“Cut,” shouted 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 told The Times with a grin.

One of Nigeria’s top film-makers, accompanied by his crew and an armed police escort, Amata had barely arrived at this encampment of stilted shacks and wooden huts beside one of Lagos’s filthy lagoons when three young 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 film-maker 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 defaecate into the water only yards from others washing and trying to rinse ragged clothes.

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

The Times 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.

Amata said: “The material here is so rich, it is just there for the taking.

“The poverty is grinding — only in Nigeria do you get this so close to places where people have so much.”

He is one of the pioneers of Nollywood who is now leading the charge to make films of a higher quality.

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

It called for greater support to nurture the industry so that it can exploit the huge market that it has uncovered. 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 £19,000 to make. On the streets they sell for about £1.50 a copy.

About 20 titles used to emerge every week, selling thousands of copies. The industry is now said to be worth upwards of £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.

However, 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.

“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 gel with people — their everyday experiences are too different. For Africans, those films are fantasies.” Mr Ejiro, who looks more like a nightclub bouncer than a film mogul, with tight black T-shirt and sparkling bling jewellery, said that the industry is now 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 twenty. We are aiming to improve quality and training rather than going for quantity.”

Mr 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,” said Mr 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, said: “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. Film-makers 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,” he said.

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. “The future can be fantastic but we need people with vision in Government, which we don’t have,” Mr Obazele said.

Movers and shakers

Kanayo O Kanayo After almost 30 years in the business, Kanayo sees himself as “The founding father of the nation of Nollywood”. The actor, whose real name is Anayo Modestus Onyekwere, is arguably the most successful in the country. He became a household name after featuring in some of the most popular Nollywood films and soaps, including Checkmate and Living in Bondage. Kanayo often plays the ruthless bad guy, willing to do anything for money — a role that is seen as a true reflection of the “get rich quick” attitude plaguing Nigerian society

Omotola Jolade Ekeinde Tall and pretty, Ekeinde is otherwise known as “Omo sexy”. The actress is the glamour girl of Nollywood, with a taste for expensive cars with personalised numberplates. Married to an airline pilot, she had her white wedding aboard a Dash 7 aircraft as it flew between Lagos and Benin City. Her favourite pastimes include modelling, music, writing and charity work. Ekeinde has acted in some 250 movies, and won 22 local and international awards

Bob-Manuel Obidimma Udokwu An actor, producer and director, Udokwu has taken all three roles in productions including Matters of Hearts and Master Strokes. With a fan base in Nigeria and across the world, he played lead roles in the films Circle of Doom, Evil Genius, Beyond the Vow, When the Sun Set and Piccadilly

Genevieve Nnaji Dubbed the Queen of Nollywood, the 30-year-old glamour babe started acting in films as a child. In 2005 she won the African Movie Academy Award for Best Actress in a Leading Role, and has also won awards in Dublin, London and the US for her work. Her ambition is to win an Oscar for Nigeria

Desmond Elliot A fast-rising star, Elliot is often picked for romantic roles — in large part thanks to his boyish charm. He is a deeply religious actor, and does not regard himself as a star, but instead someone carrying out God’s will. His ambition is to move into politics after acting, and to become the governor of Lagos State