While Nigeria’s creative industry is widely viewed as a potential economic powerhouse, capable of driving significant economic growth and global cultural recognition, it has long been stymied by a lack of substantial support. Made up of vast potential sectors like film, music, and festivals, past governments had often failed to back these sectors with the necessary funding and infrastructure, limiting their growth, but that looks like it’s about to change.

The Federal Government has announced a major $618 million investment in the Digital and Creative Enterprises (iDICE) project to boost the country’s creative industries, with a specific focus on the carnival sector. This initiative was announced by Vice President Kashim Shettima during a meeting with representatives from the Abuja International Carnival at the Presidential Villa, earlier this week, sparking optimism within the industry.

This investment aims to boost various segments of the digital and creative industries, focusing on carnivals and other cultural showcases as viable economic drivers.

With carnivals playing an increasingly central role in both cultural expression and economic growth, the Nigerian government’s strategy is reflective of global trends in cultural investment.

Shettima emphasized the $5 billion valuation of the global carnival market, underscoring the potential economic gains such a project could yield for Nigeria.

The iDICE initiative is crafted to offer essential support across Nigeria’s digital and creative sectors, spotlighting carnival events as valuable cultural and economic assets. Shettima highlighted the cultural significance of carnivals, viewing them not only as festivities but as avenues for promoting national unity, preserving heritage, and generating significant revenue.

“Beyond promoting our rich cultural heritage, it is a driver for national unity and cohesion. We also have to look at the potential for economic value addition,” he remarked.

Nigeria’s approach to nurturing this sector aligns with successful global examples. Shettima referenced international carnivals like the world-renowned Rio de Janeiro Carnival, which draws nearly 200 million attendees annually, as evidence of the economic benefits such cultural showcases can deliver.

Nigeria’s own carnivals, including the famous Calabar Carnival, hold strong cultural and economic significance, especially for the Efik/Ibibio people, drawing thousands of tourists each year and serving as economic engines for local communities.

However, given that previous funding efforts for creative industries have often faltered, skepticism surrounds the likelihood of this initiative making a tangible impact.

Nigeria’s creative industry, while rich in talent and unique cultural products, has often been left to develop on its own without comprehensive government backing. Filmmakers, artists, musicians, and other creatives have historically had to rely on private funding or foreign grants, with minimal assistance from the government.

Many industry professionals argue that previous government pledges to support the creative sector have rarely materialized, creating a trust deficit between creatives and policymakers.

However, Shettima’s $618 million pledge and remarks acknowledging the carnival industry’s role in economic development signal a shift in narrative, suggesting the administration may see cultural projects as an asset in the country’s economic growth plan. But the short history of the present government has cast a shadow of doubt on the pledge.

Many highlight that the current administration, led by President Bola Tinubu, has been accused of making well-publicized policy announcements without concrete follow-through. Some argue that government support is often more symbolic than substantive, with few policy initiatives resulting in sustained industry development.

If history is any indicator, these fears are not unfounded. Previous funding initiatives, including past investments in digital and creative projects, have frequently fallen short of expectations, with funds often disappearing in bureaucratic red tape or being distributed ineffectively.

Calls for Sustainability

The recent investment in iDICE could indeed offer a turning point, but stakeholders insist that for it to be successful, the government must establish mechanisms to ensure effective fund distribution, monitor the implementation process, and prevent bureaucratic mismanagement. Experts also suggest that the government consider partnerships with private-sector organizations that have experience in managing creative projects, as these entities are often better positioned to ensure efficient resource allocation and project execution.

Industry voices are also advocating for the development of policies that support intellectual property rights, artist protection, and funding security, all of which would help the industry flourish beyond this initial investment. If the government can establish a solid policy foundation to accompany its financial support, this could signal a new era of growth for Nigeria’s creative industry.

Kehinde Adegbite, CEO of the Abuja International Carnival, expressed gratitude for the support, sharing plans to collaborate with the Ministry of Art, Culture, and the Creative Economy.

“The carnival brings unity, empowers the youths, and helps discover talents,” Adegbite stated, pointing to the impact these events have on youth empowerment and cultural promotion.

However, for the creative industry to contribute meaningfully to Nigeria’s economy, it is believed that the government must demonstrate a sustained commitment to its development.

Tinubu’s administration has been advised to seize this opportunity to build on the global interest in Nigerian culture by backing creative projects with reliable funding, transparent implementation, and an infrastructure that supports talent development. Industry stakeholders believe that if the iDICE project is implemented effectively, it could lay the groundwork for future investments and partnerships, bolstering confidence in the government’s support of the industry.

In Harvard Business Review in an article titled “Why Africa’s Industrialization Won’t Look Like China’s“, I wrote: “In its attempts to industrialize, Africa has looked toward China’s success. China designed and executed a policy that shrank the industrialization process in a mere 25 years — something many economies took at least a century to do. That redesign has brought immense dislocation in global commerce and industry, enabling China to become one of the world’s leading economies. African leaders have been pursuing policies designed to mimic China’s path.

“But despite these efforts, Africa has yet to advance in its industrialization at the same speed China did. Put simply, the things that worked for China will not work for Africa. Africa must change its focus: It must encourage internal consumption and intra-trade, push forward the African Continental Free Trade Agreement, create a single African currency, improve infrastructure, and invest in education”.

Today, we are learning that “Over 25% of Google’s code is now written by AI—and CEO Sundar Pichai says it’s just the start”.

