Nigeria’s entertainment sector is one with loads of potential to boost economic growth and power exports but the macroeconomic environment needs to be supportive, according to Randall Kroszner, a professor of Economics at The University of Chicago Booth School of Business.
“The entertainment sector has always been a very strong sector for Nigeria both domestically and internationally, and the key thing is to get the investment coming in to build this sector,” Kroszner said at the BusinessDay CEO Forum on Thursday.
A sound macroeconomic environment is, however, crucial in attracting investment, he said.
“The potential of the entertainment sector is especially so given that Nigeria is fortunately endowed with a young populace and an extraordinarily large population, which is beneficial for its prosperity,” Kroszner said.
Despite big strides made in recent years, the entertainment sector currently contributes less than 1 percent to Nigeria’s GDP, according to NBS data.
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In its Economic Recovery and Growth Plan (ERGP), the Federal Government asserted that the entertainment and creative industry will contribute at least $1 billion to the Nigerian economy by the end of 2020.
However, the sector’s productivity stands to be threatened with the pressing issues of rising inflation and poor business environment, which “can cause severe economic disruptions”, Kroszner said.
“Fundamentally and structurally, Nigeria has persistently struggled with low income per capita and slower GDP growth asides expected economic pressures leaning towards more currency pressures, higher inflation and a squeeze on living standards,” Kroszner said.
“Nigeria has also had to deal with the sharp drop in oil prices, reduced demand, decline in government revenue and unfavourable current account position among other negative factors,” he said.
Nonetheless, Kroszner emphasised that “a sound macroeconomic environment is needed to allow for investment, encourage savings and capital flows into the economy, which is crucial for sustaining competitiveness-driven productivity”.
“To boost productivity growth, good jobs are crucial alongside ensuring that industries are as efficient as possible, both domestically and internationally competitive such that structural reforms lead to higher export growth for Nigeria in the medium and long term,” he said.
