. In Nigeria, said Dojoma Ochai, assistant country director of the British Council in Nigeria, the movie industry generates about $500m per year in revenue, making up 5% of the country’s GDP and 11% of its non-oil exports.
Bernard Bakaye Lubega, the Principal Culture and Sports Officer of the East African Community (EAC):
Creative industries in EAC countries are still grossly fragmented. As a consequence, the cycle of production, marketing and distribution is not complete. Uganda is in the process of developing a creative economy strategy.
Freelance film journalist, Alexa Dalby (Twitter), here:
Part of Africa’s projected 5.2% GDP growth rate in 2013 was attributed just to the popularity of Nollywood. It’s the country’s second- or third-largest employer and the third-largest film industry by value in the world after Hollywood and Bollywood, generating an estimated $500-$800m annually. It creates over 1m jobs in a Nigerian population of 168.8m; at 6%, this is almost the same percentage as the industry does in the US.
Dalby continues by adding to the direct income from the BO co-productions and overseas sales, a multipler effect that increases income indirectly, estimated in
South Africa as 2.89 times.
It is also a good source of tax revenues: for example, in 2012 the South African government received $63m in tax revenue generated directly and indirectly by the South African film industry. The world’s leading film industry, Hollywood, is based in California.
Globally, the film market generated nearly $100bn in 2012 and more than 75% of that was from movie theatres. It’s estimated Africa would need to develop 1,000 cinemas a year. In comparison, in US there are 40,000 cinemas – about 120 per 1m people; India has 20,000; China 13,000; but the whole of Africa has less than 1,000 – less than 1 cinema per million people.
Piracy is believed to account for > than 80% of distributed movies and be worth nearly $200m a year. South Africa estimates that it loses 44% of DVD revenues and 15% online.
South Africa’s film industry has internationally recognised films to its credit and an annual turnover of $300m. South Africa has signed co-production deals with eight countries and such co-productions with international companies result in the direct investment of millions of rands into the economy.
Among them are:
- Canada (1997)
- Italy (2003)
- Germany (2004)
- United Kingdom (2007)
- France (2010)
Last year, Mandela: Long Walk to Freedom was the biggest South African production ever with a budget of $35m, compared to the $1.7m average for local films. It was the highest grossing movie in South Africa. The Department of Trade and Industry (DTI Twitter), which backed the film to about $5.8m through a tax rebate system. It’s claimed it created 12,000 jobs though these may only have been short term. The DTI offers tax rebate incentives to producers, which include reductions from 20-25% for foreign films made in South Africa to 20-35% for co-productions.
The Media and Motion Pictures Strategic Business Unit of the Industrial Development Corporation (IDC), a South African state-owned development financing institution, funds film and broadcasting projects in the form of loan finance up to 49% of the total.
The Department of Arts and Culture funds production, especially documentaries.
There are 700 cinema screens [in South Africa] with a cinema-going population of 5.5m people, who go, on average 4.5 times a year. In the first six months of 2013, 95 films were released (60 of these from the US) and 10 were local films. However, there was a 50% decline in revenue y/y generated by films to $2.2m. Local films secured only 6% of the total box office revenue compared to 11% in 2012.
The legitimate market for low-budget films in South Africa is estimated at a maximum of $18.8m including distribution.
The leading independent regional banking group in West Africa and Central Africa, Ecobank, found the market potential of the movie industry in Nigeria could be at least $3.2bn a year.
Currently in Nigeria around 50 films are made a week; a typical Nollywood film has a budget of $20,000-$40,000; the largest producers make 20 to 40 titles a year; and an average film sells 50,000 DVD copies, according to iROKO Partners.
On average, producing a movie in Nigeria costs between $25,000 and $70,000, says the British Broadcasting Corporation.
The World Bank estimates that nine pirated copies are sold for every legitimate copy.
Nollywood actors’ incomes are low. Even the most popular get paid between $1,000 and $3,000 per film. Only a few can claim higher earnings. Actress Omotola Jalade Ekeinde (Twitter), who uses her Nollywood stardom to speak out about social issues affecting various African countries, recently topped the charts at 5 million naira ($32,000) per film.
