A lot has been said and ‘prophesised’ about Nollywood’s burgeoning future, but the question remains whether most of these promises are far-fetched, or indeed, within the grasp of Africa’s biggest movie industry.
According to a report in 2014 by the United States International Trade Commission (USITC), officially Nollywood still generates, on average, $600 million annually for the Nigerian Economy, with most of these figures coming from the African diaspora. It also estimated that over one million people are currently employed in the industry (excluding pirates), which makes Nollywood Nigeria’s largest employer of labour after agriculture.
In recent years, recognizing the film industry’s huge economic potential, the Nigerian government has worked with international groups and has set aside public funds to support the industry. For example, in 2010, the World Bank identified Nollywood as a leading non-oil sector and included it as part of its Growth and Employment in States (GEMS) project, disbursing up to $20 million to aid the industry’s growth.
Also, in 2011, then president of Nigeria, Goodluck Jonathan, pledged a $200 million government loan for the film industry, and in March 2013, announced a $17-$18 million grant called “Project ACT-Nollywood,” to back training and skills acquisition for film production and distribution. Although the current administration has paused disbursement of these funds, it is still worthy of note.
A Fruitful Export
Nollywood has since been identified as a “fruitful export for Nigeria”. In the words of Chioma Nwagboso, a World Bank Finance and Private Sector Specialist, “without initial support from the government, Nollywood propelled itself to the position it occupies today, and a little lift could take the industry to even greater heights.”
It is that ‘little’ lift that is very much needed.
Already, Nollywood films have a large following in Africa and among African emigrants around the world, over 30 million (as at 2014) worldwide and growing. Improved technology, digitization and increasing demand for licensed streaming video content (iRoko TV, Netflix and the likes) from local and foreign audience are also helping to boost production budgets and overall film quality, and inversely increasing Nollywood’s market and revenue opportunities.
Nollywood needs a Financial Makeover
According to Nigerian Film Producer and Financier, Yewande Sadilku, “Nollywood’s popularity across Africa and the diaspora certainly demonstrates the capacity of the films to travel, but the industry is in desperate need of a financial makeover.”
The first Nollywood film to debut in American movie theatres, Dr Bello, was supported by a $250,000 production loan, a miserly figure compared to the $250 million average cost of most top Hollywood films. According to the BBC, the average Nollywood film in recent times cost between $25,000 and $75,000 to make.
These movies go on to generate quite decent revenue numbers, mostly breaking even and making profit in many cases. Now, imagine how much revenue could be achieved if just a little more is added to the average Nollywood film’s budget.
The Wedding Party released late last year, shattered the records and became the first Nollywood film to gross about half a billion naira in box office sales within just 2 months of its release. Other remarkable efforts like AY’s A Trip to Jamaica, 76, and The Arbitration, already shine a light on a path set before the industry. What is required are more believing investors, private and public, to partner with the industry to break new grounds.
Nollywood is already said to release an average of 50 films a week, but that really doesn’t matter if they are not well done and do not translate to significant returns and profits.
Of course piracy remains a major threat to the industry’s growth and should be a major focus for the industry’s financial makeover. According to the National Bureau of Statistics, of the industry’s over $3 billion valuation, less than 1 per cent was tracked from official box office sales and royalties. The rest were attributed to pirated reproductions sold cheaply. Hopefully, with promising moves to digitize the industry’s produce, Nollywood stakeholders can begin to enjoy proper value and return on investment.
Clearly there is a lot of money to be made from this industry, it’s staring us in the face. If more people invest in Nollywood and enjoy good returns, we will yet see a Nigerian industry, other than oil, boom like never before.
An edited version of this article was previously published in Accounting and Business, the member magazine of ACCA (Association of Chartered Certified Accountants)