Africa uncovers the potential of its purple economy

By Ronak Gopaldas

If ever there was a time to radically diversify and scale Africa’s economic growth, it is now. The continent has for too long been dependent on its mineral wealth and external demand for economic growth, leaving it prone to boom and bust cycles. A sector often overlooked is the continent’s ‘purple economy’, a term that refers to the creative arts and cultural goods and services. A nascent sector in terms of monetisation, it is at the core of economic wellbeing, and gaining new prominence in a highly globalised world.                                     

With interconnectedness accelerating through digital platforms, Africa’s purple economy has an ideal post-pandemic window to leapfrog and be a powerful job creator. Its trajectory is all the more promising given growing recognition of original and authentic media content, not just from consumers, but from investors. Rather than taking Africa to the world, the world is starting to come to Africa.

From the continent’s sporting prowess, to music, fashion and cinema, Africa has the potential to follow the Asian growth trajectory as India did with Bollywood or South Korea with K-Pop. Asian investors too, have a unique opportunity to get in at the ground floor. This piece will unpack Africa’s burgeoning purple economy, its potential, what it can learn from Asia’s success in fostering its growth and the opportunities for international investors to share in the benefits.

1. The colour, purple.
2. Going viral: Africa’s growing cultural traction in a changing world.
3. Rising stars: the role of best supporting actor.
4. Show me the money: Opportunities for talent scouts.

1. The Colour Purple

Backed by the United Nations Educational, Scientific and Cultural Organisation (UNESCO), the first international Purple Economy Forum was held in October 2011, with Africa holding its first Purple Economy Forum in November 2016.^[1] Attention to this sector, however, waned in subsequent years. The definition of purple economy itself blurred with other issues such as gender, care, and economic inclusivity of the most marginalised in society.^[2] In fact, the purple economy covers all the above (figure 1).

Figure 1: The purple economy is at the centre of linking old forms of growth with new

At its core, however, the purple economy is about placing culture at the centre of sustainable economic development and growth^[3] and is also referred to as the creative economy^{[4] [5]} – (figure 2).

Figure 2: The sectors of the creative economy

The need for greater prominence of the purple economy received impetus again in June 2020, when a group of prominent Nobel laureates published an opinion piece in the French daily, Le Monde^{[7] [8]}titled En dépit de son importance croissante, le culturel n’a pas suffisamment été pensé comme un écosystème (translation: Despite its growing importance, culture has not been sufficiently thought of as an ecosystem). In it, they argued that culture is inextricably linked to all forms of economic added value, and must feature more prominently, particularly in regions that are less economically affluent.^[9] As such, it favours economic and political readjustments for the benefits of emerging markets.^[10] The piece was a response to the economic fallout of the Covid19 pandemic which has necessitated new strategies to entrench sustainable development.

The creative economy is estimated to employ more than 30 million people and generates 3% of the world’s GDP (approx US$2.25 trn) (figure 3). For a continent like Africa with a large youth population the creative economy is arguably the fastest growing job creator for workers aged between 18 to 25 years of age, making it “the industry of tomorrow”.^[11] In a 2008 report UNCTAD found that Africa’s creative potential was highly underutilised.^[12] Part of the reason for this is the continent’s diversity of cultures. The creative industry is fragmented. Production, marketing, and distribution of creative output is disjointed, and commercialisation is poor. In recognition of its importance, the African Union declared 2021 as the year of “Arts, Culture and Heritage: Levers for building the Africa we want”^[13] to highlight the “significant contribution culture and the arts can make to socio-economic development, poverty alleviation, job creation and social inclusion”.^[14]

Figure 3: UNESCO estimates of the contribution of the creative / purple economy

This potential is a function of both a generational shift and a change in mindset. Younger Africans are realising that cultural and creative industries can be a lucrative space, not just as an artist, but also in support and production functions. Digital platforms and media have grown potential audiences exponentially and allowed content to spread organically. The concept of employment has also changed from fixed hours, roles, and tasks to a borderless freelance one with greater flexibility and creative license. The new formula presents the continent an opportunity to realise the potential of its youth and mine the creativity of its rich cultural diversity and heritage. At the same time, western consumers and creators are looking for fresh inspiration and new ideas and experiences having grown weary of variations on hackneyed themes. Given Africa’s difficulty in translating mineral wealth into equitable economic prosperity, a concerted drive to leverage the continent’s cultural diversity will allow a broader base for growth.^[15] Finally, Africa’s economic fortunes have always been tied to extraction, but artistic creation and cultural celebration can be a significant employer and economic driver and elevate Africa’s status as a serious player in the purple economy.^[16]

