South African filmmakers are sounding an S.O.S. over the country’s beleaguered cash rebate system, with leading industry bodies demanding answers over unpaid claims and calling for greater transparency from the officials overseeing the cashback scheme.
The country’s 25% cash rebate system has effectively been crippled by what industry representatives say are unexplained delays at the Dept. of Trade, Industry and Competition (DTIC), the government body tasked with overseeing the rebate, which owes untold millions of dollars in unpaid claims to local filmmakers.
Dozens of applications are in limbo, awaiting approval from a department that hasn’t met in more than a year, a fact that Tshepiso Chikapa Phiri, CEO of production powerhouse Known Associates Group, described as “shocking.”
“We should never have gotten here,” Phiri told Variety at the Joburg Film Festival.
On a recent morning in the South African capital of Pretoria, hundreds of members of the local film and television industry picketed outside the offices of the DTIC, demanding that it fast-track applications awaiting rebate approval and settle its outstanding debts to projects that have already been approved, with some claims dating as far back as three years.
“Pay the claims! Pay them now!” Known Associates Group chairman Joel Chikapa Phiri demanded, to rousing cheers from the protesters.
The picket, which was led by industry bodies including the Independent Producers Organization (IPO), the Independent Black Filmmakers Collective, Animation SA and the Documentary Filmmakers Assn., drew on mounting anger from filmmakers who say their industry is paralyzed by ongoing inaction from government officials.
During the event, Joel Phiri delivered a memorandum to a representative from the DTIC which outlined the industry’s grievances and included a list of demands, including the need for an overhauled rebate system “which is simple, reliable and certain, with reasonable time frames for application approval and payment, reduced red tape and a low cost of compliance.”
The memorandum highlighted the contributions made to the South African economy by the film and TV sector, which before the COVID-19 pandemic employed roughly 60,000 full- and part-time workers while generating 8-10 billion rand ($440 million-$550 million) annually.
The industry was hit hard by the pandemic shutdown, and recovery efforts have been hampered by the turmoil with the rebate, with dozens of projects effectively stuck in a holding pattern as they await approval.
“This situation has been worsened by limited communication from the DTIC, and the absence of a clear strategy to foster growth and sustainability,” the memorandum reads. “This inaction threatens not only the livelihoods of those directly involved in these industries, but also the significant economic contributions that the sector makes to South Africa’s economy through its multiplier effects.” (The DTIC had not commented to Variety as of publication.)
The rebate struggles have only compounded a difficult economic reality for the industry. “Our finance pools are quite finite and quite small. We get limited finance from the [National Film and Video Foundation]. We get limited finance from the DTIC, if it even works,” producer and IPO chairperson Marc Schwinges said during a Thursday session at Johannesburg’s JBX market. “It is challenging to work within the framework of South African finance. It’s challenging even with a functioning rebate, but it’s increasingly challenging without.”
Nomsa Philiso, CEO of general entertainment for MultiChoice, said the delays at the DTIC have been “painful” for many producers.
“Everybody is struggling because of the economy. The [free-to-air broadcasters] are also struggling,” Philiso told Variety. “It’s tough. There aren’t unlimited funds, so it puts a lot of pressure on a company like MultiChoice to keep the wheels turning,”
The company, which is South Africa’s largest commissioner, feels a “responsibility to the industry,” she added, insisting that MultiChoice was “not slashing the budgets” anytime soon. “Not commissioning is really not an option…[because of] the impact it has on the value chain,” she said.
Cape Town’s typically thriving production services industry is also feeling the squeeze, with the uncertainty surrounding the rebate adding to the broader turbulence of recent years, including COVID-19 shutdowns and the dual Hollywood strikes.
Lynne-Anne Vosloo, CEO of production services giant Moonlighting Films, admits that after experiencing “one of the busier years we’ve ever had” in 2023, business has been slow to return to pre-pandemic highs. “We all thought that once the strikes were over, there would be an influx of work — which, strangely, didn’t happen at all,” Vosloo told Variety.
Nicola Unsworth, head of production at crosstown rival Film Afrika, said the South African industry “definitely felt the impact” from the corporate mergers and cost-cutting moves that have tightened commissioning budgets in Hollywood, noting that a lot of projects that had been in development “fell off the slate.”
The company has been bolstered by Netflix’s live-action “One Piece” adaptation, which recently wrapped Season 2 in Cape Town. The streamer’s biggest production in South Africa to date has “really helped sustain a lot of the industry,” according to Unsworth, with sound stages at Cape Town Film Studios fully booked by Netflix.
Netflix’s live-action “One Piece” adaptation is filmed in Cape Town.
Casey Crafford/Netflix
Nevertheless, Unsworth said several projects that were in talks with Film Afrika to shoot in South Africa ultimately declined because of the rebate uncertainty. The company’s COO, Marisa Sonemann-Turner, said her team has now “moved away from the reliance on the rebate [in negotiations] and focused more on the value for money that we can offer,” highlighting South Africa’s relatively low production costs and favorable exchange rate. “We really bend over backwards to make your money work,” added Unsworth. “And it all goes to the screen.”
For Moonlighting’s Vosloo, currently servicing Gina Prince-Blythewood’s star-studded fantasy epic “Children of Blood and Bone,” the lack of dialogue between the South African government and industry has been especially frustrating. “We aren’t able to give our clients any kind of a proper update, because there’s no communication from the DTIC to the industry,” she said. “Absolutely nothing. We’re kind of in the dark.”
In the wake of the protests in Pretoria, Known Associates’ Tshepiso Phiri said DTIC deputy minister Zuko Godlimpi proposed a working committee to facilitate dialogue with the department, as well as bi-weekly meetings between industry and government reps, something she described as a “big step.”
“He was very clear that the department must make a plan to pay the outstanding claims,” she said. “We don’t have any definites, but at least they’re communicating.”
Meanwhile, others in the historically resilient industry remain cautiously hopeful that they’ll find a way to break the impasse. “People are very optimistic. No one is throwing in the towel,” said Philiso.
“If you think about the industry historically, we’ve had dips before,” added Vosloo. “We’ve had times where the industry has dipped, but we’ve always risen again.”
The Joburg Film Festival runs March 11 – 16.
