Okumagba - Nigeria's entertainment industry lacks structures

Nigeria’s entertainment industry lacks structures –Okumagba

The Chartered Institute of Stockbrokers (CIS) recently held its two-day annual conference, with the aim of helping to get more value from Nigeria’s entertainment industry, whose products have crossed borders across the globe with little impact on the nation’s economy. At the end of the conference held in Lagos with Nollywood stars and music icons in attendance, CIS President, Albert Okumagba, in this post-conference interview, tells newsmen that lack of funds, piracy, poor database and High operational cost are the biggest inhibitors in Nigeria’s entertainment industry. Deputy Editor, Kingsley Ighomwenghian, was there

Okumagba

What informed the theme of your recent conference?

The theme of the conference was borne out of a number of factors. One, there is the belief that the entertainment industry has not really benefited from the capital market. The coverage and spread of Nollywood and the Nigerian music industry go beyond the shores of Nigeria. The popularity of Nigerian actors and musicians within Africa and beyond appears to be unparalleled within the continent. Hence, if it can access capital that can run a lifeline in its system, the entertainment industry can be a major export earnings source to the nation. Besides, we are of the view that the industry has the potential to do more than it is contributing to the nation’s Gross Domestic Product (GDP) at the moment if it is well funded.

What were some of the issues raised at the event?

The most critical issues raised by the discussants and speakers were: lack of regulatory structure in the entertainment industry; lack of knowledge on the part of capital market operators; the entertainment industry is dominated by individuals and not corporate organisations; lack of data and poor record keeping by the practitioners in the entertainment industry; general misunderstanding of the role of capital market, and piracy.

Were there issues that resonated in the presentations?

Yes, the lack of structure, data and capital market operators’ limited knowledge of the entertainment industry, as well as the need to curb piracy.

How would you advise operators in the entertainment industry to access the market, what are the options available to them?

Special funds should be created for the entertainment industry. The fund should be sold to the investing public through the capital market. The funds should capture the characteristic of the each area of entertainment being funded.

As a frontline stockbroker, to what extent are operators in the entertainment industry qualified to access fund from the capital market?

There are still structural issues to be sorted out. Secondly, the entertainment industry operators need to be transparent in their dealings. They need to start to employ professionals in keeping their financial records. They should incorporate companies for the businesses and start separating their businesses from themselves.

Is the market ready to absorb them, amid complaints of the operators’ lack of structure?

Yes, they can be treated on individual basis, based on track record and recognition. In fact, immediately there is one success story of access to fund through the capital market, others will follow, and the market will then dictate the structures they need.

What are the challenges of the entertainment industry in Nigeria?

They include the lack of access to funds; piracy; lack of data; and high operational cost.

Is it true that the rebasing of the Nigeria’s gross domestic product (GDP) brought into fore the contributions of the industry for the first time?

We have always known this but the rebasing put monetary value to it even though the figure may not be correct, as we do not have the data to generate accurate figures.

What should investors look for before they invest in the entertainment industry?

That is difficult to say, knowing how the industry works. It is not all their work that turns out successful. But as in all investments, the character or track record of the promoters should guide an investor.

Other things that could be looked at are the size and structure of the market of the products, the level of development of the industry in terms of maturity, the level of competition amongst players, average cost of doing business, industry average revenue/returns and the market share of the artiste being considered as the avenue of investment.

You have created a special identity for the Fellows of the institute this year, what should we expect subsequently?

Investiture of Fellows of the Institute, going forward, would be an occasion of excellence, celebrating very distinguished City Gentlemen of the Stockbroking profession.

Were you satisfied with this year’s conference?

Yes, I am highly satisfied with this year’s conference but there is room for improvement.

What would you like to put in place for upcoming conferences?

The first is a reconfiguration of the conference fees to attract more participating members in the next annual conference. We also intend to do a comprehensive post-mortem of the conference with a view to learning from areas where few challenges were met, in order to have a better conference in 2015. Furthermore, there is likely to be an improvement in the awareness on the conference as well as the time interval between when the conference is announced and the time of the conference.

What is the current market state and what is your view of the outlook at the end of this quarter?

The market is presently bearish but with capacity to rebound and close in one digit positive territory at the end of the quarter. An answer to this question should be approached from first having a good understanding of the cause(s) of the present state of the market. Some of the reasons for the bearish state of the market are economic risk borne out of the reducing international oil price and building political risk surrounding the impending general elections, which are all likely to make foreign investors averse to investing in the country. And given the percentage of foreign participation in the Nigerian market, their withdrawal is largely felt by the market. However, since the reasons are not tied around the performance of the listed companies and the continuous attractive opportunities that the Nigerian market presents, the market has the possibility of returning a positive return in the fourth quarter of 2014.

The institute has become more visible under your administration. What is the secret?

The secret for the visibility of the institute is anchored on dynamic and virile leadership now experienced in the institute and enhanced network of relationship by the leadership of the council of the institute.

What is your message to investors as we approach the end of the last quarter?

Investors should take position at the demand territory of the market to benefit upon the rebound of the market. There is always opportunity to make money whether the market is up or down.