How South Africa saved its rebate and pulled the industry back from the brink: We're 'back in business'

The long nightmare may be over for South African producers, whose industry has been crippled for more than two years by a rebate program that was, for all intents and purposes, stalled. Nellie Molokoane, director of film and television production at the department, spoke at the Durban FilmMart this week.

After more than two years of almost complete paralysis, the nation's 25 percent cash rebate program appears to be back on track.

The long nightmare may be over for South African producers, whose industry has been crippled for more than two years by a rebate program that was, for all intents and purposes, stalled.

Speaking at the Durban FilmMart this week, Department of Trade, Industry and Competition (DTIC) director of film and television production Nellie Molokuane insisted the government body tasked with administering the country's 25 per cent cash discount had finally turned a corner. "The department is back to work," Molokwane said. RELATED STORIES Why Gary Vaynerchuk Is Going All In With 'VeeFriends' Brand Collections: 'This Could Be The Biggest Business I've Ever Made' Jason Blum On How 'Other Mom' Won That Controversial Title, Kristen Bell Joins 'Violent Night From Blum House 2' And More

After months of political pressure from industry bodies rallied under the Save SA film and television industry coalition, the DTIC is now working on a slew of 2024 rebate applications and claims, with Molokoane holding out while the fighter sector tries to right the ship. Popular in Variety

"We know the industry is bleeding right now, but we're doing our best," he said.

The news elicited a collective sigh of relief from filmmakers and industry groups in Durban, which have sat down with South African officials over delays in processing rebate requests, bureaucratic bottlenecks, a lack of transparency from their government counterparts, and general questions about the future of the once-thriving incentive program.

"The worst is over," said producer Delon Baker, who serves as president of the Independent Producers Organization. We are very confident that we are now moving in the right direction. "We're not sure how fast, but we're definitely making progress."

The crisis dealt a devastating blow to the South African industry, which was already feeling the strain, with the exhibition sector collapsing, global broadcast networks cutting back on investment in local production and domestic broadcasters – including the struggling public broadcaster, the SABC – unable to sustain the industry.

"We're talking about thousands of jobs. We're talking about hundreds of companies that have lost because of this. We're talking about projects that have had claims that haven't been paid two, three, four years later," said Paul Bayes, a producer at Rose and Oaks Media. "It's really pushed everyone to the limit."

DTIC has taken significant steps in further paying approximately 2 billion rand ($121 million) in unpaid rebate claims and has set aside approximately 1.5 billion rand ($91 million) to finance the rebate until 2029.

While those producers who spoke to Variety were cautiously optimistic that the industry has finally turned the page, much work remains to be done. Their biggest concern is what form the stimulus program will take moving forward, whether it's a modified version of the existing cash rebate program, a tax credit plan or an alternative proposal.

However, after months of often contentious negotiations with government officials, local producers are grateful that both sides have found a way to break the impasse. "Ultimately, everybody wants this done, and ultimately, we want to work with the department," Bakker said. We want peace. We want a period of prosperity.

For his part, the polar Molokoan – who has faced calls for his resignation from industry bodies – struck a conciliatory tone in Durban.

We have been engaging the industry since last year to say how can we best support this industry? And I know that maybe the industry has been informed that DTIC is not on board. We're willing ... to work with you to ensure we have a sustainable industry."

For now, domestic producers are quite optimistic that such political goodwill will last, while their foreign counterparts are seeking reassurance that the discount is back on solid footing. "It's going to take some time to get that confidence back ... and build that trust internationally," said Steven Markowitz, a producer at Big World Cinema.

South African filmmakers, however, say the rebate crisis has been a wake-up call that has not only strengthened the industry, but strengthened their determination to build a sustainable film and television business - with or without an effective incentive program.

"There's a willingness to try and get things done in this crisis," Markowitz said. "I think we will go beyond that and look for other ways to break our dependence on DTI subsidies for every film we make."

"These obstacles and challenges constantly force us to rethink different ways of doing things and different ways of making our films and telling our stories," added Lila Swart of Yellowbone Entertainment. "And I think despite everything, that's always what we do. We're fighters and we're constantly standing up for things that work for us."

Durban FilmMart takes place from October 9-12 in Durban, South Africa.