Exploring Africa’s creative economy

Africa

Source: Exploring Africa’s creative economy | Daily News

Own Correspondent    6 September 2019

In March 2018, 52 out of 55 African countries signed the historic African
Continental Free Trade Agreement. Recently, Africa’s Tech and Creative
Industry leaders and forward-thinking ecosystem builders gathered for a
two-day conference in Kigali, Rwanda to explore the opportunities that
will emerge with the signing of the trade agreement for the creative
economy on the continent.

The Kigali event took place from 15 to 16 August 2019. According to the
organisers, it saw a group of African technology and creative sector
players, as well as forward-thinking ecosystem builders; in collaborative
sessions recommend the governance structure and definitive guide on the
goals and objectives of the group in relation to the implementation of the
African Continental Free Trade Agreement (AfCFTA).

The meeting tackled the role of technological innovation in unlocking
value for the creative sector. The sessions were led by the Africa
Technology and Creative Group (ATCG), which is a coalition of technology
and creative professionals. The group is working to forge catalytic
frameworks and reference points for the success of the free trade area.

“The purpose was to deconstruct the AfCFTA, which was put together by the
Africa Union by the governments that make up the African Union. The
creative and cultural industries wanted to see how they could leverage on
the agreement to advance the pan African creative economy,” said Josh
Nyapimbi, Executive Director of Nhimbe Trust, and Co-chair, Global CSO
Coordination, 2005 UNESCO Convention and Co-pan-African Rep, Global CSO
Coordination and member African Technology and Creative Group.

Nyapimbi attended the Rwanda meeting and has sat on a number of
international platforms representing the African creative and cultural
industries civil society.

To give context, the 2010 United Nations Conference on Trade and
Development (UNCTAD) report states that: “In 2008, the eruption of the
world financial and economic crisis provoked a sharp drop in global demand
and a contraction of 12% in international trade.

However, world export of creative goods and services continued to grow,
reaching $592bn in 2008 – more than double the 2002 level – indicating an
annual growth rate of 14 percent over six consecutive years.” As per the
same report Africa’s share of the global creative economy is less than 1
percent, with the key contributors to this.

According to a 2018 report by research think tank, South Africa Cultural
Observatory (SACO), the broader Creative and Cultural industries (CCIs)
are responsible for 6.72% of all South Africa jobs, which is a figure of
over one million. The same report states that South Africa’s creative
economy contributes over R90 billion to the national economy or 2.9% of
the GDP ahead of the agricultural sector at 2.2%.

The African Union’s vision and policy framework to stimulate
socio-economic development, New Partnership for Africa’s Development
(NEPAD), stresses the urgency for the continent to “find ways to diversify
their economies, namely by boosting non-traditional sectors; expanding
their range of products and exports; and engaging with new economic and
development partners.”

Whilst the continent is mineral rich, and countries such as Botswana
having an over reliance on diamond revenue for instance, the need for
exploring other areas of the economy is a matter of economic prudence. The
place of the creative and cultural industries in terms of potential
contribution to national GDPs and job creation can hardly be
overestimated.

The United Nations Conference on Trade and Development’s Creative Economy
Report 2008 defined the creative economy as “the interface between
creativity, culture, economics and technology as expressed in the ability
to create and circulate intellectual capital, with the potential to
generate income, jobs and export earnings while at the same time promoting
social inclusion, cultural diversity and human development.”

According to UNCTAD, the creative economy revolves around the following
nine sectors: traditional cultural expressions – arts and crafts,
festivals and celebrations; cultural sites – archaeological sites,
museums, libraries, exhibitions, etc; visual arts – paintings, sculptures,
photography and antiques; publishing and printed media – books, press and
other publications; design – interior, graphic, fashion, jewelry and toys;
performing arts – live music, theatre, dance, opera, circus, puppetry,
etc; audiovisual – film, television, radio and other broadcasting; new
media – software, video games, digitalized creative content; creative
services – architectural, advertising, creative R & D, cultural and
recreational.

The various sectors have been identified as key drivers of foreign
exchange earnings and employment creation. Arguably, tourism and related
leisure activities overlap with the creative and cultural sector and can
be included in the reckoning of the sector. Information and Communications
Technology (ICT) has in the last twenty years forced an expansion of the
list of sectors that form the creative and cultural sector.

