After fish, say Cape Verdeans, music is their nation’s greatest asset. Said to have the highest number of musicians per mile in the world, the streets of the West African archipelago teem with guitarists and bands – and numerous carnivals and festivals pull in (or at least they did, until the pandemic) the tourist euros and pounds.
Across Africa in recent years, the creative sector – not just music, but film, fashion, performing arts, publishing and gaming – has been booming. Largely a domestic industry employing African talent, it has benefited from the growing demand of a burgeoning young and urban middle class for home-grown content, and is underpinned by an explosion of digital platforms and deepening internet penetration.
‘Digital platforms and tech have changed the game by advancing opportunities through social media’
Take Nigeria. Billed as one of the world’s culture capitals, the country is synonymous with a robust film and music industry that has attracted significant investment. 'Nollywood' is bested only by Hollywood and Bollywood for output and value. The 2,000-plus new feature-length movies it churns out a year generate US$600m and employ 300,000 people directly (plus over a million indirectly), putting movie-making second only to agriculture in terms of labour force. Ghana, Kenya and Cameroon are among the countries trying to replicate that kind of success.
South Africa’s film industry is another continental frontrunner, contributing US$35m to annual GDP. The rainbow nation is a preferred African destination for international film-makers, while its music industry is expected to turn over US$178m in revenue in 2020.
Drags on growth
Of course, it’s not all good news. Fast as the creative sector has been growing in Africa, it could be growing even faster. It accounts for just 1% of an industry valued globally at US$2.2 trillion. Uncoordinated value chains, underinvestment, old-fashioned policies and weak enforcement of intellectual property laws continue to choke off much needed revenue. Nollywood alone loses US$2bn to piracy each year, with corruption and poor enforcement of copyright laws fuelling a thriving black market. This in turn contributes to a talent drain that has robbed the continent of some of its most prolific creatives.
Creative startups also point to a tough operating environment and lack of government support as major drawbacks.
Jeffrey Wilson, founder of Kenyan fashion and design business JW Show, says: ‘Even as the African creative industry continues to record huge milestones in job creation, economic growth and exports, players are still operating under a prohibitive policy regime characterised by, among other problems, high taxation. In my sector, taxes on fashion-related products and services are punitive and adversely affect our businesses and the entire value chain in the industry.’
Global magnet
Nevertheless, music and film in Africa have caught the world’s attention. Major record labels such as Sony, Universal and Warner have expanded into the continent, opening subsidiaries, acquiring African record labels and signing artists. Global streaming entertainment and production behemoth Netflix has invested in Nollywood and is striking partnerships elsewhere with local creatives, commissioning original content that could catapult the continent’s film-makers to global stardom.
In short, the industry is now a key contributor to African economic growth, a position reflected in the African Union's choice of theme for this year's Africa Day: ‘Arts, Culture and Heritage: Levers for Building the Africa We Want.’
Digital tailwind
Much of the success can be attributed to technology advances. Increased internet penetration, the proliferation of digital platforms, more bandwidth and affordable data pricing models all work in the sector's favour.
PwC’s report, Insights from the Entertainment and Media Outlook: 2019–2023: An African perspective, reveals that by 2018 digital revenue was already constituting the bulk (or close to it) of total entertainment and media turnover in five African nations. In South Africa it accounted for 49% of total turnover of US$9,172m, in Nigeria 75% of US$4,467m, in Kenya 53% of US$1,815m, in Ghana 82% of US$1,206m, and in Tanzania 60% of US$598m.
The same PwC report forecasts that revenue from music streaming will reach US$57m by 2023 in South Africa and US$5.2m in Kenya. Meanwhile, Digital TV Research predicts that video on demand subscription numbers in sub-Saharan Africa will hit 10 million by 2023.
‘Players are operating under a prohibitive policy regime characterised by, among other problems, high taxation’
Music and entertainment publicist Anyiko Owoko says: ‘Digital platforms and tech have changed the game by advancing opportunities through social media, which makes the whole world a village. A lot of creatives have been discovered globally, thanks to going viral via social media.
‘Many African countries are also benefiting from mobile money transactions and digital banking, giving the industry the financial power to transact in real time and even take loans with just a click of a button. This has revolutionised financing and made it easier for small creative businesses to flourish faster.’
Custom finance
With the sector long seen as a high-risk investment by traditional lenders, alternative sources of funding have become a lifeline. African Export-Import Bank, for example, set up a US$500m credit facility last year that will target African cultural and creative products over the next two years.
And Nairobi-based Heva Fund – the first African fund to target the creative and culture industries – has offered financial support to 10,000 creatives and 50 businesses operating in fashion, digital content and TV, live music and gaming value-chains. Heva has also made US$1m in debt financing available to assist businesses during the pandemic.
For its part, the Central Bank of Nigeria, alive to the pivotal role of the industry to the economy, has partnered with other financial institutions to offer favourable loans to businesses in the sector. And Nigeria’s Bank of Industry’s Nollyfund extends advantageous financing terms to the film industry.
Cape Verde meanwhile has also been operating a financing facility for the creative sector since 2012, with a culture bank lending capital to budding creative entrepreneurs.
The way forward
As governments grapple with the fallout out from the pandemic, the creative sector may not be top of the spending agenda. But if the investment and infrastructure barriers can be demolished, the industry could make a welcome dent in the continent’s endemic unemployment problem. And with the pandemic threatening to rob Africa of 20 million jobs, according to the African Union, anything that tips the employment balance should be encouraged.
