Friday, 24 May 2013

A Closer Look at the Nigerian Entertainment Fund

Inaccessible Fund
 king Sunny Ade Olu Jacobs

By Yemi Olakitan
      The Nigerian entertainment industry is said to be the fastest growing in the world. A UNESCO report says the movie industry has overtaken American Hollywood and closed the gap on Indian to be the global leader in the number of movies produced each year. It is said to be the third largest in the world and creates jobs for about 200,000 Nigerians in addition to over I million indirect jobs within the supportive trades and industries. However, the sector faces many challenges such as lack of infrastructure, poor funding, and piracy among others.
     In an attempt to save the industry, President Jonathan on Saturday November 6th, 2010, directed that entertainers have access to $200 million worth of loan. The Honourable Minister of Finance at the time, Mr. Olusegun Aganga, confirmed the provision of US$200,000,000 (two hundred million dollars) Special Entertainment Fund. The Bank of Industry (BOI) was appointed the custodian of the Fund, while the Lagos Business School was to provide Entrepreneurial Capacity Training for beneficiaries. Application to access the fund opened on January 17, 2011.  Borrowing from the Fund was to attract single digit interest rate. Practitioners/applicants were to visit Bank of Industry website (  The Entertainment Fund was eventually split between the Bank of Industry (BOI) for Entertainment capital projects, and the Nigerian Export-Import Bank (NEXIM) for movie production projects. The questions are: is the fund having the desired impacts on the industry? Are Nigerian entertainment practitioners able to access it? How effective is the strategy of releasing fund to solve the myriad problems facing the industry? 
      Only recently, the Federal Government announced another fund, a N3billion special grant at a dinner, marking the 20th years of Nollywood at the state House, Marina, Lagos. In the words of President Goodluck Jonathan, the grant was a continuation of his assistance to an industry which he said could surpass oil and gas as the nation’s highest source of revenue.  However, there are complaints in some quarters’ of the inability of entertainers to access the entertainment fund. Many who believed that the promise of the fund was a political tool in the hands of the president still on to their belief?
       “Do you know what great trouble that money has caused the industry?” asked Olurotimi Aina Kusoro, CEO, High Waves Video Marts, Wuse, Abuja. “There are some people in the industry that are superstars; the Amaka Igwes, the Zeb Ejiros, the Jide Kosokos and the Adebayo Salamis (Oga Bello). If these people have not been able to access this money, then nobody in Nigeria can access it”, he added. He said, “the money is not kept in the office of the presidency, but attached to a bank called the Bank of Industry (BoI), when you go there; they ask you for your mother’s coffin, receipt and other funny documents. How many Nigerians have lands and other such properties as collaterals?” he asked, ‘‘it is an abstract money or better still, money on paper. If the money meant for the ministry of education could be on paper, how much more money meant for the entertainment industry?” he concluded. Investigations in the Federal Capital Territory [FCT] chapter of the Actors’ Guild of Nigeria revealed that many of them are angry with the Federal Government for their inability to access the fund, ‘‘ some big actors were pursuing the money before they met a stone wall and withdrew’’, said Victor Maji, a children entertainment producer. Francis Duru, a prominent actor simply said he was not interested in the fund’’
     Star actor and former president, Actors Guild of Nigeria, AGN, Mr. Segun Arinze was full of accolades for the President, he commended him for his commitment to the development of the industry saying it is the first time the nation is having such an entertainment friendly president. ‘‘Previous presidents have not shown such interest in the industry, we have built our industry without any form of government support. You can imagine what we can achieve if the Federal Government continues to support us this way, we need them to do more,’’ he said. On why stakeholders’ complaints of their inability to access the entertainment fund, Arinze said the stringent conditions of the banks are responsible for it.  For example, we need an entertainment bank specially catering to the needs of the industry so that when one is in need of fund. You can go there; other banks consider the entertainment sector a high risk business. There is no industry without risk. In our business you cannot lose, at worst, you get your money back. We need infrastructures government should build cinemas. We don’t have enough infrastructures that can help us to maximize our potentials’’ he said.
     In the words of acclaimed Film maker, Tunde Kelani, the Federal Government is putting the cart before the bull.   ‘What they need to do is to put the infrastructure in place before they provide the fund. The infrastructure is not in place and this makes it difficult for an investor to recoup its investment. I did not bother to apply for the fund because it is a loan and not a grant. I cannot use bank loans to make films, when the infrastructure that would help me to make the money back is not in place. I have been making movies for more than five years now; I have not recouped my investments. We are suffering from the worst piracy attacks in the history of global movie making. The problem is a lack of infrastructure. Nigeria has about 15 cinemas while the United States has about 10,000 cinemas all over that nation. Nigeria, with a population of 170million people would need at least 2,000 cinemas to be able to do well in the industry. The situation is not encouraging. The federal government should build infrastructure and set mechanisms in motion to check the activities of pirates in the industry. Only a total restructuring of the sector would do, without that, it would be difficult to make it.  This is why I will not apply for that fund until the government does its part. I do not want to die before my time’’ he said.
  Most of the Stakeholders interviewed say that making loans available would not be sufficient for the industry to excel. They identified the problems of the industry as poor enforcement of copyrights or, intellectual property rights, a loose and uncoordinated market system, an undefined distribution channel, piracy, poor government support and lack of infrastructure. Iconic musician King Sunny Ade said that piracy remained the biggest problems in Nigerian entertainment. This, he said, was responsible for the disappearance of foreign record companies such as EMI and Decca from the Nigerian music scene. According to him, these record companies could not cope with high level of piracy in Nigeria and government inability to reduce it. Piracy is the reason banks do not want to invest money in entertainment and why foreign investment continues to elude Nigeria in that sector.
