Uganda:Challenges of funding creative industries in Africa
By BAMUTURAKI MUSINGUZI – Creative industry players — entertainment and art — in almost all African countries single out lack of funds as the major hurdle in their quest to promote and sustain the industry. They say both governments and the private sector do not have policies on theindustry and neither do they consider it a priority.
Yet this industry is a multi-billion dollar spinner on other continents.
The 7th Congress on East African Cinema held during the 2010 Amakula Kampala International Film Festival recently, brought industry players from the region together to deliberate on how to attract financing from the banking industry and other lenders.
According to Nuwa Wamala-Nnyanzi, the chairman of the National Arts and Crafts Association of Uganda, an artist must make a case for what he or she produces and its worthiness before a financial institution can grant a loan. One has to prove its potential and relevance to a prospective investor or collector. “If I bought your piece of art today, will it gain value over a period of time? Banks therefore want to know how they will recover their investments.
“Banks are also looking for intellectual property rights issues, intellectual entertainment or nourishment, psycho-social values and fiscal value (re-saleable or mortgage value). For this to happen there has to be government support for the arts industry right from its infancy through the education system,” says Wamala-Nnyanzi, a visual artist and consultant.
“We also need to work on our integrity and good image because it is only the credible ones that will get financed,” he observes, adding that: “Banks need to support us through long-term financing, but governments have to recognise our industry first by subsidising us as it is done in South Africa. I operate an art gallery without subsidising my income like running an Internet café on the side.
“Our products are visual and unique because you cannot buy a painting every day, unless they are gifts. The profiles of buyers of my works also keep changing — it is not the same consistent buyers. I am not able to track them and tell their wants,” he says. Steven Gathongo, head of credit at KCB Uganda Ltd, emphasised the importance of the credibility of the borrower, who has to belong to a group or company in order to qualify for funding.
“We need to predict a potential borrower’s cash flow. Is he signed up to a producer? Do you have an events manager? We want to see if your money is coming in a very specific way. If you are selling one CD this month and the next one after six months, it becomes difficult to get finance,” Gathongo said, adding: “A bank loan is there to boost your project and income because you will have risked your money in the initial stage.”
The public in general and the finance sector often take the creative industry as not being a serious business, though the industry has proved to be a big revenue generator for the economy provided there is an infrastructure to support it.
“The players have to package and organise it as a serious business to be guaranteed of financial support. It is hard to finance somebody performing live. Selling records is much more predictable compared with live performances because with the latter it is hard to tell the
attendance numbers. For example, broadcast rights for international football are more profitable than gate collections. Piracy should be fought in all its forms so that artists can earn more from the sales of their products,” Gathongo said.
Financiers
Most financiers come in for purposes of advertising and marketing products. The potential financiers also look out for trade volumes to act as security and a guarantee to plough back their investment. Governments on the other hand have to grapple with “more important” issues like poverty, natural and man-made disasters, provision of education and health, and development of physical infrastructure.
The congress found that one of the biggest challenges for the industry is how to package and promote intellectual property initiatives for presentation to financiers. Intellectual property rights may be difficult to quantify because it is not a tangible item.
According to economist William Kizito, administrative structures are also lacking in most creative groups, particularly theatre companies in Uganda. The so-called leader in most cases handles almost everything, such as writing the script, recruiting artists, paying them and booking venues. “This kind of set up makes it difficult for bankers to come in. Bankers need clear administrative structures and not a one person operation. Bankers need to see control mechanisms. For example, they will need to follow the credit, turnover and banking history through the group’s bank account and not an individual’s account,” Kizito told the congress.
