Africa’s booming music industry going through growing pains

One of the bigger news items over the last decade went almost unnoticed – last year. Africa’s economic heavy weight, Nigeria’s recalculation of its economy revealed that its GDP was almost two times bigger than had been previously assumed. This is the equivalent of adding $15.7 trillion to the US’ GDP by the stroke of a pen, or the equivalent of statisticians realizing overnight that every US resident was $50,000 richer than had been previously thought.

The creative industry’s contribution was critical in this recalculation which saw Nigeria overtake South Africa as the continent’s biggest economy, and power its way to become the 24th largest economy in the world. For example, Nigeria’s prolific filmmaking industry, whose economic value was hitherto little recognized, was estimated to contribute $7.1 billion to the country’s economic output each year.

These trends provided a useful backdrop to an engaging discussion on the music industry’s contribution to Africa’s export markets in an event in New York organized by Avant-Garde Network and Gobbee Group.

However, there are growing pains that present formidable challenges but also opportunities. It will require the concerted efforts of all stakeholders to pull in the same direction if this potential is not to become stillborn.

Monetizing artistic creativity

While the revenue earning power of the music industry and its role as a major contributor to the macro economy is enormous, weak intellectual property protection and other leakages in the distribution channel have led to a tiny sliver of the revenue pie accruing to artists. They have had to make do with generating the bulk of their income from other revenue streams such as events and endorsements, areas where leakages are fewer and further between, according to Tunji Afonja, Chief Digital Officer of Mavin Records, a Nigerian-based music production company. “Digital revenues have started to show life – but have a long way to go”, he notes. That said, African artists’ experience with adapting to these secondary and tertiary sources of revenue puts them in an advantageous position to be able to capitalize from the gains of the new digital economy, observes Somi, a fast rising vocalist and songwriter.

Artistic integrity vs collaboration

Challenges in their home markets and need for external validation (real and imagined) have led a number of African artists to “collaborate” with their more famous western colleagues. Tuma Basa, a Congolese-American music executive at Spotify observes that he has seen a correlation between collaboration with foreign acts and traffic on sites such as Spotfiy. Lesser known African artists in this partnership benefit from a “halo effect” which can enhance their marketability and translate into higher sales. Blitz the Ambassador, perhaps one of Africa’s best kept musical secrets takes a slightly nuanced view and argues that there has to be a balancing act. Seeking validation in a way that is not organic may lead to quick initial success but is not sustainable. There is commercial viability in thoughtful and conscientious music that stays true to form and reflects the diversity that exists within Africa’s music continuum. There has been a lot of work put in by the latter that helped prime the market for the commercial success of the former, whose increasing prominence could be the rising tide that lifts all boats, he observes. Crossover acts can co-exist peaceably with artistic integrity. The increasing diversity and symbiotic relationships between the two ends of the market and everything in between is an indicator that African music outside its home market is maturing.

Role of stakeholders

An area that both parties are in agreement is to not loose sight of one’s core audience, which for most of these artists, are in their home markets. The African diaspora community has been singled out for praise for its contributory efforts in supporting home grown music, not just as consumers but also in propagating them in markets out of the reach of these artists. Tumi indicates that his company is seeing activity in far-flung places such as Brazil, Ukraine and New Zealand, in no small part, due to the patronage of the African diaspora market.

One stakeholder artists would like to see more support from is their home governments – not just in the form of financial support but also in creating an enabling environment. For example, a lack of protection of intellectual property is an issue that grates many. It dis-incentivizes investments and as a consequence, reduces the scope to generate increased economic activity in this space – and with that, job creation and tax revenue in the domestic market and increasingly, as a source of foreign exchange earnings.

This issue has came into sharp focus as a result of recent developments in African currency markets where countries such as Zambia and Ghana, at various times over recent months, have earned the dubious distinction of having the world’s worst performing currencies, leaving in its path a trail of high inflation, falling living standards and austere economic measures that are not only squeezing poor and marginalized groups, but increasingly, the continent’s aspiring middle class – the bedrock of recent improvement in economic fortunes.

In truth, the business model of commodity-dependent African countries is broken. Creating wealth, fostering security and stability solely on the back of digging from the ground has long passed its expiry date. Tapping into resources that lie above the ground – the creativity, aspirations and vim of the continent’s promising youth is a more sustainable and compelling economic proposition. Policymakers need look no further than sectors such as the music industry.

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