AN OVERVIEW OF ENTERTAINMENT LAW IN NIGERIA; PROSPECTS AND CHALLENGES

AN OVERVIEW OF ENTERTAINMENT LAW IN NIGERIA; PROSPECTS AND CHALLENGES

BY
VALENTINE T. UGWUOKE (ESQ.). LL.B, B.L.
(ASSOCIATE, TOPE ADEBAYO LLP)

1. INTRODUCTION

Nigeria is richly endowed with creative talents. So far, there is increase reward for
creativity in different dimension especially the entertainment industry. This factor is
necessitated by the fact that various nations of the world have come to realize the socio-
economic benefit of the industry. The internet has been the key driver of this emerging
market. There is need for Nigeria to tap into this potential and to do so; all that is
needed is to create a conducive environment to unleash these creative energies in the
provision of the works of entertainment. Acknowledging this fact, the minister of finance
recently remarked:

One of the things that are being considered is direct funding but clearly,
you don’t actually need direct government funding. You need
government to enable you have to find your own funding because you
have the ability to do that. We simply need to support you better.1

It goes without saying that there is an urgent need for legal and regulatory frameworks
for this industry to thrive better.

In this paper, we will look at the legal framework in the entertainment industry, the tax
regime and how it contributes to the Nigeria’s Gross Domestic Product (GDP). We are
also going to discuss some of the challenges facing the industry and finally, make
recommendations on the way forward.

1Creative Nigeria Summit 2017, Theme: Financing the Film, Television and Music Industries. (July, 17-18
2017), at Eko Hotels and Suits available at https://channelstv.com/2017/07/17/fg-promises-tax-relief-
nigerian-entertainment-industry (last accessed 10 January 2018).
1|Page
 AN OVERVIEW OF ENTERTAINMENT LAW IN NIGERIA; PROSPECTS AND CHALLENGES

2. THE REGULATORY FRAMEWORK

Most often, the term 'Entertainment Law' is used interchangeably with Intellectual
Property. However, intellectual property is just a tiny segment of Entertainment Law.

The Black’s Law Dictionary defines Entertainment Law as:

The field of law dealing with the legal and business issues in
the entertainment industry (such as film, music and theater)
and involving the representation of artists and producers, the
negotiation of contract and the protection of intellectual
property rights.2

It follows that Entertainment Law goes beyond Intellectual property. It is the entirety of
legal services to the entertainment industry. Its scope of coverage extends to Fashion
Law, hospitality, events management among others. The bitter truth is, despite the wide
scope and the socio-economic benefits associated with the entertainment industry,
Nigerian does not have a comprehensive legal framework to cater for this area. Since
there is a dearth of legal and regulatory frameworks, resort are made to intellectual
property laws such as Copyright Act3, Patent and Designs Act4, Trade Marks Act5 among
other laws. No wonder why there are few decided cases dealing with the entertainment
industry.

The Nigerian Copyright Act protects entertainment works falling within the scope of the
six categories of works eligible for copyright protection under the Act. The first three
categories comprise of creative works, namely literary works, musical works and artistic
works.6 Beyond these three categories of creative works, the Act also extends protection
to entrepreneurial rights arising from activities connected with primary exploitation of
the creative works, namely sound recording, cinematograph films and broadcasts.7 The
law confers on the owner of a qualified work the exclusive right to control the doing in

Black’s Law Dictionary, (Bryan A. Garner, 9th Edition, USA: West Publishing Co., 2004) p. 611.
2

3 Cap C28 LFN 2004.

4Cap P2 LFN 2004.
5 Cap T13 LFN 2004.

