The nation’s film industry is believed to have the potential to aid the diversification of the economy. This explains why President Goodluck Jonathan provided a $200 million (about N300 million) intervention fund for the creative and entertainment sector. But, almost two years after the fund was announced, only one film, Doctor Bello, has benefitted from it, writes VICTOR AKANDE
The figures are encouraging. Nigeria’s economy grew by 6.28 per cent in the second quarter of this year and inflation fell for the second straight month in August. The GDP growth in Africa’s second largest economy climbed in the second quarter, up from 6.17 per cent in the first quarter.
According to statistics released last week by the National Bureau of Statistics (NBS), the growth is driven by the non-oil sector.
“The non-oil sector was driven by growth in activities recorded in the building and construction sector, while oil sector output decreased (compared with Q2, 2011),” the NBS said in a report.
This is despite the fact that the oil sectr accounts for more than 80 per cent of Nigeria’s revenue and about 95 per cent of its foreign exchange earnings.
The search for alternative sources of growth and foreign earnings made the Federal Government to consider the country’s film industry, poularly known as Nollywood.
The reasons for this are not far-fetched: In the last four years, it has consistently churned out over 2,000 films. In 2008, 2,408 films were produced; In 2009 recorded 2,514 films; and 2,621 films were produced last year. Nollywood, as the industry is known, is ranked first in the world in quantum and third in revenue generation, with receipts over the years estimated at between $300 million to $800 million.
Little wonder researches have taunted it as a viable non-oil sector money spinner for the government.
But, it is generally agreed that for the industry to realise its potentials, the government must offer some stimulus. So, it was good news when in November, 2010, President Goodluck Jonathan announced his administration’s decision to float a $200 million revolving loan scheme for the industry.
Two months away from now, the announcement will be two years. Stakeholders in the industry are agitated over access to the fund. Only one producer, Tony Abulu, has been able to access the fund through the Nigerian Export and Import Bank (NEXIM) for the production of of his Doctor Bello.
NEXIM is one of the approved banks for the management of the fund.
The film is billed for a world premiere at the John F. Kennedy Centre for Performing Arts, Washington, United States on September 27.
Some practitioners in the sector have questioned why Abulu, who lives in the United States, should be the first to access the Nigerian Creative and Entertainment Industry Stimulation Loan Scheme. Many have described the process of accessing the facility as too technical. Others believe the collaterals are cumbersome to meet.
Veteran filmmaker Dr. Ola Balogun believes the bank has a ‘hidden’ agenda. Balogun, in a piece entitled: ‘NEXIM: What agenda?’ doubts the bank’s understanding of the industry to channel the fund properly.
Balogun said the government’s interest in the art and entertainment sector can better be advanced through grants or film funds rather than a loan. He said there is no nation that conducts cultural policies by requiring artists and cultural workers to queue up in banks for loans.
He said that in the US, support for the arts is conducted through foundations and through state-supported entities such as the National Endowment for the Arts.
Balogun faulted the process that subjects artistes to the rigours of filling forms access loans. He said artistes are not businessmen, experienced n such financial technicalities.
A former consultant to the National Film and Video Censors Board (NFVCB), Mr. Yinka Ogundaisi, expressed shock when NEXIM unveiled Abulu as the first beneficiary of the scheme. He said: “I myself had issue with the same NEXIM when, to the consternation of all of us, it announced the support to fund the film, Doctor Bello by Tony Abulu.”
Ogundaisi said he later discovered that NEXIM had its valid reasons for picking the Abulu project, adding: “Despite the misgivings, we should at least praise Dr. Roberts Orya for doing something rather than sitting on the fence”.
He added: “NEXIM’s core mandate is to promote indigenous products for export. The epidemic level of piracy now tormenting Nigerian movies has made it suicidal for any fund provider, especially a bank, to commit their funds into either its production or distribution.
“Yet, NEXIM must find a way to achieve its core mandate, which was why the bank decided that if there is no indigenous Nigerian movie that can be safely promoted for export, they might as well create one as a model, hence their funding support for Tony Abulu’s film meant for distribution offshore. But all the same, a Nigerian product that NEXIM can associate with and tout as the evidence of achieving their mandate.”
Why it is difficult to access the fund
NEXIM Bank’s Managing Director Roberts Orya said most Nollywood filmmakers could not access the fund because they lack auditable business structures. He said although the mandate of the bank is to generate inclusive growth, the project remains a loan scheme, which must yield returns.
According to him, the total interest to be charged on any loan facility granted under the scheme is within the single digit. These are charged on the basis of tenor and assessed risks which include 7.0 per cent – 7.5 per cent (under two years); 7.5 per cent – 8.5 per cent (between two years and five years); and 8.5 per cent – 9.0 per cent (between five years and 10 years).
Orya said the question of why Abulu should be the first beneficiary is a mere sentiment that does not go well with business.
He said: “Any company in Nigeria can benefit from the facility, provided it is legally registered and incorporated in the country; operates in the entertainment and creative industry; not owned by government (federal, state or local); and it is not an oligarchy business interest that may interfere with content policy for its own interests.”
He noted that there is a gross violation of intellectual property rights, resulting from ineffective Intellectual Property laws. He highlighted other challenges, which include low production for theatrical releases and cross-border co-production arrangements; lack of adequate digital production and distribution infrastructure to exploit the new media and digital distribution platform; inefficient andunstructured distribution marketing outlets both domestically and internationally; poor corporate structure and book-keeping culture; and inadequate exhibition and theatrical infrastructure, which, he said, is 0.36 screens per million populations.
Nigeria has less than 60 modern screens in multiplexes, located in five cities, compared to India’s over 13,000 screens translating to 12 screens per million people.
“This is partly to address the historical reluctance of commercial banks to engage the segment by showing that FGN credits, properly channelled to the segment, can be serviced and repaid thus hopefully setting a precedent that banks will directly adopt as their liquidity positions improve,” he said.
Ogundaisi described as worrisome thatmany players in the industry cannot develop viable proposals, a development blames for their inability to access the fund.
Unlike Balogun, he sees nothing wrong in artistes writing proposals. He said: “All they (NEXIM) require is a viable business proposal. Now, this is a challenge that I believe we should focus our attention on for now. I am aware that proposals on infrastructural development which require their funding support is already with them to study and react to.
“I would suggest we allow the next few weeks to indicate whether Dr. Orya’s public pronouncements to support all viable business proposals in our creative and entertainment industry are for real or just another way of politicking.”
Significantly, NEXIM, a co-manager of the fund which also has the Bank of Industry (BoI) holding the domestic investment edge, said it is committed to helping the growth of the industry. It said more movie makers would benefit from the revolving loan. Orya said the fund represents a significant commitment by the government to the creative segment of the economy. Besides, partnering with the beneficiaries would not only attract a broader international market, but also put to rest, insinuations that the fund is open to box office heavy weights.
