How Emefiele’s Bold Move will Strengthen Potential of Nigeria’s Creative Industry

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Nigeria is a country with over 250 ethnic groups. This is a reflection of the country’s rich cultural heritage.

Through music, movies, writing, food, fashion, dancing, arts among others, the country’s treasure are continuously showcased to the world.

Despite all these, the creative industry’s contribution to the national Gross Domestic Product remains very low and experts believe that the sector can perform better given the country’s rich resources.

For instance, the National Arts Theatre, the primary centre for the performing arts in Nigeria, has lost its glory as well as its potential as a means of non-oil revenue generation for the country.

This national asset that was built in 1976 as one of the four main venues of the historic Festival of Arts and Culture (FESTAC) that took place in 1977, has completely lost its splendour.

Indeed, just like the National Stadium at Surulere, Lagos, this facility has now been turned into a meeting point for mostly town unions and indigenes from other tribes that reside in Lagos State.

Hardly do one hear of any cultural event taking place at the national theatre.

Therefore, considering these unfortunate developments as well as the desire of the federal government to enhance activities in the non-oil sector, the Bankers’ Committee, in collaboration with the Central Bank of Nigeria (CBN), last week decided to intervene in the National Theatre as well as the creative sector.

The committee made of bank chief executives and regulators, last week took over the facility with the plan to turnaround and bring it back to life.

The central bank and the banks would be playing this role through the Creative Industry Financing Initiative (CIFI).

The CIFI is part of the development finance function of the central bank, which Section 31 of the CBN Act 2007, empowers it to carry out.

The CIFI is a collaboration between the CBN and the Bankers’ Committee to improve access to long-term, low-cost financing for entrepreneurs and investors in the Nigerian creative and information technology (IT) sub-sector, as part of efforts to boost job creation in Nigeria, particularly among the youth.

Under this initiative, entrepreneurs in fashion, music, movie production and information technology can get long-term low-interest loans with interest rate of nine per cent over a 3-10-year period, guaranteed by the CBN for their businesses. It was designed to support entrepreneurs in the creative industry and stimulate economic growth.

In line with this, the CBN Governor, Mr. Godwin Emefiele, whose many interventions have made difference in other sectors of the economy, while speaking at the Creative Nigeria Summit held in Lagos last week, announced that the federal government has agreed to hand over the National Theatre, Iganmu, Lagos, to the Bankers’ Committee, for the establishment of a creative hub.

He said the creative hub expected to pilot in Lagos would benefit 50,000 Nigerians and create over 150,000 skilled and unskilled jobs.

He explained: “We cannot afford to let the talents of our youthful population go to waste, as it would portend great dangers for the progress of our nation.

“Efforts must therefore be made to harness the innovative and creative energy of our youths towards enabling them to create productive ventures that will support improved wealth and job creation in Nigeria.

“This was the critical reason behind the CBN and the Bankers Committee’s decision, following our annual retreat in December 2018, to set up the CIFI.

“Using the Agri-Business/Small and Medium Enterprises Investment Scheme (AGSMEIS) fund, through which the banks set aside, on an annual basis, five per cent of their profit after tax, our goal is to support start-ups and existing businesses in the creative industry space, as well as the development of a creative industry park across three major cities in Nigeria.

“With the support of the federal and Lagos State governments, the National Theatre, Iganmu in Lagos is expected to serve as the initial pilot for the Creative Industries Park.”

He said the committee got the approval of President Muhammadu Buhari to intervene in the National Art Theatre to give the facility a facelift.

“In addition to that, the Lagos State Government has also allocated 40 acres for the development of the creative industry hub.”

He also said the CBN and the Bankers Committee would provide a textile apparel shared services facility at the creative park to train Nigerians on how to design and develop good quality made-in-Nigeria fashion products for the local and export markets.

Shedding more light on why the central bank and the banks decided to intervene in the national theatre, Emefiele said: “You can imagine the business activities that would be taking place there if that place is revived, the environment is cleaned up and there is guaranteed security.

“The whole idea is to revive the place, light up the place and even when we have visitors, we can take them there. It is painful seeing the surrounding of the national theatre messed up.”

In the continued recognition of its role as an agent of development aimed at ensuring self-sufficiency and to reduce Nigeria’s excessive dependence on imports, the CBN has invigorated its development finance activities and has focused on supporting farmers, entrepreneurs as well as small and medium scale businesses, through various intervention programs. Some of these initiatives include the Anchor Borrowers Program (ABP), Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) and the National Collateral Registry.

Also, the CBN introduced the Real Sector Support fund; a facility meant to provide cheap funding at no more than nine per cent to new projects in the agriculture and manufacturing sectors; aimed at boosting output and creating jobs.

