Cultural and Creative Industries : a lever of influence to exploit

A recent report titled « The Cost of Media Bias: The Economic Impact of Negative Reporting on Africa » reveals that Africa could lose up to $4.2 billion annually in inflated interest payments on its loans due to persistent negative stereotypes in global media coverage. This negative representation increases the perceived risk among investors, resulting in higher borrowing costs for African states, which are unfairly labeled as high-risk countries despite credit ratings comparable to their non- African counterparts. Addressing this media bias is essential to reduce borrowing costs and ensure fair financial treatment for Africa.

This is the challenge of the creative and cultural industries. In media, fashion, cinema, animation, and e-sports, the CCI contribute to changing the narrative about Africa. Moreover, they present Africa as seen by Africans themselves, which clearly alters the game. This new narrative thus has a real impact on the economy, which is why Afreximbank is interested. For several years, the African trade bank has been promoting and supporting the sector, which, while still needing structuring, professionalization, and financing, is booming.

Since 2001, the music industry in sub-Saharan Africa has generated more revenue than cotton, tobacco, or even coffee and cocoa

Over the last decade, the cultural and creative industries (CCI) in Africa have seen significant growth. From music to cinema, fashion, and art, these sectors contribute substantially to the GDP of African countries. For instance, African music, driven by artists like Burna Boy and Angelique Kidjo, reaches millions of fans worldwide, generating significant revenue.

Studies by UNCTAD (United Nations Conference on Trade and Development) have revealed that since 2001, the music industry in sub-Saharan Africa generates more revenue (with $63 million from South African streaming in 2019, the leading continental market) than cotton, tobacco, or coffee and cocoa. Similarly, a report by PwC projected that the African entertainment market would grow at an annual rate of 15% between 2020 and 2025, reaching $4.6 billion. Furthermore, the continent’s sports sector, valued at approximately $7 billion in 2018, is expected to exceed $12 billion by 2027.

Indeed, global demand for cultural goods has been steadily increasing over the past twenty years, at a rate of 6%, according to the United Nations. African countries could benefit from the positive spillovers of the emergence of a rapidly growing sector. The growth of cultural and creative industries (CCI) represents 7% of the global GDP. Across the continent, the cultural sector increasingly offers opportunities, particularly as a job provider.

An important source of employment

According to estimates, people under twenty-five will represent 830 million individuals on the African continent by 2050. While between ten and twelve million young people enter the labor market each year, only 3.1 million jobs are created. Careers in culture are more than ever establishing themselves as a significant source of employment and a growth driver for African economies seeking diversification and recovery.

Moreover, young entrepreneurs are emerging with innovative ideas, ranging from design startups to music streaming platforms, thus energizing the local economy. Technological innovation plays a key role in the growth of the CCI. With the advent of the internet and digital platforms, African creators can reach a global audience without intermediaries. This not only diversifies revenue sources but also promotes local culture on international stages. Platforms like YouTube and Spotify have allowed many artists to gain recognition and monetize their work, thus transforming their passion into a profession.

However, while Africa confirms its status as a land of creativity and a source of inspiration, it still represents only 5% of the global market for cultural and creative industries

However, while Africa confirms its status as a land of creativity and a source of inspiration, it still represents only 5% of the global market for cultural and creative industries, a market valued at $2.25 billion annually. Although initiatives are multiplying to transform the continent’s potential into growth and employment, challenges remain. The lack of suitable public policies, access to financing, and professionals trained in new technologies across the entire value chain limit development opportunities in a rapidly expanding global market.

The issue of financing is a major challenge for the Creative Africa Nexus Weekend (CANEX WKND) 2024, whose latest edition took place in Algiers from October 16 to 19, 2024. Supported by Afreximbank, the event is considered one of the continent’s most significant cultural and economic gatherings. « We see enormous growth opportunities for the creative industries… The CANEX initiative represents a powerful means to achieve Aspiration Five of the Agenda 2063 of Africa, » confirms Kanayo Awani, Executive Vice President of Afreximbank.

As evidence of its support for the industry, she announced that the Bank has doubled its financing allocated to these sectors, increasing from $1 billion to $2 billion for the next three years. This increase meets the growing demand for financing, particularly in film, music, and sports production. « Afreximbank has supported various activities in the creative sector, with a robust pipeline of creative agreements worth over $600 million, » she emphasized.

Furthermore, Afreximbank has created a $100 million venture capital fund to commercialize African intellectual property rights. The bank’s investments have already facilitated film production, often in collaboration with platforms like Netflix, and supported the development of sports arenas and gaming technologies. Afreximbank’s support for the creative industries also includes financing flagship projects, such as the construction of stadiums and supporting musical productions. For instance, the CANEX Music Factory has facilitated the creation of 32 original songs, with an album set for release in November on platforms like iTunes and Spotify.

By 2030, Africa could account for up to 10% of global exports of creative goods, worth approximately $200 billion, representing 4% of Africa’s GDP

Statistics also reveal the economic potential of the creative industries: by 2030, Africa could account for up to 10% of global exports of creative goods, worth approximately $200 billion, representing 4% of Africa’s GDP. This potential has led Afreximbank to adopt a proactive approach to catalyze the sector, contributing to economic growth and job creation.

“What sets CANEX apart from other initiatives is its holistic approach. It works with governments, with the AU, with other financial institutions, and with the diaspora globally to bring about the necessary systemic changes,” adds Kanayo Awani.

Even if others are also interested in the sector, such as the Francophonie, UNESCO, and the West African Economic and Monetary Union (UEMOA), which recently announced the creation of a Cultural Credit Fund of 20 billion FCFA ($33 million) to support cultural and creative enterprises.

A reappropriation of the narrative

In the meantime, the emergence of new cultural practices, promoting digital creative activities such as gaming or e-sports, opens new perspectives. These fields require less financial investment, making Africa an increasingly attractive market for global industry leaders, where local players are becoming increasingly present and participating in changing the narrative about Africa.

See or revisit our special AMAMag on CCIs