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 (http://www.boinigeria.com). 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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