     Actress Joke Silva also lamented the lack of infrastructure and high level piracy activities in the industry ‘‘When Hollywood releases a movie, it goes to over 3,000 cinemas immediately. We cannot do that. Our distribution system at the moment is so informal and it is difficult for investors to take us serious.  How many cinema screens do we have? We have about 20 compared to thousands that other industries of the world have. Video as our first window of opportunity, with a distribution system that is so porous, pirates are having a filled day. Until we have a well-regulated, worldwide distribution network. We cannot grow beyond this. In a chat with Visual arts critic Tajudeen Sowole, he said, most Nigerian artistes cannot meet up with these stringent requirements since the Nigerian entertainment industry, looking at the high level of poverty among Nigerians. Nigerian artistes have continued to complain about their inability to access the fund. Many do not have the collateral. According to Sowole, only the very big players will be able to access it. Perhaps, the government should move a step forward by setting up a Nigerian Entertainment Council that would be responsible for the regulation and control of the industry so that the problems of piracy, uncoordinated distribution system could be eradicated. The present situation where piracy reigns and Nigerians entertainers cannot maximize the benefits of their creative investments will not enable them access the fund.
    However, at a session held by the World Bank held in September 2011, with some top players in the industry, CEO of Film House, Kene Mkparu, revealed how he had secured part of the $200m entertainment fund for the sector. He revealed that he had secured a facility good enough to build eight cinema houses across the country. As at July 2012, cinema specialist, Kene Mkparu, MD and Founder of Film House was set to launch the first four of the eight cinemas he received funding for from the $200 million intervention fund. The cities selected to host the first four cinemas were Surulere in Lagos, Ibadan, Asaba and Calabar (Marina Resort cinema). Film House, the first organisation to benefit from the $200 million intervention fund from the Bank of Industry, had submitted a plan to have 25 cinemas within a time frame of six years.  The four cinemas were to showcase facilities such as digital 3D, ice cream stand, cafe, luxury seating and surround sound.
     Similarly, Black Ivory Communications became the first Nigerian company to benefit from the $200 million entertainment intervention scheme managed by the Nigerian Export and Import Bank (NEXIM). Announcing the flag-off of Black Ivory's movie production, Doctor Bello, at a press conference held at Radisson Blu Hotel, MD and Chief Executive of NEXIM Bank, Mr. Roberts Orya said the partnership symbolized the flag off of NEXIM's support for movie production, with the production outfit being its first beneficiary.Doctor Bello, is a compelling story about the struggle to cure cancer and how Africa probably has found the cure to the dreaded disease. A transcontinental movie, Doctor Bello, features a handful of stars like Isaiah Washington, Jimmy Jean Louis, Genevieve Nnaji and Vivica A. Fox. The managing director of NEXIM Bank acknowledged that the movie proposal Doctor Bello qualified for the NEXIM Creative Arts and Entertainment Facility because the storyline tells a compelling story that can sell the movie globally and guarantee significant profit. The distribution of the movie was handled by the US–based Film Association of Nigeria (FAN).  Doctor Bello was directed by Nigerian-American, Tony Abulu, with some 30 years experience in movie production. He has produced and directed movies such as Back to Africa, American Dream and Crazy like a Fox.
     In a report from NEXIM bank, it claimed that seven entertainment companies have benefited from the fund and over forty formal requests and applications have been received to date. NEXIM says that no applicant has failed in their requests to obtain the loan since many of the applications are currently been reviewed and further documentations are either requested or expected. The bank maintained that applicants who meet its criteria will be able to access $100Million of the fund in its care. The bank says that its role in the intervention fund is twofold, which is funding through provision of credit facilities and assistance such as commissioned study to review the industry and develop funding instruments for the industry on Bollywood financing experience through EXIM India. According to report the bank will also sponsor capacity building proghrammes such as events, film festivals and sponsorship of Nigerian Pavilion at international film festivals. Requirements for accessing the $200m intervention fund include: collection and completion of the NCEILS Application "form obtained directly from NEXIM. The completed form should now be forwarded, supported with a copy of the project Brief and feasibility study including the Certified true copies of the following documents: Company's Incorporated Documents, Memorandum and Article of Association, forms CAC and CAC, Audited Statement/Statements of Affairs/Cash Flows, Budget(s) Bills of Quantity, Pro-forma invoice and  Completion Bond where applicable. Proprietary Rights/Syndicated rights where police-able and Collateral Security/Intellectual Property assets that are properly patented, trademarked, Copyrighted. Executed Contracts Agreements (rental/lease, Retail/Sales Agency, Cast Crew and any other document that maybe required by the bank.
     Managing Director of NEXIM Bank said: ‘‘we would finance exhibition platforms so that by the time the movies are done, it could be showing in the cinemas for months before they are made into DVDs for mass consumption.  He further explained that the Nigerian creative arts and entertainment had done creditably well in the socio-economic development of the nation. The industry had, by recent estimates, created over one million jobs directly and indirectly, and generated a minimum of $500 million in annual revenue. The industry was also widely adjudged as the most prolific in the world, producing over 2500 movies yearly in the past three years. He noted further that: With the global film entertainment market generating over $86 billion in revenues in 2010 and with revenue streams largely from box office collections, it is pertinent that Nollywood begins to adopt strategies to participate in the global market space.

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