6 Section 1(1) of the Act.

7
Ibid; the types of works which fall under each category are further defined in section 39 of the Act.
2|Page
 AN OVERVIEW OF ENTERTAINMENT LAW IN NIGERIA; PROSPECTS AND CHALLENGES

Nigeria of certain acts in relation to the work. These include the rights of reproduction,
publication, performance, adaptation and translation of the work.8

The Trade Marks Act regulates and protects a brand of identity; a trade mark is a sign
capable of distinguishing the good or services of one enterprise from the other.9 The
Patent and Designs Act, deals with safeguarding the rights over scientific/technological
inventions from outright coping to knowledgeable or unknowledgeable incorporation of
already patented work and even to the incorporation of such a product that is
sufficiently similar to one.10

Presently there are still many areas that have not been tapped especially in areas like
Entertainment Contracts, Merchandising in the Entertainment Business, Technology
Rights and the Law and The Media; Ownership, Control and Regulation, Sports Law etc.
Ambush marketing11 is still a strange term to us especially in the area of sport. Our players
are moving between clubs locally, there are legal relationships or legal contracts that are
necessary to seal those arrangements. They can’t find lawyers in Nigeria who have
developed those competencies. Scouts are coming in-country to poach the boys in our
local league. We have only witnessed remarkable growth in the area of Intellectual
Property at the expense of other vital areas. There is need to have a body of rules and
regulations to regulate the industry as this will enhance greater productivity, ensure
certainty and promote returns on investment in the industry.

8 A. Oyewunmi, “Towards Sustainable Development Of Nigeria’s Entertainment Industry In The Digital

Age: Role Of Copyright Law And Administration” NIALS Journal of Intellectual Property [NJIP] Maiden
Edition, (2011), 75; See generally, sections 6-8 of the Act.
9 A 'trade mark' is a mark used or proposed to be used in relation to goods for the purpose of indicating or

so as to indicate a connection in the course of trade between the goods and some person having the right
either as a proprietor or registered user to use the mark. A 'trade mark' can also be defined as a distinctive
picture which will indicate to a purchaser of an article bearing it the means of getting the same article in
future by getting an article with same mark on it. See Alliance International Limited V. Saam Kolo
International Enterprises Limited (2010) LPELR-3749(CA); Procter & Gamble Co v. G. S. & D Ind. Ltd
[2013] 1 NWLR (Pt 1336) 409 CA.
10 Uwemedimo v. M. P. (Nig) Unltd [2011] 4 NWLR (Pt 1236) 80 CA.
11 The term "ambush marketing" was coined by marketing strategist Jerry Welsh, while he was working as

the manager of global marketing efforts for American Express in the 1980s. Ambush marketing or ambush
advertising is a marketing strategy in which an advertiser "ambushes" an event (mostly sporting event) to
compete for exposure against competing advertisers.
3|Page
 AN OVERVIEW OF ENTERTAINMENT LAW IN NIGERIA; PROSPECTS AND CHALLENGES

Even countries like Malaysia12 and Brunei13 have entertainment laws which provide for
licensing and regulation of entertainment and places of entertainment.

3. HOW THE ENTERTAINMENT INDUSTRY CONTRIBUTES TO NIGERIA’S GROSS DOMESTIC

PRODUCT (GDP)

Before now, the entertainment industry struggled to generate the desired interest that
will attract investors. However, the increasing demand of Nigerian entertainment
content in music, movies, creative arts, publishing or stage events is gaining market
visibility and global recognition. Interest to invest in entertainers and the entertainment
industry is beginning to grow. The creative sector contributes N1.35 trillion to the
country’s GDP despite the fact that most businesses in the sector are built on personal
business model with a growing number of private individuals beginning to form firm
alliance.14

At the Creative Nigerian Summit 2017, the Minister of Finance, Mrs Kemi Adeosun
acknowledged the potential of the industry. In her remark, she said that the industry is
already captured at 1.42 per cent of the current GDP and that government is willing to
provide all necessary support to help the industry achieve its full potential.15

The role of the Nigerian entertainment industry has increasingly become important as it
generates employment and serves as a tool for poverty alleviation. All segments of the
entertainment industry in Nigeria are growing into multibillion-dollar businesses. The
Nigerian Film & Video Censors Board estimated that Nollywood employs about 1 million
people in Nigeria and the board receives the production of about 2,500 movies

12 Entertainment (Federal Territory of Kuala Lumpur) Act 1992.

13 Entertainment Act Cap 105 Laws of Brunei.
14 Nigerian Entertainment Conference, Key Summary Of the Nigerian Entertainment Industry, available at

https://nec.ng/wp-content/uploads/2017/03/NIGERIAN-ENTERTAINMENT-INDUSTRY.pdf (last accessed

10 January 2018).

Television and Music Industries.” available at https://channelstv.com/2017/07/17/fg-promises-tax-relief-

15 Creative Nigeria Summit 2017/ (July, 17-18 2017), at Eko Hotels and Suits; Theme:
Financing the Film,

nigerian-entertainment-industry (last accessed 10 January 2018).

