Nollywood shoots up to 90% of films without proper script development – MBO Capital

Nollywood, the vibrant Nigerian film industry, is producing an estimated 80% to 90% of its films without proper script development due to limited access to patient capital. In an interview with Nairametrics, Adekunle Adebiyi, Executive Director at MBO Capital Management Limited, shed light on the financing challenges plaguing Nollywood and the investment opportunities within Nigeria's creative economy.

Nigeria churns out around 2,500 films annually, yet a significant number of these productions jump directly from the initial screenplay draft into filming. This trend is blamed on the industry's heavy reliance on debt financing, which primarily funds production and post-production costs instead of the earlier stages of creative development.

Most financing arrangements available to Nigerian filmmakers revolve around production activities, leaving insufficient resources for the crucial script development process. MBO Capital has mainly invested in film projects using debt financing for production, post-production, and occasionally marketing. Notably, the firm prioritized financing the international marketing of the highest-grossing Nigerian film of the year, "Call of My Life," rather than its production, highlighting the need for more structured equity investment to support script development.

Adebiyi stressed that increased access to patient equity capital would enable filmmakers to devote more time to crafting compelling stories and characters before the production phase. Another significant challenge lies in the lack of predictable distribution and revenue recovery structures, as investors often grapple with determining how and when they will recover their capital, especially when filmmakers rely on streaming platforms for their productions.

Furthermore, the limited number of cinemas in Nigeria constrains the industry's revenue-generating potential. MBO Capital employs an assessment framework with approximately 10 to 12 criteria to evaluate film investment proposals. Despite these hurdles, Adebiyi noted that investor interest in Nollywood remains robust, with the firm receiving at least one film financing proposal daily.

Although Nollywood stands as one of the world's most prolific film industries by production volume, access to structured financing remains a significant obstacle for filmmakers. An earlier interview with Nairametrics revealed filmmaker Nora Awolowo calling for greater domestic investment in Nollywood, emphasizing that the industry's long-term sustainability hinges on developing its own financing and production infrastructure.