Alexa Dalby again:
The Nigerian government made a $500m loan facility available for the entertainment industries under the Nigerian Creative and Entertainment Industry Stimulation Loan Scheme (NCEILS), released by the African Development Bank (AfDB). Of this overall fund, $200m is allocated to the film industry, and is packaged and distributed by the Bank of Industry (BOI Twitter) and Nexim Bank (Twitter).
Senior Manager, Entertainment, at the Bank of Industry, Mallam Ahmed Kagara, said that the role the entertainment industry is playing in the country’s economic development prompted the bank to be supporting the film industry. The money is intended to raise standards in film production, distribution, marketing and exhibition, which will place Nollywood in the international marketplace and create sustainable growth.
One successful filmmaker who has benefited from the policy so far is Michelle Bello (Twitter) of BluStar Entertainment for her award-winning romantic comedy Flower Girl (Twitter). It had a $300,000 budget, partly financed by a film-fund low-interest loan from the BOI.
A BOI loan will reportedly also enable Chief Gabriel Okoye (Gabosky) to launch a mega film distribution company, G-Media, which is hailed by many for creating a structure to improve producers’ profitability and control the market. He said the structure being built by G-Media would encourage producers to earn money through chains, that include the cinema, rentals, pay-per-view, video on demand, premiere and sales.
Ecobank has reportedly become involved in films, allocating a rolling budget of $622,000 to Project Nollywood for filmmakers to produce quality films, which was said to have generated 2,000 jobs to date in marketing and distribution. If the film industry in Nigeria is properly managed, a million more jobs could be created, wrote Rebecca Moudio in a 2013 industry overview for the UN publication Africa Renewal.
Alexa Dalby further:
Yewande Sadiku, an investment banker with over 17 years of experience, executive produced the highest-budget film to come out of Nigeria – the $8m Half of a Yellow Sun.
Global Media Alliance CEO Edward Boateng picks up from here:
Ghana’s film, music and creative industries have the potential to generate more than $500m in revenue by 2016 if harnessed correctly.
In DR Congo, despite having no film industry, director Djo Zongo won awards and achieved international distribution — including at least 19 African countries, thanks, partly to be being dubbed in Swahili — for his modest budget international coproduction Viva Riva!, shot in Kinshasa. A considerable part of its costs were covered by the European Union. Nearly $550,000 of the $2.5m of total production costs came from the ACP Films Programme. Funded through the European Development Fund (EDF). The film grossed over $160,000.
In global terms the African market is still very small – the global value of the market is put at $56bn – and there are few statistics available nationally.
Moving into the realm of art, Jean Pigozzi owns what is probably still the largest collection of contemporary African art, however Nigerian-American painter, art historian, cartoonist and curator, Dele Jegede, takes to criticize it.
NYT about Zeitz Museum of Contemporary Art Africa, the largest collection of contemporary African art on the continent.
Jean Pigozzi speaking to Artsy:
So [Carsten Höller] came to my warehouse in Switzerland, and after two hours, he said: “Okay, so let’s do it. Let’s take one country, which is Congo, and one country, which is Japan,” and we created a fabulous show. We did one in Grenoble, and then we did it at the Garage in Moscow.
And we at Steppes in Sync wonder whether Mr Pigozzi has finally visited Africa, though?
Alexa Dalby observes:
Bonhams, the internationally known London-based auctioneers, has been key in developing contemporary African art for the international market, having started its auctions five years ago and is now reaping the benefits of the effort put in.
The South African art market is worth $300m a year and has been reaching record prices with a 300% increase over the last year, though it may be stabilising now, according to the South Africa’s Citadel Art Price Index. Record price set at Bonhams – Irma Stern – Arab Priest – $5m. Irma Stern – $1.6m – second highest price ever achieved by a painting in South Africa, record being $2m.
Among recent firsts for African art:
- Angola became the first African country to have won the Golden Lion award for its Pavillion at the Venice Biennale
- In December 2013 it was announced that, for the first time, the Venice Biennale 2015 will have an African as its chief curator – Nigerian Okwui Enwezor (Huff Post interview with him), author of 2009 book Contemporary African Art Since 1980
With thanks to all who contributed to the creative economy feature in the African Business. We at Steppes in Sync look forward to the fourth edition of the Arterial Network African Creative Economy Conference.
Culture Fund concludes: Zimbabwean cultural industries are challenged by lack of research. Steppes in Sync suggests: go beyond Harare asap, watch Zimbabwe reads do the trick with Nambya and Kalanga communitiesa