4|Page
 AN OVERVIEW OF ENTERTAINMENT LAW IN NIGERIA; PROSPECTS AND CHALLENGES

annually.16 It is pertinent to note that great investment opportunities exist in the Nigerian
entertainment industry17 Internet penetration in Nigeria will continue to support and
become a major driver of growth for the sector.

In 2015, the Nigeria’s media and entertainment industry was estimated to be worth
$4billion though, significantly lower than the United States of America that is put at
$598billion. Nevertheless, progress was being recorded as Nigeria was next to India,
which had an estimated sector size worth $17billion. The Nigerian entertainment industry
was expected to grow above $8billion by 2019.18

However, in 2017, the depreciation of the naira means that Nigerian Entertainment and
Media revenue expressed in US dollars is somewhat depressed compared with 2015
figures. Nonetheless, the market rose year on year to US$3.6 billion in 2016, and will
increase at a 12.2% Compound Annual Growth Rates (CAGRs) to 2021, reaching US$6.4
billion in that year.19 In terms of total Entertainment and Media revenue, Nigeria is one
of the fastest-growing countries of those considered.20

4. ENTERTAINMENT TAX REGIME

It is a matter of common knowledge that entertainers especially sportsmen are some of

the highest paid individuals in the world.21 Their income which is often earned in
multiple jurisdictions ranges from image rights, endorsement deals, performance and
appearance fees, royalties from, tournament participation fees, etc. Thus, this makes
accounting potentially difficult. The entertainment industry unarguably has become a

16The Guardian, The Big Names In African Entertainment Gather For Necliv, available at
https://guardian.ng/art/big-names-in-african-entertainment-gather-for-neclive-2017/ (last accessed 10
January 2018).
17 Nigerian Entertainment Conference, Op. cit.
18 Entertainment and Media outlook: 2015-2019, available at
https://www.pwc.co.za/en/assets/pdf/entertainment-and-media-outlook-2015-2019.pdf (last accessed 10
January 2018)
19 Entertainment and Media outlook: 2017-2021, available at
https://www.pwc.co.za/en/assets/pdf/entertainment-and-media-outlook-2017.pdf (last accessed 10 January
2018).
20
Ibid.
According to Forbes, Real Madrid star Cristiano Ronaldo in 2017 signed a contract extension worth $50
21

Million annually. He also signed a life deal with Nike worth above $1 billion.
5|Page
 AN OVERVIEW OF ENTERTAINMENT LAW IN NIGERIA; PROSPECTS AND CHALLENGES

major source of internal revenue for states and nations. Many advanced countries have
developed special tax regimes for such individuals. For instance, in Kenya, they have
Entertainment Tax Act22 which makes provision for imposition and recovery of tax in
respect of entertainment and for matters incidental thereto. Nigeria does not have a
general special tax regime in relation to entertainment. Thus, rely heavily on other tax
laws23 applicable to other individuals and companies.

Worthy of note are the efforts of the Federal Capital Territory (FCT) Abuja and Lagos
State in enacting entertainment law. In the FCT Abuja, there is an Entertainment Tax
Act.24 Pursuant to section 11 of the Act, the Entertainment and Event Centre Fee
Regulations 2014 was made by the Minister of FCT Abuja, to charge fees on
consumption of entertainment and leisure goods and services which includes hotel, hotel
facility other hospitality or leisure facilities or other event centres, as well as subscriptions
on paid television network, internet facilities or traveling agency services. In the recent
case of Hon Minister of FCT Abuja & Anor v. Olayinka Oyelami Hotels Ltd,25 an
entertainment provider went to court challenging the power of the FCT Minister to
make Regulation for the imposition and collection entertainment tax in the FCT Abuja.
Justice Tinuade Akomolafe – Wilson (JCA) delivering the lead judgment held that by the
combined effect of Section 11 of the Entertainment Act and Section 13 of FCT Act, the
FCT Minister is imbibed with such power.

