Nigeria’s movie and music industries contracts for the first time in 2 years
Nigeria’s entertainment sector comprising Motion Picture, 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 growth of Nigeria’s entertainment sector declined by 6% also the first time in 7 quarters.
The last time this happened was in the second quarter of 2020 when the GDP of the sector declined by 4.6%. That was also the quarter where the Covid-19 lockdown hit the most with the broader economy shrinking by 6.04%.
Key Highlights
A cursory view of the NBS report reveals that in nominal terms the sector is valued at about N1.4 trillion based on the summation of the last four quarters (2021Q2 – 2022Q2).
- The Information and Communication sector which includes the entertainment sector rose by 6.55% in the second quarter of 2022.
- The sector includes Telecommunications, Publishing, Broadcasting, and Entertainment (Motion Picture, Sound recording & Music production). Only the entertainment sector contracted.
- The entertainment sector’s contribution to GDP has also fallen 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 comprises Motion Pictures, Sound recording & Music production is regarded as one of Nigeria’s proudest exports.
- The sector covers Nollywood and Afrobeats, two of the country’s largest exports employing thousands of youths.
- It is unclear what could have triggered the decline in GDP Growth rate in this sector especially when it appears the entertainment sector is doing quite well globally.
- However, since the NBS has reported a decline in growth, it is likely volumes are not growing despite the perception.
- While the NBS does not disaggregate the movie and music industry it is difficult to ascertain with facts which sub-sector is the major issue.
What this means
A contraction in this sector also suggests players in this sector are not experiencing a growth in sales and inventory turnover despite the seeming ascension of the Nigerian music and movie industry in recent years.
- The decline in GDP growth also suggests investors in this sector will be wary of the risk to return on investment, especially for long-term projects that may take time to mature.
- Sectors with much slower growth rates, when compared to broader sectors, is often red flag for new investments.
- This could also mean Nigerians’ propensity to spend has been badly affected this year due to the rising inflation and exchange rate depreciation. This could mean less spending on entertainment as they focus more on spending on food and the basic necessities of life.
- NBS data also suggest dips in the sector occur mostly in the second quarter.
Nigeria’s Movie Industry Data
A recent report from the Cinema Exhibitors Association of Nigeria (CEAN), an association of cinema owners reveals the industry reported ₦363 million was made from ticket sales for the month of June which was ₦284.9 million or 44% less than was realized in May.
- Nollywood movie producers produced a total of 1,051 movies in the first six months of 2021, 1.7% higher than movies produced in the corresponding period of 2020. This is according to data published by the National Bureau of Statistics (NBS).
- The NBS is yet to report data for 2022.