2. Going viral: Africa’s growing cultural traction in a changing world

As borne out by the rising prominence of African musicians, artists, authors, celebrities and sporting figures, Africa’s purple economy is beginning to go global. Across all pillars of the creative economy (figure 3), African culture and creativity is receiving wider recognition and acclaim. Much of the validation has come from internationally renowned superstars, among them Rihanna, Beyoncé, Jay Z and Diddy, their support helping spread the continent’s offerings.

In 2018, Rihanna danced South Africa’s popular “gwara gwara” during her performance at the Grammys while Beyoncé and Diddy have regularly expressed their admiration for Nigerian musician Fela Kuti by incorporating his music and instrumentals in their work.^[17] Africa has also served as inspiration for blockbuster films such as Black Panther, where the creators of the mythical Wakanda drew inspiration from both ancient as well as contemporary African cultures.^[18] The movie was a departure from the way Hollywood has typically portrayed Africa. It showed Wakanda as an advanced empowered society and drew inspiration from its rich history, culture, and experiences. Marvel had produced superhero movies before, but never a solo superhero movie with a black star or a predominantly black cast. Black Panther ended up making US$1.3bn worldwide and its runaway success in East, West and Southern Africa was a testament to the desire of Africans to have their culture and artistic expression recognised.

To be sure, there has been criticism of cultural appropriation. African artists have often been angered by what they believe is the unlawful use of their intellectual property by Hollywood studios. South Africa’s hugely popular Amapiano music genre was borrowed by British singer, Jorja Smith for her track ‘Piano to the world’. Rather than an endorsement of the style, South Africans were scathing in what they felt was a watered down and westernised version of their beloved music, which excluded them both artistically and financially. DJ Maphorisa, one of South Africa’s preeminent producers said of the track: If you don’t involve us, it’s not Amapiano. Disney’s trademark of “hakuna matata^[19]” for its Lion King movies essentially monetised and robbed the Swahili people of a part of their own language and culture.^[20] Similarly, Ghana’s iconic Kente cloth featured prominently in Louis Vuitton’s SS21 menswear collection^[21] designed by American Virgil Abloh who is of Ghanaian descent. Kente is, however, far more than just a fabric for Ghanaians. It is political, denotes cultural belonging, tribal affiliation, and even social hierarchy. For many Ghanaians, it loses its symbolic value when mass produced for global commercial consumption.^[22] African culture has also inspired Swedish home furnishing giant Ikea to design a new range of furniture^[23], but rather than appropriate the style, the family-owned firm has hired the continent’s top designers, compensating them for their work and allowing them to be a part of showcasing Africa’s creativity and diversity.

Even as the world is starting to take notice of African culture the Africans themselves are not waiting for international validation. They are making their own way onto the global stage. From South Africa, award winners such as DJ Black coffee^[24], Master KG, the Jerusalema hitmaker and talk show host Trevor Noah have all forged their own way with their unique styles and curated their own brand. Their brands have become a valuable commodity, not only for their careers and earning capacity, but for the brands, management agencies and sponsors that had backed them early in their career.

The South African Cultural Observatory (Saco) estimates that the country’s cultural and creative industries contribute US$ 4.2 bn, or 1.7% to the country’s economy annually and has been growing three times the national average.^[25] The country’s support of the creative arts has historically been poor, mismanaged and without focus and the figure could quite easily be far greater despite already being more sophisticated and advanced than the rest of the continent.