The Mobile Ecosystem Forum cites statistics in an All Africa report that
`indicate that 62% of mobile users consume online video content in Africa
and video will account for 70% of all mobile traffic by 2021.’ The Forum
notes that `the continued growth of data consumption – fuelled in part by
the demand for online video content – is creating robust revenue growth
for operators.’  Additionally, the website cites a report by Ovum which
`estimates that mobile data in Africa will grow from $6.40bn in 2015 to
more than $27bn in 2021.’

Given this background, the role of technology in the creative and cultural
industries growth matrix is critical when one considers the intersection
between creation and distribution of creative `goods’ (film, television
shows, music etc.) to the global market. It is nearly impossible to think
of consumption of cultural products without considering the role which
ICTs play.

The role of technology in the creative and cultural industries growth
matrix is critical when one considers the intersection between creation
and distribution of creative `goods’ (film, television shows, music etc.)
to the global market. It is nearly impossible to think of consumption of
cultural products without considering the role which ICTs play.

The digital economy is content and data driven and those business entities
that are able to offer their services at competitive prices will be at an
advantage. Therefore, companies such as U.S. giant Netflix have joined the
fray in accessing the African market using the World Wide Web platform.
Netflix is fighting for the space that has been dominated by MultiChoice
Africa as the leading distributor of creative content on the continent.

The business model of MultiChoice Africa relies heavily on technology
(digital satellite infrastructure) to monetize its operations across the
continent and the value proposition of being the `home of African
storytelling’. Indeed, there has been a surge in interest in African
narratives or content based on an African context and this trend has best
been exemplified by the global success of Black Panther and The Lion King,
which have grossed over two billion dollars between them.

Whilst this alone does not fully illustrate the point being made, African
producers such as South Africa’s Kagiso Lediga, have received commissions
from Netflix to produce content (Queen Sono) which will be accessible to
subscribers on Netflix’s online platform.

In July, French television company Canal+ acquired the ROK film studio
from Video On Demand company IROKOtv, which was founded by Jason Njoku in
2010 (and backed by $45 million in venture capital) for an undisclosed
amount. IROKOtv has an extensive catalogue of Nollywood film content,
which is the largest in the world. It has viewers in 178 countries and
this ability to span a larger network of African consumers on the
continent and the Diaspora was a major contributor to ROK’s acquisition by
Canal+. IROKOtv’s key online streaming markets are Nigeria, the U.K. and
the United States.

According to Fortune magazine report, in 2014, the Nigerian government
released data for the first time indicating that Nollywood is a $3.3
billion sector, with 1844 movies produced in 2013 alone. The report states
that `many observers believe that the global reach of African films could
take off, led by video on demand (VOD) platforms and productions of
Nigeria – the continent’s largest economy and most populous nation.’

African creative and policy makers may also take a cue from the freakish
success of South Korean musician PSY. Around 2012, PSY, the South Korean
born Park Jae-Sang, shot to global fame on the back of `Gangnam Style’, a
satirical song. The video generated massive global attention with
3,362,306,376 billion views on You Tube to date. The South Korean singer
and rapper has a net worth of US$60 million.

On average, You Tube pays content creators who own copyright material on
its platform, between US$600 and US$7000. The company calculates these
figures via a system called CPM or cost per 1,000 views. Other factors are
considered such as demographic segmentation of viewers (age, gender,
location), views by geographic location, type of content (viral,
informational, news, comedy), frequency of video uploads, duration of
views, subscriber count and engagement.

The overarching aim of the ATCG is to galvanise grassroots actions in the
technology and creative industry to make AfCFTA work for Africans as well
as to relay the message of the opportunities for new market linkages,
intra-trade and intellectual property and laws. Investment is poised to be
inspired by an awareness of the opportunities brought by the creation of a
huge marketplace, scalability of operations and harmonized cross border
trade regulations and movement.

The integrative power of ICTs and namely the Internet is undoubtedly vast
but the major challenge with technology is the cost of data for users.
This fact alone emphasizes the interrelatedness of ICTs and the creative
sector viz `a vis content distribution and scalability for businesses
within the sector.

For example, in 2018, Liquid Telecom and Telecom Egypt inked a deal that
has to date enabled the completion of a 60,000-km terrestrial data
network, known as “The One Africa,” that runs from Cairo to Cape Town.
Telecom Egypt is Egypt’s biggest fixed-line and mobile operator. The
memorandum of understanding stipulated that Liquid Telecom would link its
“network from Sudan into Telecom Egypt’s network via a new cross-border
interconnection”.

Founder and Executive Chairman of Econet, Strive Masiyiwa, said at the
time that, “Completing our vision of building a single network running on
land, all the way from Cape to Cairo, is a historic moment for the company
and for a more connected Africa… This network not only represents a
remarkable engineering achievement that has overcome some of the most
challenging distances and terrains on the continent, but it is also
supporting the rise of Africa’s digital economies.

