The music industry is the biggest export from Africa after oil and gas.
All eyes are on Africa this week, as the Ebola crisis persists and dozens of its leaders converge in Washington for the first-ever U.S.-Africa business summit. And a recording artist nicknamed "Africa’s Bono" is chiming in. Nigerian popstar D’Banj, an ambassador for the ONE Campaign, discussed the summit on ABC’s This Week on Aug. 3. He promoted investing in African agriculture, through the power of music. According to D’Banj, Africa puts out more beats than anything else, except barrels. "The theme of the summit is … investing in the next generation," he said. "Ten years ago, we did not have any (music) industry, we did not have any support. We did not even have any record label. And because we believed in ourselves and we believed in what we had, we continued. And now the music industry is the biggest export from Africa after oil and gas." A spokesperson for the ONE campaign told us that D’Banj was not referring to music as an economic export, but rather making the point that beyond its oil reserves, Nigeria is best known for its entertainment industry. Nonetheless, we were curious about how the recording industry stacked up economically. Second fiddle? Neither the World Bank nor the International Federation for the Phonographic Industry had data on the African music recording industry. So we had World Bank economist Cesar Calderon walk us through how to estimate Africa’s export revenue in 2012. Using the World Trade Organization data, we calculated that Africa’s total export revenue -- combining merchandise exports and commercial services exports -- is around $720 billion. Fuel exports account for 49 percent of that total, or about $355 billion in 2012. Though the WTO has data from some African countries on exports generated by "audiovisual services," the list is far from comprehensive. The best we can do is look at the "personal, cultural, and recreational services" category, which includes revenue from music, film, TV, museums, libraries, etc. This is a subcategory of commercial services, and brought in $480 million in exports. Altogether, the entire entertainment sector makes up less than 0.1 percent of the total export revenue, a crumb of the export pie. So what are the biggest exports out of Africa? In terms of earnings, after oil, it’s minerals and agricultural products, according to Jennifer Cooke, the Africa director of the Center for Strategic and International Studies. Specifically, Economy Watch lists palm oil, gold and diamonds, cocoa, timber, and precious metals. Using WTO data, we found the share of total exports generated by agriculture (7.9 percent), mining products (6.9 percent), and manufactures (14.2 percent). These export sectors are at least 100 times larger than the entertainment industry. Can’t Afrobeat that Though the recording industry doesn’t bring as much cash, the books may not reflect the reality of sales. Industry experts and academics alike said it’s hard to gauge just how much the music industry is worth in Africa. For one, there’s no formalized reporting to keep track of content, and the distribution system is a network of street vendors who may reprint content after paying a one-time fee, said Aidbee Adiboye, a spokesperson for Chocolate City Group, one of Africa’s largest entertainment companies. And secondly, piracy is a problem. "The protection of intellectual property throughout the region remains a concerning issue," said Jenny Mbaye, who studies African cultural production at the University of Cape Town. "In this sense, the piracy challenge calls for actively confronting and redressing the persisting lack of information and poor documentation of the processes that animate the chain of production and labour dynamics in these economies." Looking at homespun statistics from Nigerian entertainment executives, album sales clocked $30 million in 2008 (triple that of 2005’s), global live performances brought in an additional $105 million, and ringtones sold $150 million in 2011. Nollywood -- that’s Nigeria’s film industry, the second largest in the world after Bollywood, according to the UN -- cashes in $250 million in annual revenue, according to the Financial Times. Now, these numbers represent total revenue, not export revenue. Nonetheless, they provide a general sense of how the industry is faring. And it’s worth noting that the African music industry is burgeoning, especially in D’Banj’s home Nigeria and especially as it moves to digital platforms. Though the African diaspora is the primary consumer of African entertainment, Africans living abroad can act as "introducers," according Michael Ugwu, the former CEO of iROKING, the largest digital distributor of Nigerian media. Ugwu, who is in the process of setting up Sony Music West Africa, said that as digital distribution becomes more popular, international platforms are increasingly looking at Africa as an untapped market and as a pool for local talent. "Although very little data can assist in providing a systematic knowledge of the music economy on the continent, African music and cultural products in general, certainly present a comparative advantage on the globally competitive market of creativity," said Mbaye. Of course, the continent is home to global popstars Akon and K'naan, as well as the famous choral group Ladysmith Black Mambazo. Just a few years ago, the world was afflicted with Ghanian dance fever with Azonto, in which moves are taken from humdrum activities like driving or washing clothes. And D’Banj himself has international appeal. His 2012 hit, "Oliver Twist," inspired a West End musical and featured a cameo role by Kanye West, who then signed D’Banj to his label G.O.O.D. Music as its first international artist. Our ruling D’Banj said, "The music industry is the biggest export from Africa after oil and gas." Africa has a good story to tell about its music, but that doesn't mean it's a major export. In fact, the entire entertainment sector comprised less than 0.1 percent of Africa’s export revenue, far behind other sectors like agriculture and mineral products. Experts said the reported revenue may be less than the actual numbers though, due to the lack of a reporting and distribution infrastructure in Africa. But it wouldn't be enough to make a significant different. We rate D’Banj's claim False.
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