Entertainment can be an alternative investment

Last year during the Budget reading, Finance minister Matia Kasaija painted a rosy picture of the economy predicting strong growth for at least three years.
The minister had listed oil and infrastructure development as the key drivers. However, things have been different, at least in the last one years.
In the year passed by, per capita income grew at 2 per cent compared to population growth of 3 per cent. This was spurred by a number of investments under a budget themed “Industrialisation for job creation and shared prosperity”.

Government’s focus on agriculture, minerals, tourism, oil and gas, seems to be suffocating other sectors that could have provided alternative investment vehicles.
Therefore, it is important that we discuss other opportunities that government could harness to spur growth in order to achieve middle income status although, according to current projections and growth rates, the target looks out of reach unless there is a radical shift to focus on other alternative investments.

Government seems to be set on investing in agriculture through Operation Wealth Creation although it is heavily flawed with a number of challenges which defeats the purpose of wealth creation.
It’s no wonder that growth in agricultural output slowed to 1.3 per cent compared to 2.8 per cent the previous year.
Based on this other investment vehicles such arts and entertainment would be a worthy consideration.
Uganda’s population has over the last 30 years evolved and shares a totally different philosophy from its parents with some youth caring less about what happens with farming.

This can be proved by how youth have willingly sold their parents’ farmland to buy boda-bodas, a largely short term investment vehicle.
However, in the last 17 years the industry has seen some good growth and created role models to that have inspire youth.
This, together with data in the last five years from the Uganda Performing Rights Society, suggests steady growth both in quality and turnover.
Available data indicates that the industry has been posting substantial growth since 2011 peaking in 2015.

For instance, in 2011 the industry posted growth of Shs90m before growing by more than 400 per cent to post Shs500m in 2015.
The growth, which might be more than the numbers above, was registered in a sector that is largely informal and unregulated.
Local music streaming and download sites such as Howwe.biz that lists more than 1,000 artists music on average have 244,000 song downloaded every day but no revenue is remitted to music owners such as Sheebah, Fik Fameica, Da Agent and Vinka, among others, who have released hit lists in the last two years.

The above is an indicator of the prospects and potential of the industry if it were regulated and streamlined with the right regulatory framework and enforcement of copyright and taxation.
Increased finance to enforcement through Performing Rights Society must be consolidated to benefit local talent and protect their copyrights and intellectual properties.

Music streaming is just one of the many ways the entertainment industry can have a higher contribution to Uganda’s gross domestic product.
Already, shows, concerts and corporate brand endorsements for artists have demonstrated the robust nature of the sector in regard to employment and revenue mobilisation among others.
Government and private sector investors need to consider these factors and re-strategise.

As a starting point, government should increase funding towards relevant law enforcement for copyright protection and promotion.
For instance, in Kenya matatus must obtain a music license to play certain song, which on average raises more than $1.4m annually.
The Stage Plays and Public Entertainment Act of 1943 must be repealed and taxable incomes collected from media houses and places of entertainment should be revised to reflect industrial growth.
Media houses use music to generate incomes and as a matter of fact, they owe the copyright holders a certain percentage of revenues generated.
However, sadly though, compliance and enforcement of this is very weak.
Artistes need a better investment climate to grow their incomes so that they are able to mobilse enough money that can be used to growth the industry.

Likewise, a projected increment and investment in related infrastructure of music and video warehousing, sets and related infrastructure needs to be worked on to prop up and provide basis for growth.
As a result, investor confidence will increase in the sector and thus make it more profitable and lucrative in the long and medium term.
Uganda is truly blessed and its rich history, heritage, culture and talents need to be exploited.
About $17m was generated from the Last King of Scotland while Disney hit, Queen of Katwe, generated $8.5m.

Together, Uganda would have earned $25m if the necessary infrastructure and frameworks were in place to produce these movies locally.
Therefore, it is time for government to give the entertainment industry serious consideration as a wealth creation option and prospect for the many unemployed youth.

Surprising

It is surprising for that Uganda’s Vision 2040 Master Plan developed for more than three years by fine economists and technocrats doesn’t mention anything about entertainment or related arts as a prospect for investment, wealth generation or plans government has in the sector.
This has been a shocker and a damning discovery.
The times are upon us and entertainment as a worthy investment vehicle, must to be given significant priority as well for shared prosperity and advancement.

Donald Wasake is a research and financial analyst with business advisory firm Inachee Limited. Email: [email protected]