Its recent directive that banks should raise their loan-to-deposit ratio to a minimum of 65 per cent before the end of December 2019, was also geared towards supporting the real sector of the economy.

The Minister of Information and Culture, Alhaji Lai Mohammed, had disclosed that Nigeria was seriously looking to the private sector to deliver the economy from its mono-product status.

“Our greatest strength lies in our creative industry, our music, and our films. That is one area we need to build on because that is one area we have comparative advantage over many other countries.

‘‘We are trying to encourage our artists, give them more incentives to develop the industry because tourism is about entertainment. We are trying to create a specific brand for the entertainment industry,” he added.

According to experts, the intervention at the national theatre would contribute significantly to job creation as well as help in reducing the level of insecurity and other social vices in the country.

An economist and Lagos-based Financial Consultant, Dr. Boniface Chizea, said the new approach would positively impact the unacceptable high unemployment rate of over 20 per cent with its nefarious social consequences.

The CIFI Scheme

A circular recently published by the CBN had disclosed that four key areas in the creative industry are targeted for financing under the scheme. They are fashion, information technology, movie production and music distribution. Software Engineering students can also access loan from the scheme for use in their creative ventures.

According to CBN, prospective beneficiaries are only required to prepare their business plan or statement on how much they want for their business and approach their bank for the facility.

“You can get a loan of up to N3 million for software engineering student; N30 million for movie production business; N500 million for movie distribution business,” the CBN added.

The facility also covers rental/service fees for fashion and information technology business and training fees, equipment fees, and rental/service fees for music business.

“Go to any bank of your choice to access the fund. Tell your bank how much you need. Your bank will discuss your request and provide you the money,” the banking sector regulator added.

The maximum interest rate of nine percent per annum (all charges inclusive) is applicable to all loans with a period for the repayment of the loan ranging from three to 10 years, depending on the segment of the business.

For software engineering student loan, it is a maximum of three years to repay a loan while it takes up to 10 years for people in movie production and distribution and also fashion, information technology and music.

The Group Managing Director/Chief Executive of Access Bank Plc, Mr. Herbert Wigwe, said the Bankers’ Committee reviewed the entire value chain of music, movies, information technology and fashion, production facilities to capacity building, to ensure that whatever is produced under the CIFI is world-class.

“The loans are for a maximum of 10 years, they are single-digit interest rate loans and reflective of the fact that in these industries, what you require is long-term financing at single-digit; while we will ask for collateral,it will be flexible,” Wigwe added.

IT Sub-sector

In line with its desire to support local information technology developers under the CIFI, the CBN also expressed its resolve to curb the $2 billion spent annually on the importation of information and technology solutions that could have been produced in Nigeria.

Emefiele said the IT sector was also expected to benefit from the CIFI.

“In the area of ICT, we are all aware of how the digital revolution is reshaping the nature of services being provided by organisations across the globe.

“Banks, schools, farming communities, healthcare centres as well as security agencies are leveraging technology to improve the quality of service and solutions being provided to their customers.

“So far, over $2 billion is spent annually in the acquisition of hardware and software solutions in Nigeria. In order to ensure that Nigeria is well positioned to address emerging opportunities and challenges in the digital era, the CBN and the Bankers Committee decided to work towards the establishment of an ICT training centre, which will also include an IT hub.

“These centres will be located in the Creative Industries Parks being established. Students will be provided with loan facilities to enable them to obtain advanced trainings at the centre on developing cutting edge technological solutions around cyber security, data analytics and cloud computing.

“Over 50,000 Nigerians are expected to benefit from this centre, which will result in creating over 25,000 software engineers and 150,000 skilled and unskilled jobs.

“It could result in potential Gross Domestic Product gains of close to $2 billion while curbing importation of IT solutions that can be produced in Nigeria.”

He added that the centre would enable Nigeria to serve as an outsourcing centre for IT services required in other parts of the globe.

“Nigeria can expect to earn over $200 million annually from the provision of IT services to individuals and corporate organisations in other parts of the globe,” he stated.

Commenting on the drive by the CBN and the banks to support the creative sector, the Minister of Youth and Sports, Mr. Sunday Dare, urged other private sector operators to emulate the banks and support sporting activities nationwide.

He said: “The era we waited for government to sponsor sport development is gone; we have benchmarks across the board where private investments in sports is the norm.

“The banks and private investors have taken the lead and in that direction we want to start a campaign called the ‘Adopt Campaign.’

Given the foregoing, the belief is that the CIFI can facilitate the birthing of many brilliant projects and ideas that had been held back for years because of the limited means of their creators.

The intervention by the CBN and Bankers Committee also offers the various regulatory agencies in the sector the opportunity to pull itself together for a relaunch

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