"CUT," shouts the director, Jeta Amata. "Oh, that was perfect. You see, man, that's what happens when you shoot in Lagos: everything's here.
"You just hang around, and it comes to you," he says with a grin.

One of Nigeria's top film-makers, Amata, accompanied by his crew and an armed police escort, had barely arrived at this encampment of stilted shacks and wooden huts beside one of Lagos's filthy lagoons when three boys fishing from a canoe drifted by.

Behind them, in the naval section of the port, loomed a Nigerian warship - just the shot that the young filmmaker needed to illustrate a scene in his forthcoming film Black Gold - an epic by Nigerian standards about oil, pollution and corruption in the Niger Delta, where kidnapping by militants rules out location work.

Nollywood, the country's phenomenally successful home-grown video film industry, makes little use of extras or props. Crews of as few as eight or nine people, with no special effects teams or lighting technicians, just turn up at places such as local markets or roadside slums, armed with little more than a small digital video camera.

Local people, satisfied with the promise of a free DVD of the finished product, are willingly co-opted as actors. In this slum, goats, stray dogs and chickens mingle in piles of rubbish, and children defecate into the water only yards from others washing and trying to rinse ragged clothes.

With great enthusiasm and much laughter, residents quickly group together to play crowd scenes, happily shouting obscenities at distant security forces, a daily occurrence.

This reporter offered a white hand to illustrate an old man being interviewed by an international television crew. "The oil companies will have to pay for this mess," the old man yelled convincingly.

"The material here is so rich, it is just there for the taking," Amata says. "The poverty is grinding:

only in Nigeria do you get this so close to places where people have so much."

Amata is one of the pioneers of Nollywood who is now leading the charge to make films of a higher quality. His most recent production, Amazing Grace, was shown worldwide. Nollywood began about 20 years ago with the birth of home video cameras, and is now a movie-making machine that churns out about 600 titles a year. Many are soap operas with titles such as Destiny and Tinsel, which are watched on new low-budget television channels mushrooming across the continent.

UNESCO, the UN's cultural organisation, said last year that Nollywood was now the second-biggest film industry in the world in terms of output, after India's Bollywood.

It is now also the country's second-largest employer, after the federal government, though figures vary enormously depending on what is being shot at the time.

Historically, producers made these straight-to-video titles cheaply, with no foreign investment and - until recently - little local endorsement. The films can take about a month to complete and cost no more than pound stg. 19,000 ($31,400) to make. On the streets they sell for about pound stg. 1.50 a copy.

About 20 titles used to emerge every week, selling thousands of copies. The industry is now said to be worth more than pound stg. 100 million a year.

Critics, particularly in the West, dismiss the quality of the productions, which are usually love stories, historical epics or voodoo tales. But across Africa the films are loved: uncovering a potentially huge market for the industry.

There are about 150 million people in Nigeria, and more than 800 million in sub-Saharan Africa as a whole, most of whom are spellbound by Nollywood's outpourings.

Zeb Ejiro, vice-chairman of the Nigerian Film and Broadcast company, and the man who is credited with creating the industry, explains its attraction.

"What is unique is that we tell our African story our own way: we are telling our own story and they, the audience, can see themselves in it and relate," he says.

"People see it and say, `Yeah, that's how my grandfather said it.' This is true across the continent.

"The differences between African states are nothing like as big as they are with the United States or Western Europe.

"Western productions, slick as they are, do not jell with people: their everyday experiences are too different. For Africans, those films are fantasies."

Ejiro, who looks more like a nightclub bouncer than a film mogul, with tight black T-shirt and sparkling bling jewellery, says the industry is at a crossroads.

"The trend has changed. We have tried to raise the standard, and now the industry is also digitally based. That has really

helped with better quality.

"Now I would say we are doing about three to four films a month instead of 20. We are aiming to improve quality and training rather than going for quantity."

Ejiro, nicknamed "the Sheikh", created Ripples, the country's first soap opera, which gave many young aspiring actors and actresses their first break. It ran uninterrupted on television for five years.

Most evenings, he and the other Nollywood movers and shakers hold court at a Chinese restaurant called O'jaz, nestling under the National Stadium in Surulere, an area where 80 per cent of production houses are based. It is a long way from Beverly Hills and there is no glamorous Los Angeles hillside sign.

Instead, under tatty Chinese lanterns, plastic-coated tables are quickly covered with bottles of

Johnnie Walker whisky, slices of lime, Red Bull and pear juice.

The conversation is animated, the enthusiasm infectious. Writers, producers, actors, distributors all drop by.

"This is the melting point, this is the heart of Nollywood,' says Ejrio, his arm around Bob Manuel Udokwu, one the country's top actors, who got his first break in Ripples.

Amid much back-slapping and high-fives, all agree that the future is bright, but fear a lack of government support could yet kill off the industry.

The same technical progress that has helped improve quality also contains its greatest threat: piracy.

Paul Obazele, president of the Association of Movie Producers, says: "We just can't compete, and the Nigerian Copyright Commission is a joke. The truth is that the government has only paid lip service to this industry. Filmmakers here in Nigeria are becoming serious and need support.

"There is [only] so much we can do with the private sector alone; we need government to provide the structure and environment in which the industry can flourish but the government is complacent.

"By inaction they risk killing the goose which can lay a golden egg."

The Commonwealth Business Council is now supporting the industry, and this year will organise a business roundtable at which it hopes to encourage the private sector to invest. It is also trying to develop links with Bollywood and encouraging the Nigerian government to see the potential of what is on its doorstep.

"We have colonised Africa, so to speak, we have surprised the United Kingdom - which thinks nothing good comes out of Nigeria - and we are taking America and the diasporas by storm," Obazele says.

"The future can be fantastic but we need people with vision in government, which we don't have."

The Times