Many Nigerian creatives too have succeeded despite insufficient funding and even curbs on creative expression in their home country, particularly when it challenges the political status quo. Grammy winner (2021) Burna Boy is one of the continent’s most successful musicians and internationally renowned. Nigeria’s movie industry dubbed “Nollywood” has become the world’s second largest film industry behind India’s more popular Bollywood, producing almost 2,500 films annually and generating US$600m in revenue. The term Nollywood was coined by New York Times journalist, Norimitsu Onishi in 2002, and means “nothing wood”, or creating something from nothing.^[26] Today, Nollywood accounts for 5% of the country’s GDP and is the second largest employer after agriculture. In 2020, Bollywood met Nollywood in the first collaboration between the two film industries with the release of Namaste Wahala which was taken up by Netflix. Such partnerships not only provide an invaluable knowledge sharing platform but allow for the cross-pollination of ideas and shared cultural values.

The Kenyan creative scene is also rising in prominence.^[27] Nairobi has become a thriving melting pot of contemporary artistic expression, with the Circle Art Gallery hosting the annual East Africa Art auction since 2013.^[28] Buyers from around the globe regularly bid online for works from renowned Kenyan artists like Wangechi Mutu and Michael Soi whose works are highly sought after and fetching high prices.

But it is not just Sub-Saharan Africa (SSA) that has discovered the economic potential of its culture. Egypt, Algeria and Morocco too have a thriving film and music industry. Egyptian movies and pop songs have long been popular across the Arab world. Prior to the Covid-19 outbreak, the industry had employed at least 500,000 people and generated US$ 72m - the highest in the Arab world.^[29] In response to the pandemic, streaming service Egypt Watch iT saw a surge in subscriptions, demonstrating both the adaptability of Africa’s arts and culture industries as well as its ability to scale and monetise due to strong demand.

In sport, footballers like Didier Drogba (Ivory Coast), Michael Essien (Ghana) and Samuel Eto’o (Cameroon) have become household names and sought-after brands ambassadors. There are many more across various sporting codes, music genres and forms of artistic and creative expression. From Senegal’s Akon to Congo’s high fashion Sapeurs^[30], Kenya’s “dandies” and South Africa’s I’khothane battles^[31] (setting alight designer clothes to demonstrate wealth), the continent’s youth culture is reaching far beyond its borders. Nigerian-Dominican fashion designer Theresa Cotton runs a women’s casualwear boutique in Singapore’s hipster Arab Street. Her African inspired prints (Ankara) as well as hand block prints from Jaipur, India are a hit with local as well as expatriate clientele.

3. Rising stars: the role of best supporting actor

Africa’s cultural, artistic, and creative value proposition lies not only in its uniqueness, but in its diversity. Its rising popularity may have come at a fortuitous time. The lockdowns imposed by the global pandemic forced many to look for new inspiration and entertainment. Master KG’s global gospel hit, Jerusalema became a feel-good anthem around the world and inspired the #JerusalemaChallenge (dance routine), which served as a brief escape for frontline health workers. Nurses and care workers from Angola to Bucharest recorded themselves dancing in synch to its foot-tapping beat and their YouTube videos instantly became a global sensation. The track itself was streamed more than 85 million times on Spotify, entered Shazam’s Global Top 200 Chart and received more than 1 billion views on TikTok.

The pervasiveness of smartphones, low cost of the Internet and digital content creation means that creative material can be disseminated worldwide at the touch of a button. Thanks to social media platforms such as YouTube, Twitter and Facebook it can quickly acquire a global audience.

Digital art

The virtual era has also given rise to new forms of art and expression such as non-fungible tokens (NFTs) which rely on blockchain infrastructure to create a non-replicable digital token. These ‘tokens’ can take the form of music, art, literature or even tweets.^[32]

NFTs offer a new way for African creators to sell their original works and retain the copyright and royalties.  They have a feature that pay the artist a percentage of its reproduction or sale. Indeed, it may be a new way for content creators and artists to protect the intellectual property rights of their work and reap the financial rewards of its demand. While the NFT phenomenon is still its infancy and its full potential not yet realised, African creators have been quick to seize on the opportunity. Nigerian Artist Osinachi regularly sells NFT works for up to five figures. The need for monetising digital creative work has given rise to NFT marketplaces such as WeAreMasters, founded by Uyi Amokaro of Nigeria.^[33] NFT consultancies like Magic Carpet Studios are helping African artists overcome the barriers to entering the digital marketplace by addressing fees and lack of technical ability.^[34] In South Africa, Worldart launched the country’s first NFT gallery auction in 2021.^[35] Currently, African art sales account for less than 1% of the US$50bn global art market but NFTs could grow that share substantially.^[36]

