Nigeria’s film industry, Nollywood, has been projected to generate US$1billion in export revenue over the next three years, according to analysts at FBNQuest who equally see the grant of pioneer status to the industry as a fillip for growth.
The analysts in their Good Morning Nigeria post-Friday said the success of the industry, which has been driven so far by the development of cinemas and multiple distribution platforms, would be further enhanced with the Federal Government granting Nollywood conditional access to pioneer status incentives.
The pioneer status incentives include holidays from the payment of companies’ income taxes as well as withholding tax on dividends from pioneer profits for an initial period of three years, which could be extended by two additional years.
“Generally, the film industry has made significant strides. On a macro note, it has engaged the youth population and, as such, generated jobs. Furthermore, we believe that increased investment in the sector would have a significant impact on GDP growth,” they noted.
Recognized as the second largest globally, and identified as a priority sector in Nigeria, Nollywood is said to be the country’s second largest employer after agriculture.
According to the national accounts for the first quarter of 2017, the entertainment industry grew by 12 percent year-on-year and now accounts for about 0.3 percent of total GDP, which is seen improving as its breaks new grounds, with statistics indicating that the industry produces 50 films per week.
The industry is equally supported by increased demand at cinemas for local films, which gradually are taking after global standards.
Specifically, in 2015, a movie grossed over N95 million from cinema ticket sales alone. Last year, another movie, which captured the culture of Nigerian weddings, broke that record by grossing N450 million.
However, the industry has been bogged, as peculiar with most sectors of the economy, by poor access to finance, which the pioneer status and the recent $1 million venture capital fund to assist and finance stakeholders in the industry would address.
The Bank of Industry has also launched the N1billion (US$3.3million at the official rate) Nollyfund to support filmmakers.
The FBNQuest analysts believe that increased investment in the sector would have a significant impact on GDP growth in the near-term.