In an effort to shore up funding for Nigeria’s thriving entertainment industry, financial experts in the country have urged the integration of Nollywood into the capital market. This call was echoed at the Capital Market Correspondents Association of Nigeria 2023 workshop themed ‘Leveraging Capital Market in Financing the National Development Plan.’
During a panel discussion at the event, Mr. Folagbade Adeyemi, Head of Ecosystem Integration at VFD Group, highlighted the remarkable growth achieved by the media and entertainment sector in Nigeria despite limited funding. He emphasized the need for structures to be established in the capital market to support and drive the entertainment sector.
Adeyemi noted the substantial compound value per person in Nigeria’s entertainment sector, ranking even higher than that of South Korea and India. He urged the market to create frameworks that would facilitate the integration of the entertainment industry into the capital market, stressing the importance of regulators in providing the necessary frameworks for such integration.
“The truth is, Nigeria, South Korea and India probably have the highest compound value per person in this sector. Nigeria has the highest currently compared to the amount that we invest per capita which is $15 and we see much work.
“The next to us is India, which is about $45 per capita, then South Korea. These are major hubs on entertainment and media, and not only does it come with its own product, it also comes with its own value chain.
“There is a growth in that space, we just haven’t created structure for it and until we can create structure around it, we won’t actually see significant returns.”
To address financing challenges, Adeyemi proposed exploring fund-type structures or securitization frameworks based on royalties and assets. He emphasized the historic disconnect between the entertainment sector and the core of the economy, citing a recent acknowledgment and promise of integration by Vice President Kashim Shettima.
“I think the onus is on the market to build structures around driving entertainment. As much as possible, the regulator is there to create a framework for safety and structure but ultimately, if you look at the west and you look at the east, typically, there are different ways to drive entertainment into the market.
“I think the market has to work on offering different structures that the regulator will review, endorse and then ultimately push.”
Responding to these proposals, Mr. John Briggs, Deputy Director at the Securities and Exchange Commission, Lagos Zonal Office, expressed the Commission’s openness to providing a regulatory framework tailored to the unique needs of the media and entertainment sector.
Adeyemi also underscored the importance of focusing on bringing younger generations into the capital market, citing the success of fintech in mobilizing the last mile. He highlighted the need to tap into the potential of the younger generation to drive progress in the financial sector.
Nollywood, recognized globally as the second-largest film producer, plays a significant role in Nigeria’s Arts, Entertainment, and Recreation Sector. Contributing 2.3% (N239 billion) to Nigeria’s GDP in 2016, the industry was identified as a priority sector in the Economic Recovery and Growth Plan, with a target of $1 billion in export revenue by 2020. However, challenges such as financing, infrastructure, copyright infringement, distribution, marketing channels, taxation, and capacity must be addressed to propel Nollywood to its next phase of growth.
