Creative Economics: Evaluation of the Nigerian Film Industry

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8th Feb 2020 Economics Reference this

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Individual assignment Two

Through creative economy, people can put their creative imagination into reasonable use to increase the value of an idea. Creative economy typically ensues wherever individual creativity is the major cause of a transaction and is highly valued. Several indicators can be used to measure a creative economy, like trade, consumer expenditure and producer output. Promoting creativity is essentially important, creativity comes with the ability to problem solve, collaborate, make connections, innovate and reflect critically.

The creative and cultural industries are progressively perceived as important sectors of a knowledge- based, modern economy, not only in municipal or urban areas, but in various economic setting. Creative and cultural practitioners, characterized by flexible and portfolio working environment, change between private and public sectors: showing adaptability, compliance and versatility. There is a high demand for the skills and opinions of the industry all over the economy, as they are viewed as vital to driving and fueling the economy.

Generally, some of the reasons why creative industries are seen as increasingly essential for economic development and why the government should support the industry are:

  • Consumers spend a large part of their income on different cultural and leisure goods
  • Creative and cultural industries are a booming economic sector- in the UK, it accounts for 8% of its GDP (BOP Consulting, 2006)
  • Creativity is highly perceived as a vital contribution into the economy as a whole
  • Barriers to entry in some creative sectors are dropping – through digital technology, innovation has been promoted, and more entrants into the creative sector.

Creative economies are usually seen in market-based economies in which there is benefit of artistic and intellectual freedom, accessible private capital, lack of restriction/control, access to knowledge, and the autonomy to fix market prices whereby the population can, on their own make a choice regarding what to rent or buy. It is one of the most vibrant sectors of the global economy along with a strong transformative force for socioeconomic development. Creative economy deals with the boundary between technology, economy, culture and social aspects. The reliance of creative goods and services on skills, ideas and knowledge and the capacity to seize new opportunities makes them resilient products.

According to a United Nations survey (2008) of the global creative economy, “the border that exists between technology, creativity, culture and economics, as defined in the capacity to distribute and generate intellectual capital, possesses the ability to generate jobs, income and increase export, at the same time advancing diversity in culture, social inclusion and human development. And this is what the emerging creative economy has set in motion”. The creative economy can produce a cross-cutting connection with the overall economy both at micro and micro levels If operative and efficient public policies are set.

Nigeria, for example, is the largest economy in Sub-Saharan Africa, and a fast-booming film, tech and fashion industry which have come to become a strong exporter of culture. According to the federal government, “Nigeria’s greatest strength lies in her creative industry”. The Minister of Information and Culture stated that the creative industry is an area where the government is rebranding with huge investment on necessary infrastructure and people with the aim of maximizing potentials in the sector. Furthermore, he specified that government has been incenting the Nigerian artists for development of the industry as tourism remains a sector Nigeria has comparative advantage over many other nations. The country’s greatest strength remains in the creative industry; music and film. About 8.6% of GDP in Africa is from tourism, it is the stance of the country as a whole to diversify the economy and move away from mono- product (which is oil) and as such, several investments with a bearing on the creative economy are being undertaken.

The government has taken a very bold step by placing the Industry on the list of industry which qualifies for what is called “pioneer status” – this means that if an individual invests in an industry, say, film or videos, with a huge amount of funds, such individual will be eligible for tax rebates and tax holidays, also, dividends will be tax-exempt. All these puts Nigeria in a position to attract investors to invest in the creative industry.

The Nigerian film Industry has demonstrated itself to be a great employer of labor, especially with young people, but also a high foreign exchange earner, potentially because of its international demand and appeal and as such, the government deemed it necessary to give it the required support. The film industry often informally referred to as Nollywood, was the 2nd largest film industry in 2009, in terms of output and the 3rd largest, in 2013, in terms of the overall revenue generated. Below is a list of top 15 countries as of 2015 by the number of feature films according to UNESCO Institute for Statistics:

Rank

Country

Films

Year

1

 India

1,986

2017[2]

2

 Nigeria

997

2011

3

 United States

791

2015

4

 China

686

2015

5

 Japan

594

2017[102]

6

 France

300

2015

7

 United Kingdom

298

2015

8

 South Korea

269

2015

9

 Spain

255

2015

10

 Germany

226

2015

11

 Italy

185

2015

12

 Argentina

182

2015

13

 Mexico

176

2017 [103]

14

 Turkey

137

2015

15

 Brazil

129

2015

Source: Wikipedia 2018

The content eminence and improved production of Nigerian films shows growing professionalism with the industry making an average of N1.72 trillion in the year 2013, analysts say. Over the years in Nigeria, the creative industries have formed economic growth and offered support for a huge number of people within several social and economic strata promoting the development of national cohesion and identity diffusion. UNESCO ranks the Nigerian film industry to have a potential annual revenue of $590 million, with over 2000 movies being produced per year and an approximate viewing audience of 200 million across Africa and beyond.

According to the UNESCO Director-General, “Film and video production are excellent and outstanding examples of how the cultural and creative industries, as channels of identity and values, can make way to allow for understanding and exchange of ideas between people, and equally to the growth and development of the economy”. The creative industries, in addition to its economic significance, are genuine measure for tackling the challenges faced due to poverty, bad governance, growing insecurity, corruption etc., which stays a threat to Nigeria’s fledgling democracy (Dandaura, 2013).

With over 1 million people employed in the Nigerian Film industry, the sector is the 2nd largest employer in the country, after agriculture. According to the Nigerian Bureau of statistics, it is estimated that the share of GDP from the industry is at 1.4%. On average, it costs about $25,000 to $70,000 to produce a movie in Nigeria, according to the British Broadcasting Corporation. The film production takes about a month and within 2 to 3 weeks of release, are profitable. Majority of the DVD movies effortlessly sell more than 20,000 units whereas the most successful ones sell quite over 200,000 units.

In conclusion, it is imperative for the government to support and back the Nigerian Film industry seeing that it generates high revenue for the economy and creative industries contributes to Nigeria’s economy, trade, image promotion and tourism. By 2020, the industry is projected to generate about US$1bn from export revenue. In general, the industry has advanced substantially. On a macro note, it has occupied the youth population, thereby creating jobs. Increasing investment within the sector is bound to have a noteworthy effect on the GDP growth.

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