Africa's creative economy is attracting more investors
The growing global reach of African music, fashion, and sporting talent is drawing more investors to back the continent's thriving but underfunded creative economy.
Valued at nearly $59 billion, Africa's creative economy represents less than 3% of the $2 trillion global industry. Spotting a gap in a lucrative market, several new investment groups are funding African startups in sectors spanning from sports, music, and entertainment to fashion and film.
Last week the African Business Angel Network (ABAN) unveiled an investor network targeted at sports and creative startups on the continent in partnership with organizations including entertainment media company Trace. 'Africa's sports and creative industries have the potential to be economic giants, but they need capital that understands their unique value,' said ABAN CEO Fadilah Tchoumba.
Pan-African tech incubator CcHUB has launched hubs in Lagos and Nairobi aimed at enabling access to grant-funding and facilities for creators including podcasters, TV producers, and filmmakers. Joy Ujenyu, program manager at CcHub's Creative Economy Practice, told Semafor that the growing global popularity of African cultural exports offered hard 'evidence' to investors of the potential of the African creative economy.
'As output improves, there is going to be an improved investor risk appetite,' she said.Sandrine Nzeukou, founder of Playbook — a sports media platform focused on Africa and the Middle East — told Semafor that programs such as NBA Africa's tech accelerator and the Rwanda-based growth accelerator Jasiri, together with lenders like the African Development Bank, were helping drive investment into Africa's sports and creative industries. But she said these investments alone would not be enough to spur growth. 'Ensuring that budding companies have the relationships, visibility, and most importantly, the talent is equally important,' Nzeukou told Semafor.
Afreximbank, a pan-African financial institution, announced in October that it would increase its funding to the Creative Africa Nexus (CANEX) program from $1 billion to $2 billion for the next three years. The decision to double funding came from 'a marked surge in demand across Africa's creative sectors', the bank said. The funding boost is specifically meant to support infrastructure including the construction of sports stadiums, fashion manufacturing hubs, music arenas, and film production facilities.
Accelerating investment into Africa's sports and creative industries is crucial to ensure the continent retains its vast sporting and creative talent, allowing it to reap the economic benefits of this talent instead of it draining overseas. Currently, for instance, the continent's top sports stars turn out for clubs abroad due to an underdeveloped sports ecosystem in Africa. Similarly, many of the biggest names in African music are signed to international music labels in Europe and the US, and make much of their touring revenue in international markets. Meanwhile filmmakers too often need Western backers and distribution platforms to effectively produce and monetize their work.
For perspective — Africa was the fastest-growing music market in the world in 2023, growing at 25% from the previous year according to the global recording music body IFPI — with South Africa driving strong growth in paid streaming revenues. But the continent still accounts for less than 2% of global music revenues. Capitalizing on the rising global consumption of African culture through creative industries would inject much-needed cash into local economies, create jobs, and support the emergence of new talent.
Marie Lora-Mungai, a veteran African creative economy and sports investor, told Semafor there was 'no longer a funding gap for the creative sector' on the continent, saying that the funding ecosystem had become 'richer and more diversified.' Instead, she argued, there was a dearth of companies to invest in. 'Investors are struggling to find deals in which to deploy their available funding. Too many creative sector companies are still informal or semi-formal.' There is a big 'opportunity for consolidation' in the fragmented ecosystem, she added.Nigeria's government last year unveiled a plan to generate $100 billion annually from the creative economy and create 2 million jobs.
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