FUNDING AS A MAJOR CHALLENGE TO NIGERIAN FILM MAKERS ; A HINDRANCE TO INTERNATIONAL COMPETITION
The Nigerian film industry popularly known as Nollywood has been considered by many as the third largest in the world following Hollywood and Bollywood respectively. The film industry has been adjudged so in terms of reach, influence and output. Without real Government support, it will be fair to say that Nigerian film makers have managed to build an industry that has earned global recognition. Despite the tremendous contribution of the film industry to the Nigerian economy, the major challenge for film makers in Nigeria has always been that of funding. However, most movies are still being funded by individuals and a few private investors with little or no interference from the Government.
According to UNESCO, the industry has grown to the point where 872 feature-length movies were produced in 2006 second only to India’s Bollywood. The size of Nollywood however is mostly in terms of volume of output rather than financial size. The Nigerian Telegraph reported that today, a typical Nollywood movie has a budget of six million naira ($40,000) and producers can make 30 to 50 films in a year with filming lasting for just a few days in most cases while an average movies sells an 50,000 copies according to IROKO partners, a company which disburses Nollywood DVDs across Africa and streams videos online using a similar model to Netflix.
In an interview with one of Nigeria’s movie producers, Mr. Mahmood Ali Balogun the producer of one of the blockbuster movies to come out of Nollywood titled “Tango with me” which was a film of an international standard disclosed the major funding problems faced by Nigerian film makers. Mr. Balogun said “The industry is not structured in the sense that there is no appropriate registered data of professionals in the industry so, the institutions provide money to film makers cannot do them because they do not have where they can seek recourse in case there is a default in extending facilities to film makers”. He also mentioned that “the international property (IP) in Nigeria is not a collateralized IP because the monetary policies in Nigeria require that you have tangible assets as collateral before you can access any facility from the bank or other financial institutions”. The movie producer revealed that some financial institutions give loan but the conditions are not favorable. He mentioned that “in terms of screening at the cinema, our cinema screen is very few although there is an improvement.
Also, one of Nigeria’s film correspondents, Mr. Gregory Nwakunor reaffirmed there is no proper structure in Nollywood. He said “what is seen as thriving industry is a facade, because there is no deep effort at creating an industry that is identifiable, business wise”. He mentioned that what is however impressionable and remarkable is the Onitsha Market traders who dominated at the beginning have fizzled out completely, and only dominating in Asaba, Idumota and Enugu old Nollywood”. “The new nollywood of Kunle Afolayan, Mahmood Ali Balogun, Tunde Kelani, Emem Isong, Desmond Elliot, Stephanie Linus, Uche Rodriguez, Greg Odutayo and some others in that school involve in alternative source of fund.
Film makers strive to fund their film projects themselves but are discouraged because their return on investment has dwindled so drastically. Mr. Balogun said that “Nigerian market is a DVD market and piracy has made DVD almost a useless platform because distribution is very stilled and piracy being very epidemic”. This has made it become impossible for film makers to sell 20,000 copies of any released film, with almost all returns going to the pirates. Mr. Nwakunor confirms this statement when he said “some films gross good amount in the box office but are not ploughed back by film makers”. Enough copyright enforcement should be put in place in resolving this problem. This will go a long way in ensuring Nigerian film makers make necessary returns on projects in other to invest on other film projects.
One would expect that Nollywood beign the second highest revenue for the country should attract immense attention and support from the Government. Film makers in the country have estimated Nollywood to be producing about 2,000 movies a year. However, in 2013, President Goodluck Jonathan declared the sum of three billion Naira ($19million) intervention fund scheme committed to address some of the challenges presently facing the Nigerian film industry. The Government having recognized the potentials of the film industry in contributing to the economic development of the nation launched a project called “Project ACT (Advancing Creativity and Technology) Nollywood” to harness the growth of the industry. The aim of the project is to curtail the difficulties faced by private sector finances to participate by sharing some of the projects risks that would make projects fully commercially feasible and thus facilitate the industry’s development unto a path of full monetization and sustainability.
The Government’s announcement of three billion naira ($19 million) to the growth of the film industry is a right step in the right direction if only there is proper management of funds by both the Government agencies put in charge and the beneficiaries. There is also the risk of misappropriation of funds by corrupt officials and funds being distributed to ineligible people who do not meet the required criteria. However, for Nigerian film industry to compete with her foreign counterparts three billion naira ($19 million) is actually not big enough considering the size of the industry and it will need more than that to completely take the film industry to the level of bollywood and Hollywood in terms of quality production.
