Naija to the World
Naija to the World
Four development Lessons from the growth of the Nigerian creative industry
There is no doubt that the growth of the Nigerian creative industry (by which I mean the film and music industry) has been one of the great stories about the country in the last decade. The roots of this growth are sunk deep into an admixture of things that happened much longer than a decade ago (they go back to at least the 1990s). But my measure of success here is that the Nigerian creative industry is now firmly a cultural and economic export. Several respectable international awards now have an ''Afrobeats'' category, Nigerian artists now tour and sell out shows at huge venues abroad, and Nigerian films are among the top offers on big streaming platforms like Amazon's Prime Video and Netflix.
Although the economic value of the creative industry is yet to be rigorously quantified, there are still some ways to go for Nigeria to be compared to South Africa or a true creative juggernaut like South Korea. However, what lessons does the rise of Nigeria's creative industry offer on economic development? I have a few in mind.
Cities Still Matter
One of the themes that stood out to me while watching the Afrobeats documentary on Netflix was the importance of cities. All the talented people who contributed to the renaissance and commercialisation of the Nigerian creative industry always move to cities like Lagos and Abuja to pursue their dreams. This was also true of previous generations of artists that came before them. The cheapest means for talent to meet opportunity is in a city. What makes cities great is that they attract talented people looking for opportunities and businesses seeking bigger markets - making cities the natural economic engine for prosperity.
Continuous investment in city planning and building is what keeps the engine running. This engine breaks down when cities creak under the yoke of governance failure and dysfunction. The problems that plague our cities like lack of density and infrastructure, homelessness, slums, police brutality, and insecurity have significantly raised the cost of opportunities for talented young people. For the creative industry to keep creating value and jobs - our cities must be a suitable habitat for the necessary investments for further growth. This is as true for the creative industry as for others. You cannot build fast-growing industrial or service economies if cities are in a poverty trap and unproductive.
Migration
The discussion of migration is very often quickly hijacked by ''brain drain'' fundamentalists. However, the evidence is overwhelmingly on the side of migration as being a net positive. One such positive effect can be seen in the growth of the music industry. The Nigerian diaspora stirred the winds that started the waves that now carry the export of Nigerian music everywhere. This was not easy, because having a diaspora community does not mean an established captive market. Artists, investors, promoters, and other creative entrepreneurs worked tirelessly to create that market.
Many of these early risk-takers could have been better rewarded if Nigeria had a more coherent foreign and trade policy, but they have shown that Nigeria does not have to lose when Nigerians move elsewhere and that the Nigerian diaspora is more valuable than talks about funneling remittances into government coffers. The debate on migration needs to shift from what we are losing to how to make more of everything. We also need to build a stable economy and a predictable legal and tax system - so that collaboration between local entrepreneurs and the diaspora can be better institutionalised
Technology
In the concluding chapter of her brilliant book How China Escaped the Poverty Trap, political scientist Ang Yuen Yuen had an excellent overview of the evolution of Nollywood that is worth quoting extensively:
Social scientists typically associate Nigeria with poverty, state failure, endemic corruption, and oil-derived wealth for the few. It is rarely noticed that Nigeria has produced the second-largest film industry in the world, behind Hollywood and ahead of Bollywood in terms of production volume. From its humble beginning as low-budget movies produced by amateurs and sold informally in the Alaba market of Lagos, Nollywood has generated US$800 million in revenue as of 2013, making it the second-largest export sector after oil. Unlike the oil industry, the fruits of the movie industry are widely spread through job creation for millions of Nigerians, especially aspiring and creative young people. It is also prized among viewers throughout Africa and the African diaspora as a conduit for telling African stories. In recent years, the industry has attracted millions of dollars in foreign investment and even Hollywood actors. Half a Yellow Sun, which made its debut on global markets in 2014, starred Oscar nominee Chiwetal Ejiofor from 12 Years A Slave. The success of Nollywood has spread to other African countries, inspiring an emergent Gollywood in Ghana and Riverwood in Kenya.
She went on to describe how the movie industry was revived after over a decade of political and macroeconomic turbulence - and technology is central to this story.
