Nigeria’s film and music industries sign contracts for the first time in 2 years

Nigeria’s entertainment sector, comprising film production, sound recording and music production, contracted by 6% for the first time since 2019.

This is according to data from the National Bureau of Statistics which revealed that the growth of the entertainment sector in Nigeria declined by 6% also for the first time in 7 quarters.

The last time this happened was in the second quarter of 2020, when the sector’s GDP fell by 4.6%. It was also the quarter where the Covid-19 lockdown hit hardest, with the wider economy shrinking by 6.04%.

Highlights

A quick look at the NBS report reveals that in nominal terms, the sector is valued at around N1.4 trillion based on the sum of the last four quarters (2021Q2 – 2022Q2).

  • The information and communication sector which includes the entertainment sector grew by 6.55% in the second quarter of 2022.
  • The sector includes telecommunications, publishing, broadcasting and entertainment (movies, sound recording and music production). Only the entertainment sector contracted.
  • The entertainment sector’s contribution to GDP also fell to 0.91% from 1.32% in the previous quarter.
  • The overall economy also recorded a GDP growth rate of 3.54%

Why the dip

The entertainment sector, which includes motion pictures, sound recording and music production, is considered one of Nigeria’s proudest exports.

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  • The sector covers Nollywood and Afrobeats, two of the country’s biggest exports employing thousands of young people.
  • It is unclear what could have triggered the decline in the GDP growth rate in this sector, especially when it seems that the entertainment sector is doing quite well globally.
  • However, given that the NBS reported lower growth, it is likely that volumes will not increase despite the perception.
  • Although the NBS does not disaggregate the film and music industry, it is difficult to determine with facts which subsector is the major problem.

What does that mean

A contraction in this sector also suggests that players in this sector are not experiencing growth in sales and inventory turnover despite the apparent rise of the Nigerian music and film industry in recent years.

  • The decline in GDP growth also suggests that investors in this sector will be wary of payback risk, especially for long-term projects that may take time to mature.
  • Sectors with much slower growth rates, compared to broader sectors, are often a red flag for new investments.
  • It could also mean that the propensity of Nigerians to spend has been severely affected this year due to rising inflation and depreciating exchange rate. This could mean less spending on entertainment as they focus more on spending on food and the basic necessities of life.
  • The BNS data also suggests that declines in the sector are mostly occurring in the second quarter.

Nigeria Film Industry Data

A recent report by the Cinema Exhibitors Association of Nigeria (CEAN), an association of cinema owners, reveals that the industry reported that ₦363 million was generated from ticket sales for the month of June, i.e. ₦284.9 million or 44% less than in May. .

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  • Nollywood film producers produced a total of 1,051 films in the first six months of 2021, which is 1.7% more than the films produced in the corresponding period of 2020. This is according to published data. by the National Bureau of Statistics (NBS).
  • The SNB has not yet released data for 2022.

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