Asset Managers Eye Nollywood for Blockbuster Returns
Earlier this month, a unique gathering took place in Lagos—colorfully dressed film stars and grey-suited asset managers met on the top floor of a Chinese car showroom to discuss lucrative opportunities in Nigeria’s booming film industry, Nollywood.
Nollywood: A Rising Investment Opportunity
Nollywood, Nigeria’s vibrant film industry, is the second-largest movie producer globally, trailing only India. Despite economic challenges like poverty and inflation, cinema ticket sales surged by 60% in 2024, reaching 11.5 billion naira ($8 million), according to the Cinema Exhibitors Association of Nigeria.
Folajimi Alli-Balogun, head of the film desk at MBO Capital, emphasized Nollywood’s investment potential, stating, “There is a huge market for Nigerian films outside of Nigeria.”
Streaming Platforms and Financial Gaps
With Netflix and Amazon Prime halting original movie commissions in Nigeria, asset managers like MBO Capital are stepping in to fill the financial void. While these platforms still purchase films, filmmakers now receive payments post-production—creating an opportunity for private financiers.
Alli-Balogun explained that streaming contracts mitigate risk, with investments yielding 30-40% returns. A $500,000 investment in a Nollywood film, structured through equity and debt, can generate substantial profits, especially with low production costs.
Market Growth and Global Appeal
Nigeria’s entertainment sector is expanding at an annual rate of 8.6%, with PwC projecting its value to reach $13.6 billion by 2028. Nollywood’s relatable storylines and diaspora appeal—particularly in the UK and US—have fueled its global popularity.
MBO Capital has already financed 10 films for Amazon Prime, including hits like “Gangs of Lagos” and “The Wedding Party 2.” Comedies perform well, but audiences ultimately gravitate toward compelling narratives.
Challenges and Private Financing Solutions
Despite growth, securing funding remains a hurdle. Lillian Olubi, founder of Gold Lilies Global Service, noted the difficulties, prompting firms like Chapel Hill Denham to launch a $1.2 million initiative supporting film development.
Most Nollywood films are self-funded, but private capital could bring stability. Bolaji Balogun, CEO of Chapel Hill Denham, stressed the importance of domestic investment in shaping Nigeria’s storytelling landscape.
The Future of Nollywood Financing
Filmmaker Steve Gukas, who secured bridge funding from MBO Capital, highlighted the benefits of financial guidance in balancing creativity and profitability. However, some, like Obi Emelonye, caution that the risk-averse nature of financiers may slow progress.
As private capital flows into Nollywood, the industry stands at a crossroads—poised for growth but navigating the delicate balance between artistic vision and financial sustainability.
Source: Moneyweb