Again, in Lagos State there are Entertainment Tax Law26 and the Sales Tax Law27. Section
1 of the Entertainment Law provides that where at any place of entertainment to which
the public are invited, the provision as to entry is made so however that payment or
contribution is required before entry, and entertainment provided is not exempted, there
shall be levied and paid entertainment tax. Similarly, the Sales Tax Law amongst other
things includes fees/levies charged on decoders, hospitality services and other personal

22 CHAPTER 479 Laws of Kenya.

23Personal Income Tax Act, Companies Income Tax Act, Value Added Tax Act among others.
24CAP 498 Laws of the Federal Capital Territory 2007.
25
[2017] LPELR – 42876 (CA)
26 CAP. E4, Laws of Lagos State 2005.

27CAP S3, Laws of Lagos State 2005.

6|Page
 AN OVERVIEW OF ENTERTAINMENT LAW IN NIGERIA; PROSPECTS AND CHALLENGES

services establishment. The agent i.e owner, manager or controller of any of the above
listed service must ensure they include the entertainment fee (5%) along with the selling
price and value added tax.

These steps are quite commendable but not enough in tackling the tax issues in the
entertainment industry.

Generally, the income of individual entertainers in Nigeria can be categorized as follows:

1. income earned in Nigeria by resident entertainers e.g. fees earned for local
appearances or performances
2. income derived from other jurisdictions by residents e.g. fees earned for
international performances
3. income derived from Nigeria by non-residents e.g. fees earned by visiting
international performers in Nigeria

As it stands now, neither the Personal Income Tax Act (PITA) nor any of the above
mentioned tax laws provided for the assessment of the tax liability of a foreign
entertainer (non-resident entertainer) or a visiting international performer who earns
income in Nigeria.

Juxtaposing Nigerian situation with South Africa, the South African Income Tax Act
provides that any resident who is liable to pay any amount to a foreign entertainer or
sportsperson (who is a non-resident)28 relating to the non-resident’s performance in
South Africa, must deduct or withhold tax at a rate of 15% of the gross payments. The
resident must pay the amount so deducted or withheld over to South African Revenue
Services (SARS) on behalf of the foreign entertainer or sportsperson before the end of the
month following the month in which the tax was deducted or withheld. Failure to
deduct or withhold tax and to pay it over to SARS will render the resident personally
liable for the tax. Either the foreign entertainer or sportsperson, or the resident who pays

28A foreign entertainer or sportsperson who is –

• employed by an employer who is a resident; and
• physically present in South Africa for more than 183 days in aggregate in a 12-month period which
commences or ends during a year of assessment, will not be liable for the 15% withholding tax but will
have to pay income tax on the same basis as a resident, that is, at the rates of normal tax, which requires
the submission of a return of income.
7|Page
 AN OVERVIEW OF ENTERTAINMENT LAW IN NIGERIA; PROSPECTS AND CHALLENGES

the withholding tax must submit a return together with the payment to the
Commissioner.29

Thus, there is need to amend our tax laws to take the issue of taxability of non-resident
entertainers and sportsmen beyond the realm of conjecture or speculation.

