More than half a dozen elections will be taking place across Africa this year, and employment and job creation are universal concerns for any political campaign. Africa’s working-age population is expected to reach one billion by 2030, and to keep pace with this population boom African countries need to generate at least one million new jobs per month.
Traditionally, expanding the manufacturing and agricultural bases has been the go-to method of boosting employment, as these are both labor-intensive sectors. But it’s time to look beyond these sectors to creative industries such as film, music, fashion, and handicrafts to help bridge unemployment gaps.
Across the continent, the arts generate US$4.2 billion in revenue. However, most of this economic activity is in the informal sector, which hinders growth in these industries and deprives the state of funds that could be invested to expand the reach and distribution of creative works.
First, investors will need to understand the complexity of value chains, which vary from country to country and are heavily localized. Nigeria’s well-known Nollywood film industry, as an example, has marketers that also function as producers and distributors. This can result in lack of specialization, making investing in new projects difficult. In Liberia, street vendors will upload music files to users’ phones for a fee. Any project dealing with the Liberian music scene will need to take this informal distribution method into account.
Slate financing—which involves an investment in a number of studio films, typically by private equity firms and hedge funds—could be used to invest in multiple projects, with the expectation that at least one of them will deliver a meaningful return on investment. South Africa’s National Film and Video Foundation has used slate financing effectively to fund black- and women-directed films, most of which would be economically non-viable with normal financing.
Investors can also use insurance products like completion bonds to hedge against projects not being completed.
Distribution problems for African film and music has led to billions lost due to piracy. In most cases, piracy arises as a reaction to inconvenience. If it is overly expensive to buy and ship a film from a neighboring country, consumers will gladly turn to websites or local street vendors selling pirated goods, usually at a fraction of market cost.
With the rise of streaming services like Netflix and Nollywood’s Irokotv, African creative producers can access a global audience and get around the historical obstacles of distribution. Pushing for greater internet connectivity and infrastructure would have the twofold impact of increasing streaming users while disincentivizing piracy.