The Nigerian Government has recognized the economic potential of the film industry and has worked with international groups to set aside funds to support the industry. Here is an analysis of the Nollywood funding initiatives by different groups.
Group 1: World Bank, Funds: $20 million, Projects: In 2010, the World Bank identified Nollywood as a non-leading sector and included it as part of its Growth and Employability States (GEMS) project. As part of GEMS, the industry received funds to aid sector growth and boost employment.
Group 2: Nigerian Government, Funds: $200 million & $19million, Projects: In 2011, Nigerian President Goodluck Jonathan pledged a $200 million Government loan for the film industry and in March 2013, and announced a $17 to $18 million grant called “project ACT-Nollywood” to back training and skills acquisition for film production and distribution. In addition to federal initiatives, various state governments are supporting the industry by funding movies, award ceremonies and production villages.
Group 3: Tiger Global Management and Kinnevik, Funds: $8million, Projects: In 2011–2012, U.S based hedge fund Tiger Global Management (an early facebook investor) along with Swedish investment from Kinnevick, backed iROKOtv, the world’s largest online distributor of licensed Nollywood films aspiring to be “Africa’s Netflix”. iROKOtv spent $5 million of the initial funds to amass the rights to 5,000 Nollywood films.
However, in other to access funds made available by the Government and international investors, film makers must change their ways of doing business. Industry practitioners have to be proactive by consulting experts in drawing up business plans or financial projects to meet the strict prerequisite for the loan. It is not enough that Nigerian films gets support for funds by private investors, financial institutions and Government but it is expedient that these funds are channeled effectively into different parts of film making and production process to generate quality films that can compete favorably with other films globally.
Nigerian audience home and abroad complain of the quality of movies produced by film makers and compare Nigerian films to Hollywood movies forgetting that Nigerian film makers do not get the kind of financial support as their foreign counterparts. Funding has a major role to play in the production of quality movies that can ensure Nigerian movies compete with Hollywood. Lack of funds makes the film maker in most cases the producer, director, script writer, and the marketer. It is impossible for one person to assume all these responsibilities successfully. Without funds the film maker is unable to hire professionals in different aspect of production which results to poor quality production of the movie. Mr. Balogun explained the reason Nigerians think the movies are not of international standard. He said “we produce films of international standard more so; our movies are ‘afrocentric’ or ‘nigeriancentric’ and are geared towards our own people. He further said for example “a Nigerian joke will not resonate with a British or an American. Those are some of the issues that affect the internationalisation noise that we make about our films”.
The movie producer explained that payment of Nigerian actors is not an issue. The way Nigerian actors are paid is the way actors are paid anywhere in the world, it depends on the value of the actor because A list actors get higher pay and the upcoming and moderate actors get lower fee. Mr. Balogun “The payment system is commensurate with the economy we run, though we don’t pay the kind of millions they pay in Hollywood or other advanced markets but the actors earn something quite reasonable”. He emphasized that “the actors wages can be accommodated within the budget and cost structure for the movie production”.
The movie producer, Mr. Mahmood Balogun gave some advice on what should be done to generate effective solutions to funding challenges in the Nigerian film industry to make the industry compete favourably with her foreign counterpart. He said one of the major things to be done is that “the fiscal policy in the country needs to be reviewed, the Central Bank that provide guidelines for banks to operate need to review the conditions under which loans should be given”. He also explained the need for consistency in the access to development funds to boost production more. He said “the structuring of the industry is still informal and needs a structuring or regulatory body that will regulate practise to help those who want to fund the industry in the sense that they know where to address if there is default”.
The film correspondent, Mr Gregory Nwakunor also added that “Nollywood is a free market situation, where everything is done haphazardly, not as business concern but when a Motion Pictures Council popularly called MOPICON is in place, there will be a change. He also mentioned that “the coming of Project Nollywood funds in Bank of Industry and the NEXIM Bank is changing the whole process because you can access any funds without proper business plan, which indicates how income would be made and channeled.
It is imperative that the Nigerian Government, financial institutions, private investors and development support organisations needs to invest more in the Nigerian film industry to boost production and every other aspect of film making. Film makers on their part needs to improve on the structure of the film industry to attract investors. It is quite evident that funding plays a major role in influencing the success of a Nigerian film to compete internationally.
Here is the link to the full interview with Nigerian film producer, Mr. Mahmood Ali Balogun.
https://soundcloud.com/ololade-omolola-adeola/audio-interview-of-the-nigerian-film-industry-1