4. CHALLENGES FACING THE ENTERTAINMENT INDUSTRY IN NIGERIA

Nigeria is renowned for its creative talents. The country is home to a number of
musicians, actors and sportsmen whose works are widely enjoyed by diverse audiences.
The entertainment industry is however confronted by a number of challenges, key of
which is widespread piracy of works. Nigerian producers constantly bemoan their fate in
the hands of pirates, whose activities have jeopardized their returns on investments,
thereby undermining the economic rationale for copyright protection, and serving as a
disincentive to prospective investors in the sector.30 For instance, in the Nigerian music
industry the works of a number of Nigerian artistes are prominently displayed on
websites all over the Internet. These websites can be seen promoting and offering for
sale, works of Nigerian musicians. Others however, make the works freely available for
downloading, and it becomes possible to enjoy these works without offering
consideration. It is even doubtful if those that offer these works for sale do so with the
consent of the right holder. This development has affected Nigeria’s foreign earnings in
this emerging industry. Even the Nigerian Nollywood industry, don’t generate that much
measurable revenue for Nigerian Entertainment and Media due to issues of piracy
hampering official cinema owners and film vendors.31 Despite the wide
acknowledgement of Nollywood as one of the leading film producers industry, it is not
listed as commanding any market share at UNCTAD Statistics.32

29 Section 47A-47K, Income Tax Act.

30 A. Oyewunmi, Op. cit.
31 Entertainment and Media outlook: 2017-2021, Op. cit.

32 UNCTAD, Creative Economy: A Feasible Development Option, Creative Economy Report 2010,
UNCTAD/DITC/TAB/2010/3, available at
http://www.intracen.org/uploadedFiles/intracenorg/Content/About_ITC/Where_are_we_working/Multi-
country_programmes/CARIFORUM/ditctab20103_en.pdf (last accessed 10 January 2018).
8|Page
 AN OVERVIEW OF ENTERTAINMENT LAW IN NIGERIA; PROSPECTS AND CHALLENGES

As the entertainment industry evolves, the industry is faced with the challenge of finances
to execute its projects. With the banks having limited knowledge of the workings in the
industry, getting loans from them is difficult. Most entertainment companies merely rely
on their savings and funds from the wealthy for production. The effort of the past
administration of Dr. Goodluck Jonathan in establishing $20 million Special
Entertainment Fund via Bank of Industry (BOI)) is commendable. However, not so many
entertainment companies could access the fund. Based on complaints, the administration
approved #3 billion as funding grant under Project Act (Activating Creativity and
Technology in Nollywood). These funding were not enough and more need to be done
in financing the industry for greater productivity.33

The absence of entertainment lawyers and other professional experts in the industry has
not helped matters in improving the industry. It is the responsibility of these lawyers to
help their clients who have joined the industry newly to understand what deals and
contracts will be beneficial for them. They also make these clients aware of their
performing rights. They help clients with understanding how to hire an agent, manager
and accountant. With their awareness of entertainment law, lawyers provide general
counsel to clients. They also aid with inputs on merchandising and marketing deals.
Entertainment lawyers help their clients with tax issues and real estate deals too. It is
pertinent to point out that there is dearth of entertainment lawyers in Nigeria to provide
these services.

Other bottlenecks facing the industry in Nigeria include poor infrastructure and lack of a
comprehensive regulatory framework.

33 Vanguard New, Jonathan splashes N3 billion new grant on Nollywood, available at

https://www.vanguardngr.com/2013/03/jonathan-splashes-n3-billion-new-grant-on-nollywood/ (last
accessed 10 January 2018).
9|Page
 AN OVERVIEW OF ENTERTAINMENT LAW IN NIGERIA; PROSPECTS AND CHALLENGES

5. RECOMMENDATIONS/CONCLUSION

There is need for law reforms to accommodate and handle the different areas of the
entertainment industry. Beyond law reform however, institutional support to combat the
various challenges facing the entertainment industry need to be put in place through
training and other forms of capacity building in the industry.

The study of intellectual property law alone in our universities is not enough in preparing
lawyers to delve into entertainment law and practice. As earlier pointed out, intellectual
property law is just an aspect of entertainment law. We recommend that the intellectual
property law department should be subsumed under the entertainment law department
and its study well systematized.

There are few decided cases relating to entertainment industry in Nigeria. Thus, the role
of the judiciary is very important, a deeper appreciation and expeditious dispensation of
cases relating to the industry will go a long was in making the industry one of a kind.

10 | P a g e