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Africa’s creative economy may be small by global standards, but it is thriving, prompting renewed efforts to draw investment.
Netflix invested nearly $200 million in key African markets between 2016 and 2022, the planned takeover of South African broadcaster Multichoice by French TV group Canal+ shows the commercial appeal of viewers in the continent’s most industrialized economy, and African artists have grown in popularity on Spotify. A growing number of organizations are trying to accelerate that expansion by luring international investors into sectors spanning from sports, music, and entertainment to fashion and film.
Valued at nearly $59 billion, Africa’s creative economy represents less than 3% of the $2 trillion global industry. In October Afreximbank, a pan-African financial institution, announced that it would increase its funding to the Creative Africa Nexus (CANEX) program from $1 billion to $2 billion for the next three years. In another move to accelerate growth in the sector, last week the African Business Angel Network (ABAN) unveiled an investor network targeting sports and creative startups on the continent. “Africa’s sports and creative industries have the potential to be economic giants, but they need capital that understands their unique value,” said ABAN CEO Fadilah Tchoumba.
In recent months the pan-African tech incubator CcHUB has launched hubs in Lagos and Nairobi aimed at enabling access to grant-funding and facilities for creators including podcasters, TV producers, and filmmakers. Joy Ujenyu, program manager at CcHub’s Creative Economy Practice, told Semafor that the growing global popularity of African cultural exports — such as Nollywood films and Afrobeats music — offered hard “evidence” to investors of the potential of the African creative economy.
“As output improves, there is going to be an improved investor risk appetite,” she said.
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Sandrine Nzeukou, founder of Playbook — a sports media platform focused on Africa and the Middle East — told Semafor that programs such as NBA Africa’s tech accelerator and the Rwanda-based growth accelerator Jasiri, together with lenders like the African Development Bank, were helping drive investment into Africa’s sports and creative industries. But she said these investments alone would not be enough to spur growth. “Ensuring that budding companies have the relationships, visibility, and most importantly, the talent is equally important,” Nzeukou told Semafor.
Afreximbank’s recent decision to double funding to the CANEX program was spurred by “a marked surge in demand across Africa’s creative sectors”, the bank said. The funding boost is specifically meant to support infrastructure including the construction of sports stadiums, fashion manufacturing hubs, music arenas, and film production facilities.
Martin’s view
Accelerating investment into Africa’s sports and creative industries is crucial to ensure the continent retains its vast sporting and creative talent, allowing it to reap the economic benefits of this talent instead of it draining overseas. Currently, for instance, the continent’s top sports stars turn out for clubs abroad due to an underdeveloped sports ecosystem in Africa. Similarly, many of the biggest names in African music are signed to international music labels in Europe and the US, and make much of their touring revenue in international markets. Meanwhile filmmakers too often need Western backers and distribution platforms to effectively produce and monetize their work.
For perspective — Africa was the fastest-growing music market in the world in 2023, growing at 25% from the previous year according to the global recording music body IFPI — with South Africa driving strong growth in paid streaming revenues. But the continent still accounts for less than 2% of global music revenues. Capitalizing on the rising global consumption of African culture through creative industries would inject much-needed cash into local economies, create jobs, and support the emergence of new talent.
Room for Disagreement
Marie Lora-Mungai, a veteran African creative economy and sports investor, told Semafor there was “no longer a funding gap for the creative sector” on the continent, saying that the funding ecosystem had become “richer and more diversified.” Instead, she argued, there was a dearth of companies to invest in. “Investors are struggling to find deals in which to deploy their available funding. Too many creative sector companies are still informal or semi-formal.” There is a big “opportunity for consolidation” in the fragmented ecosystem, she added.
Notable
- Nigeria’s government last year unveiled a plan to generate $100 billion annually from the creative economy and create 2 million jobs.