IP securitisation: Economic antidote in Nigeria’s creative industry

It is no longer news that the Ministry of Arts, Culture, and Creative Economy has taken a bold step in championing and signing a memorandum of understanding to ensure the securitisation of Intellectual Property in Nigeria, especially within the creative sector. The minister in charge of the ministry is so passionate about the success of this initiative, which would encourage the youth to depend on and utilise their talents and skills in innovating and inventing solutions to societal problems.

Securitisation is the process of pooling and arranging intangible assets into marketable securities that can be sold to interested investors. IP securitisation in Nigeria would be a big chain economy that would involve various parties from different professions, the right holder is not losing the right but would be warehoused by a special purpose vehicle or entity that would midwife the transaction.

Securitisation also involves the mortgaging or pledging of the royalties that would emanate from the production of the creative art before the production. Some parties are within the process to ensure safe delivery: the originator, who can be the company or an individual who created the asset to be securitised, the special purpose vehicle, and an entity created to warehouse the rights on behalf of the originator. The main purpose is for transparency and safeguarding the investor’s investment. The investors are people who are willing to invest their money by paying the SPV, while the IP asset-backed security is used to pay back.  The service provider, a company that plays a managerial role, ensures payment is made as and when due, while rating agencies are assessors that assess actual payment ability, considering the risk that may be attached to the transaction. The credit enhancer protects the investment by way of insurance.

The process pulls a lot of professionals together, which in turn creates jobs and employment on its own. Note that the artist would engage a lot of people for production and service that would, in turn, put a smile on people’s faces.

The recent Ojude Oba Festival is a testament to what can happen in the creative sector. There are various designs of regalia, venue dressing, and display of talents in various ways. It’s a clear indication that employing what we have to get what we want is not a bad decision, by going the way of securitisation.

David Bowie was able to raise $ 55m as far back as 1997 in the US on the expected royalties of his song; sport too witnessed a secured transaction of $1.4bn US, in securitisation in 1999, the recent ones in 2025 is a €245m credit facility provided by Afreximbank to New World TV, a Togolese broadcasting company, to finance their acquisition of exclusive sports media rights across 24 African countries. While a $3m facility to Mediwood Studios (Tunisia) for film production expansion, also secured by IP outputs. These deals highlight the increasing use of IP as collateral for financing, demonstrating the growing recognition of intangible assets as valuable financial instruments.

This move would remove the burden of selling his personal belongings to innovate and produce movies or songs. The traditional source of funding, which is the bank, is a no-go area, due to the demands for tangible assets for collateral.

The Nigerian government would make back a lot of resources via taxes and levies on after-production and services, it is something achievable to unlock the potential lying fallow around our nation. The government can encourage the banks and insurance sectors to seize this opportunity to develop this sector to the utmost and open up our tourist centres that could attract investors and tourists all over the world.

The law and the economy should have a meeting point for the success of securitisation in Nigeria; the valuation of such assets is paramount before they can access the fund. The viability of such is also key, while the law spells out the protection of various rights involved.

• Akinwumi, an estate surveyor and valuer and IP valuer, writes from Lagos