FG’s proposal on cinema houses

GIVEN the tremendous potential and the significant contributions of the entertainment industry to the nation’s economy, especially in the area of job creation, the recent official attention it has attracted is understandable. The remarkable impacts of the industry, especially the film and music segments, came to the fore when the economy was rebased in 2014. The industry is not only job-rich but also a revenue spinner. The reported official support to the industry has been relatively massive but it is doubtful if the outcome has been commensurate or significant enough to justify the official interventions. The absence of symmetry between official input and industry output speaks to the defective official intervention mode and its allegedly coloured objective. It is against this backdrop that the Federal Government’s recent proposal on cinema house needs to be interrogated.

The Minister of Information, Tourism and Culture,  Alhaji Lai Mohammed,  recently announced the Federal Government’s plan to build cinemas across Nigeria. The plan, which is to be executed via a public-private partnership business model that will involve foreign investors, reportedly aims at further diversification of the economy and the government’s revenue base. Another goal of the proposed partnership is to rein in piracy. However, lofty as the objectives of the government might seem, their realisation could be far-fetched judging by its antecedents as a poor businessman. Yes, some local investors in the movie segment have been making money lately, releasing box office hits, but these are serious, disciplined and shrewd businessmen. The government has no enviable track record of engaging in profitable business in the land.

For reasons of politics and sundry primordial sentiments, governments at all levels in Nigeria have proven to be poor decision makers on business matters. The question may, therefore, be asked as to how the plan by the Federal Government to get involved in the cinema business will be different. Not even the proposed involvement of foreign investors as partners can persuade discerning Nigerians to endorse the Federal Government’s suspicious move. For example, what difference will it make other than a subterfuge to confer legitimacy if the private sector is involved but the government takes the commanding heights in the management of the cinemas? And this should be expected since one of the ostensible reasons for the Federal Government’s proposed participation is revenue generation.

The government will have more than a compelling justification on paper to be the senior partner. Sadly, that will be all it needs to use the cinema business to dispense political patronage and make all forms of sub-optimal business decisions that are inimical to business survival and growth. Also, the proposed scheme to use cinema houses to tackle piracy is laudable but there is no compelling reason it should be government or public sector-led. It is imperative to stress that watching films is an act of leisure.  And that puts a question mark on the viability of the proposed cinema business, especially when the plan is to have cinemas everywhere in a country that has the largest concentration of poor people in the world (83million out of 170 million).The poor and unpaid workers are most unlikely patronise cinemas.

Many Nigerians are also wondering what the Federal Government’s sudden interest in direct investment in art and culture is all about when it is working strenuously to sell the National Theatre at Iganmu, Lagos which has largely remained a wasted monument for a long time. If arguably the most prominent facility/monument in the entertainment industry in Nigeria is being perfected for sale to private investors owing to poor management, why should the Federal Government contemplate embarking on building new cinema houses?  The Federal Government is urged to drop the plan. It should limit its involvement to the provision of an enabling environment for the entertainment industry to thrive. For instance, provision and facilitation of soft loans and tax incentives for investors have better chances of improving the contributions of the industry to the national economy than the government’s direct involvement in the business.

The entertainment business is a private sector-driven venture and should be left for private investors to handle. The government in this clime is hardly designed, structured or, more importantly, oriented to deliver on the economic mandates of firms or businesses. The virtual failure of the huge investment in Tinapa in Calabar, Cross River State, is an eloquent testament to the common refrain that government has no business in business. The addiction to corruption and inefficiency in the public sector is anathema to the economic motive of business. Indeed, the trend globally is that governments are divesting their interests in businesses, yielding ground to private sector investments in order to concentrate on governance. Nigeria has no reason to deviate from this trend. The government’s plan to engage in the direct production of economic goods and services is not advisable.