In 1992 the moribund industry was unexpectedly revived by a confluence of regional technological shifts and one entrepreneur’s enterprising idea. The early 1990s was a time when markets in Asia were actively replacing VCDs and VHSs with new technological devices. These obsolete products were cheaply exported and sold to Nigerian traders, one of whom was named Kenneth Nnebue. After he purchased a large shipment of blank tapes from Taiwan, Nnebue thought that if content was added to the tapes, they would sell better. So, investing his own funds, he made a video titled Living in Bondage, a story about a man who sold his soul to witchcraft in exchange for wealth, described as “the first movie to ever depict modern Western Africa through Nigerian lens.” The video became a blockbuster, selling more than 750,000 hard copies, which Nigerians could watch in the relative safety of their homes. This success inspired numerous others to follow, launching a new era of film production in a home video format.
Given rampant piracy and the absence of formal distribution channels, how could producers turn a profit on projects in which they had invested their own money? The answer was to make movies quickly and cheaply and then distribute them widely through informal channels. Even by the 2000s, Nollywood movies were produced with as little as $15,000 and churned out in approximately a week. Filmmakers sold their movies directly to traders (known as “marketers”) stationed in the major electronics markets. Movies were copied onto blank discs and then sold through the marketers’ informal networks, including to homes and small parlors, where movies were shown for minimal fees. Pirates ripped off releases in about two weeks, so movies had to be sold in large volume at great speed in order to outrun piracy.
Even though the industry did manage to adapt and survive, the cheap cost of making cassette tapes and compact discs meant piracy was a persistent problem. Despite several raids on Alaba and Idumota by industry associations and police - it looked like incorporating pirates as distributors was inevitable. This made it difficult for the industry to consistently attract institutional investment - because the revenue stream was just too volatile.
The proliferation of the internet, personal computers, portable music players, and smartphones did not look promising at first. The ease with which music and movies could be distributed for free made many wonder whether the industry could ever really support artists and repay investors. It is fair to say that the arrival of streaming has changed the game. This is a greatly simplified history of the technological evolution of distribution in the Nigerian creative industry. But the important thing to note is that not many could have predicted where things are today. Technological innovation that kickstarted a new phase in the growth of the industry also made piracy a significant threat to it, but continuous technological innovation has paved a new path to create value and kick off a new growth phase. The lesson here is it is hard to predict the impact of new technology, however, history suggests that the overall is usually positive. Policies that discourage innovation and technology adoption are bad in the long run.
Joey Akan of Afrobeats Intelligence has a video on X about Nigeria’s creative music underclass that is worth a watch.
Domestic Value Chains
The growth and export of Nigerian creative arts will inevitably raise questions about how much value is being captured locally. This has been a persistent problem with most African economies - many of which struggled to produce more high-value products from the natural commodities they have. Relevant to the creative industry is that other high-value parts of the industry are located outside the country.
Investor and filmmaker, Naz Onuzo, gave a good example on his blog and proposed a solution:
I just finished making my way through One Piece, the latest Netflix Global hit. As I’m not a big anime guy, it wasn’t really a title I was familiar with before the announcement of the adaptation. My anticipation for the show actually grew when I read the Netflix Social Impact Report. It turns out that One Piece was shot mainly in South Africa, the report went on to say that almost $80m of the shows budget was spent in SA. To put it in context, that is 4 times the total amount spent in Nigeria over a 5-year period. Just imagine the significant impact that spend had on the local film and television economy in SA. We talk a lot about building out the creative industry. Every government gives lip service to how much of a priority this is. However there is literally one thing the government should do: sign co-production treaties with major markets such as US, UK, Canada and South Africa. We can talk about other initiatives, and they are all good, but if you want global production dollars you have to sign co-production treaties that have tax advantages.
A mid-budget Hollywood production can create up to a thousand jobs in the U.S. alone, but Nigerian filmmakers and artists even on an increased budget struggle with sourcing production equipment, safe locations, safe roads for touring, and event venues. Things may change as the industry keeps growing towards more investment and institutionalization - and Naz's proposal (and others like it) may work wonders. I am not an expert here but my point is that investments (public and private) that help the industry capture more value locally will create a lot more winners. Despite fears that the global growth of Afrobeats is creating an ''underclass'' (see Joey's tweet above) - I think the internet and the distribution means it has spurred, is a positive by lengthening the tail of talent discovery.
The next thing is a deeper structure where talents do not always have to rely on making hits or ''blowing'' before they can survive on their creative works. In short, we need to do the same things we have to do with cement, crude oil, agricultural produce, and mineral resources.
Stop relying on the raw stuff alone and upgrade.