There are, however, still many hurdles for African artists and creators to overcome before the continent can reap meaningful economic benefit for their creations, many of which are self-imposed. Many governments like Nigeria are cracking down on the crypto market which has implications for emerging NFT artists both in terms of access to the blockchain and compensation for their work via crypto currencies. More broadly, access to funding is the primary constraint. With more pressing demands coming from education and healthcare African governments typically allocate very little from their national budget to culture and the creative arts. Despite its notable expansion digital access remains a challenge to the continent. African creative talent, for most part, remains largely relegated to the informal sector or survives on the fringes of the formal sector.

Lessons from the East

There are many valuable lessons that can be drawn from Asian markets that have successfully formalised their cultural and creative trades. The Republic of Korea operationalised the Convention on the Protection and Promotion of the Diversity of Cultural Expression in 2005.^[37] The East Asian economic powerhouse has a clear ambition to be the world’s biggest pop culture factory.^[38] Together with UNESCO, it developed the Korea Funds-In-Trust (K-Fit) to help creative sectors in Uganda and Rwanda both financially and through policy development and entrepreneurship education (figure 5).

Figure 5: K-Fit Fund’s focus and reach

Korean cultural and creative content exports are valued well over US$10bn and creates more than 650,000 jobs. Youn Yuh-jung won the best supporting actress Oscar for her role in “Minari” in 2021^[40], while Korean film, ‘Parasite’ made history winning the Oscar for best picture in 2020.^[41] It is estimated that of every US$100 in Korean cultural goods exported, another US$248 of related consumer goods is exported, demonstrating the benefits of a flourishing purple economy throughout the value chain.^[42] In 2017, K-Pop music group, BTS alone was responsible for 7.6% of total foreign tourism in South Korea.

Japan has an equally enabling and supportive arts and culture environment and while J-Pop (Japanese pop music) has been overshadowed by Korea in recent years, it is still very competitive.  The Japanese Agency for Cultural Affairs provides extensive funding / grant support for emerging artists, boosting not only the country’s rich heritage, but also up and coming art forms and artists. Its 2020 budget was strong on infrastructure development and maintenance, boosting tourism as well as investing in and promoting new, more modern forms of cultural and artistic expression (figure 6).

4. Show me the money: Opportunities for talent scouts

More than just government and donor grants (which were already severely constrained prior to the pandemic) the arts and culture sectors in Africa require public sector policy reform and private sector investment in three key areas:

1. Creative and artistic infrastructure such as stadiums, galleries, concert venues and studios.
2. Human capital support and development such as training academies, scholarships and mentorship.
3. The legal protection of intellectual property rights and enforcement of royalties.
   

In Africa, foreign investment in the creative sector is not nearly as sizeable as in technology start-ups or manufacturing ventures which are typically linked to performance benchmarks and return on investment. This is understandable. The sector is far more diverse, informal and disaggregated. It can be difficult to pick a winner. Because returns are difficult to quantify and often less tangible, foreign investors have largely shied away from the sector save for a few production houses and music labels. Foreign investors usually only arrive once success and goodwill have been achieved.

Not only has this left a large pool of artists vying for a piece of a very small pie, but it has left the door wide open for local investment, which can afford to be far more discerning. Local communications and public relations (PR) firms like Africa Creative Agency and OnPoint PR represent some of the continent’s biggest stars and influencers. Africa Creative Agency is a multi-form digital and creative agency helping businesses grow their digital presence and brand recognition. Its clients include Fox, MTV, Comedy Central, Samsung and National Geographic. OnPoint PR, a communications agency has delivered more than US$300m in publicity over the last decade working with some of the continent’s most highly sought-after fashion brands and artists.