Expanding my hypothesis: America and Western Europe will not just keep their factory jobs, they will also keep their graphic design, coding and similar jobs because robots and AI will do those jobs in their lands. The implication is massive: the entry level mundane jobs US companies used to outsource to the developing world, are now being disintermediated by AI, and would be done at home.

So, as Google pushes 25% of its coding jobs to AI, most of those coding schools in the developing world which have relied on winning those roles will be gone. Google only needs experienced coders as AI will do what the entry level guys used to do. Now you get why those big techs are firing people every quarter: as AI gets better, it will replace some of those making it better!

This is why those building coding schools in Africa to farm coders and techies for US and European companies must rethink. We just need to push our governments to understand that we must develop our local markets because AI is now a huge competitor in those cross-border remote jobs and roles! (We have explained how to navigate this transition in Tekedia AI in Business Masterclass program ).

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The National Economic Council (NEC) has recommended the withdrawal of the Tax Reforms Bill currently under consideration in the National Assembly, which has been opposed by northern leaders.

Headed by Vice President Kashim Shettima and comprising governors from across the country, NEC’s recommendation comes amid heated debates and regional tensions surrounding proposed changes to the distribution model for Value Added Tax (VAT). The council has suggested that more engagement with stakeholders is needed to address these concerns before proceeding.

Oyo State Governor Seyi Makinde, speaking to journalists after an NEC meeting on Thursday, explained that the NEC decided to withdraw the bills due to the controversies they have sparked.

“We want stakeholders to be carried along,” he stated, emphasizing the need for more inclusive discussions around the proposed tax reforms.

Acknowledging the need to carry all stakeholders along, the Chairman of the Presidential Tax Reforms Committee, Taiwo Oyedele, said on Wednesday, “We share the sentiment expressed by the Northern Governors regarding the inequity inherent in the current model of derivation as a basis for distributing VAT revenue… We will collaborate with all stakeholders to address this concern with a view to finding a balanced solution that achieves a win-win outcome for all.”

This latest recommendation by NEC follows Sunday’s meeting of the Northern Governors’ Forum (NGF), chaired by Governor Inuwa Yahaya of Gombe State. The NGF openly rejected the derivation-based VAT model proposed in the bill, arguing that it would disproportionately disadvantage northern states. The north’s concerns about this model were further clarified by Nasarawa State Governor Abdullahi Sule, who explained that the proposed changes would place northern states at a significant disadvantage due to their comparatively low VAT revenues.

Sule, underscoring the unity among northern leaders, stated that their decision was not in opposition to President Bola Ahmed Tinubu, whose administration initiated the tax reforms.

“We can’t bring in President Tinubu and then oppose him,” he clarified. “If you look at the composition of the meeting, you’ll see people from different political backgrounds—some from APC, some from PDP, and others unaffiliated. We reached this decision collectively.”

Sule detailed the crux of the north’s concerns saying: “If we move forward with this derivation-based VAT model, states that generate little to no VAT will end up at a disadvantage. Northern states currently generate less VAT than the southern states, and altering the revenue-sharing model could reduce the already limited revenue flowing to these states.”

Drawing from his experience, Sule highlighted that VAT collection often takes place where products are processed or imported, such as ports in the south, rather than in the northern states that supply raw materials.

Earlier in the day, Bayo Onanuga, Special Adviser to the President on Information and Strategy, commented on the broader “misunderstandings and misgivings” surrounding the tax reforms. He reiterated that the changes outlined in the new VAT distribution model aim to promote a fairer system.

According to Onanuga, the current VAT system distributes revenue based on where the tax is remitted, not where goods and services are consumed or supplied. He argued that this model disadvantages states that supply goods consumed in other regions, as they do not receive a corresponding share of the VAT revenue.

“The reform seeks to correct this inequity,” Onanuga explained. “The new proposal considers the place of supply or consumption for relevant goods and services. Northern states that produce essential commodities, like food, should not lose out on VAT revenue simply because their products are VAT-exempt or consumed elsewhere. The model aims to create a balanced approach that reflects actual economic contributions across states.”

Concerns Over Derivation-Based VAT Model

The derivation-based VAT model has been a contentious issue, with stakeholders divided on its implications. Supporters of the new approach argue that it would allow states that generate more VAT to retain a larger share of the revenue, fostering economic accountability and encouraging self-sufficiency. This change could particularly benefit economically vibrant states like Lagos and Rivers, which generate substantial VAT from high levels of commercial activity and industrial output.

However, opponents contend that this model would create disparities among regions, exacerbating economic inequality across states with differing production capacities.

The VAT redistribution bill has been hailed as Nigeria’s closest step to fiscal federalism since the 1960s. However, the opposition from the northern states underscores a broader challenge in achieving a unified tax reform policy that equitably serves Nigeria’s diverse regions. Northern states rely heavily on federal allocations due to limited internally generated revenue, and a derivation-based VAT model could potentially shrink their revenue pool even further.

Under the current VAT model, all VAT collected across the country is pooled and redistributed according to a formula that allocates a higher percentage to states with higher populations, effectively subsidizing those with lower VAT revenues.

For the North, adopting a derivation model would mean sacrificing this redistribution advantage, potentially widening the fiscal gap between the regions. Many argue that this change would favor the southern states, as they host the country’s major economic centers where VAT collection is centralized.