Wherever the One Africa network has been completed, we have seen dramatic
increase of data traffic between nations connected to it. We expect to see
a lot of traffic between Egypt and the rest of Africa. Where there is
improved communications, improved trade follows as well. We need to see
more trade between African countries.

Therefore, `One Africa’ will provide an alternative to the multiple subsea
cables that connect Sub-Saharan Africa and North Africa and in turn
improving the connectivity of Africa and enhancing the prospect that
business services such as cloud computing and storage will become more
affordable.”

Governments and businesses will have to continue to find ways to cooperate
to set up the infrastructure. Aside from this, regulation may be necessary
to curb the predatory instincts of businesses in the ICT sector in terms
of profiteering at the expense of subscribers as this will prove
inhibitive in the long run.

The operational phase of the African free trade area was launched during
the summit of Heads of State and Government of the African Union (AU) on
the 7th of July 2019 in Niamey, Niger. Africa’s 1.3 billion population
almost matches China’s population of 1.4 billion and India with 1.3billion
but it is largely hobbled with barriers such as nationalism, xenophobia
and the daily needs of individual countries.

This means that the free flow of goods and citizens is still a dicey
proposition. The recent spat between Nigeria and Ghana, where reports of
Nigeria closing its borders to Ghanaian traders in agricultural
commodities, is an example. Nigeria has a nascent agricultural sector. It
feels the need to protect its own. For the SADC region, there is the
albatross of the snowballing xenophobic attacks that began with those on
foreign truck drivers in Durban and have now spread to places such as
Pretoria and Johannesburg metropolitan area affecting nationals from the
region and Zimbabweans too.

Despite the removal of visa requirements for citizens in regional blocks
such as SADC and ECOWAS, trade amongst African countries is faced with a
serious threat because of growing intolerance. Prior to AfCFTA, intra
Africa trade has not been that significant with only 18% of Africa’s
exports going to other African countries compared to the intra-European
trade being at 70% and 60% in Asia. Factors such as high import duties,
poor transportation networks and border controls have been blamed as some
of the reasons.

Still, South Africa stands poised to benefit from the continental trade
agreement because of its industrial infrastructure which can be scaled up
to meet continental demand. Aside from this, the country has served as a
launching pad into African countries for global finance and investors. For
example, Multichoice Africa, a digital satellite television company, has
15.1 million subscribers spread across Africa and generates revenue of
R50.1 billion annually.

The company’s annual report says that the rest of Africa constitutes 29.6%
of group revenue with 7.7 million active subscribers `across 49
geographies’. Given the groundswell of violence against foreigners, what
will be the knock-on effect for South African companies with an African
footprint? Already, there have been calls for retaliation by groups such
as the National Association of Nigerian Students (NANS) on South Africa
multinationals.

Tough questions have to be asked as to whether officials in the South
African government recognize the existential threat posed to its economy
if say, for example, SADC nations impose retaliatory measures in protest
of the attacks on their nationals. Figures from the Zimbabwe National
Statistics Agency (ZIMSTAT) indicate that Zimbabwe imported goods worth
$6.3billion between February and December 2018, marking a spike from the
figure of $4.9 billion the previous year against total exports of $3.9
billion. Of the import figure, goods from South Africa account for 49% of
the total bill representing a trade deficit in favour of South Africa.

The continental trade agreement can only skew the balance of trade in
South Africa’s favour because of a strong manufacturing base and an ailing
Zimbabwean economy. The question that arises with the growing intolerance
for foreigners is how the government of Zimbabwe can balance the need to
maintain diplomatic ties with its biggest trading partner.

Zimbabwe stands to lose the most from the AfCTA, ironically for an
agreement that is in principle designed to enlarge the market place for
signatory countries. Zimbabwe is ill placed to benefit from the agreement
because of structural problems. It also has a challenge of unfavourable
policies such as the foreign exchange retention regulations for exporters.
These have been criticized as hampering the operations of exporters.

If exporters are shackled, then how can the country reasonably expect to
generate revenue? Zimbabwe will have to follow the advice of one economic
analyst, Dumi Sibanda, who says, “If you take economic freedom from an
economy you can never have economic security.

Even for exporters, you saw that even exporters have been delaying
bringing money home because you bring your money and we have the 30 days
window in which you are supposed to use it and if you don’t use it, you
are supposed to sell it to the interbank market.” – NHIMBE TRUST

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