One international outfit that has ventured more assertively into Africa is Jay Z founded Roc Nation which manages some of the biggest names in music and sport globally. On the continent, the company represents football club Mamelodi Sundowns and rugby players Sbu Nkosi, Siya Kolisi and Cheslin Kolbe among many other talented individuals.^[44] Roc Nation saw the value in investing in a sport obsessed continent.^[45] The company offers distribution, sponsorship deals and brand management and have scouted talent in Nigeria, Ghana, Senegal and South Africa among others. The partnership with local artists and sports stars have been lucrative for both the company and the talent. Realising the growing popularity and participation in basketball on the continent, the NBA has invested heavily in infrastructure with a view of turning the new Basketball Africa League into a scalable, commercial product, and sees it being the top sport throughout Africa within the next 10 years.^[46]

The attraction of investing in African creatives, apart from their diversity and growing international appeal, is that it offers far higher returns as talent can be secured relatively cheaply and on favourable terms, not only because of the backer’s (usually) dollar-based war chest, but because international agencies and investors offer global reach and distribution channels to link local artists to international audiences. Further, they are competing against far smaller local agencies that don’t have the resources to compete for the continent’s best talent. The prestige of being represented by a global outfit, or at least one with extensive reach in developed markets means potentially tapping into the lucrative cultural symmetry and identification with African Americans.

It is, however, not only about backing the right talent. More broadly, there are extensive opportunities to invest in infrastructure and support industries such as film and recording studios, music and performance venues, digital talent platforms, public relations firms, communications agencies and social media management. Many of these skills, already well developed among Asian investors and companies, are lacking across the continent but in demand from emerging talent looking to grow their market presence and exposure. The continent’s infrastructure deficit has also dissuaded many big-name international acts from touring extensively in Africa, with performances usually limited to South Africa. Despite the shift to digital distribution, live performances are an important facet of growing Africa’s recognition among Western artists and for the promotion of local talent.

Like Roc Nation, Netflix with more than 200m subscribers^[47] has been swift to support and add African content to its platform such as the South African drama series Blood and Water, realising there is strong demand both on the continent and around the world, and not just from African diaspora communities which are substantial. Spotify (165m subscribers) and Universal Studios too are beginning to expand their presence on the continent to cater to the demands of its digital subscribers from around the world.

For their part, African governments and policy makers must do more not only to foster and promote the sector, but to attract international investment in the industry to boost growth. It is in their own interest as cultural and creative exports are becoming an increasingly important tax revenue generator. It is also a way in which African states could exert a measure of what Oluwaseun Tella^[48] calls “soft power”, essentially influence and diplomacy.^[49] Earnest policy reform, ensuring the intellectual property rights and creative freedom of artists and creators coupled with action that takes the continent’s arts and culture industry as seriously as the rest of the world is a starting point. Moreover, under the African Continental Free Trade Area (AfCFTA) the trade of cultural and creative content within the continent will not attract duties as in the past. Encouraging signs are emerging. In 2020, Afrexim Bank announced a two year US $500m funding support for Africa’s cultural and creative products. The bank understands how potent a growth driver the sector can be if its commercial potential is actively harnessed and is actively driving this message at international investor roadshows.^[50]

To be sure, there are risks, both reputational and financial, if the investment is not nurtured and constructively managed. Pretty Yende, Vuyani Mlinde, Pumeza Matshikiza, Luthando Qave, Fikile Mvinjelwa and Golda Schultz are world renowned sopranos and baritone stars. Few, however, know that they all left their home country - South Africa, for foreign shores to seek fame and fortune. They left because of lack of opportunity, infrastructure, and support.^[51] A lack of funding, the impact of Covid-19 lockdowns and no support from the government saw the iconic Fugard and Labia theatres close in South Africa in 2021, leaving even less room for African artists and filmmakers.^[52]

Nevertheless, given the lack of international competition for continental talent and Africa’s large emerging youth culture^[53], the upside can be considerable. By international standards the investment required for unleashing the potential of creative talent in Africa is very modest. It is after all, starting from a low financial base. The opportunity to quickly scale and leapfrog laggard growth sectors is considerable. Bolstering the outlook for both African artists and foreigners who invest in the sector, is just how quickly new digital platforms can shape demand, influence culture, and monetise through brand sponsorship, advertising and royalties.

From music, art, fashion and sport, the world’s embrace of African culture, language and creativity is not merely a fascination or a passing phase. It is the long-coming recognition of its value, uniqueness and deserved place in the world. The future is bright for Africa’s arts and culture sector and for those who venture to support it.