Sectoral bodies to provide N1bn indemnity insurance bond, says ARCON


By Godwin Anyebe

Starting from April 1, 2024, the AAAN, EXMAN, MIPAN and OAAN key sectoral groups under the Advertising Regulatory Council of Nigeria (ARCON) are to provide N1B (One Billion Naira) professional industry insurance cover for their members.

This is part of the ongoing advertising industry reform and the need to strengthen advertising agencies’ service delivery, build capacity and capabilities as well ensure long-term stability in the industry.

The Director-General/CEO of ARCON, Dr. Olalekan Fadolapo made this known to newsmen recently in Lagos while announcing a set of sweeping reforms aimed at repositioning the industry and building a sustainable industry at a press conference in Lagos. ‘The N1billion covers professional indemnity for members of their Association as part of the corporate license requirements’.

According to the DG, the new reforms are in line with Federal Government policy of economic recovery, inclusive growth, development of local talents, and the directive of the Hon. Minister of Information and National Orientation, Alhaji Mohammed Idris on the need to strengthen the Nigerian Advertising Industry regulatory framework and reverse the negative trajectories currently plaguing the industry.

The contentious issue of media debts and payment circles also came under the scrutiny of the new reform. According to Dr Fadolapo, ‘Some stakeholders have been offering Nigerian media and other service providers 120 days payment circle, thereby impoverishing the Nigerian advertising industry. These same stakeholders prepay foreign media houses operating in Nigeria for media services. Some had insisted on old practices that have led to industry debt and exploitation of media owners. We can no longer allow this to continue.

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In light of the above, ARCON approved a 45-day Payment Threshold for all players in the industry. To give bite to its position, the regulator will collaborate with EFCC, NBC and other government agencies to implement the 45-day credit threshold in the advertising industry.

“Any organisation that offered payment threshold outside 45 credit policy will be tagged as an economic saboteur of the Nigeria advertising industry. Such organisations will be flagged and reported to other government agencies for further investigation and necessary punitive actions.”

Other parts of the new regulatory frameworks being championed by ARCON for the advertising industry include –

Capital Structure, Working Capital, ‘There is an urgent need to review the capital structure and working capital requirement of the advertisement agencies in line with economic realities and capacity building programmes of ARCON’.

The DG disclosed that ARCON is currently in talks with the Heads of Advertising Sectoral Groups (HASG) and other relevant stakeholders on the minimum capital requirement for registration and license as an advertisement agency.

On the Use Of Local Talents: ARCON will continue to insist that Nigerians should be considered as primary in all advertisements targeted at the Nigerian market. The use of foreign models and voices are banned except where these are inevitable. In this case, variation will apply. The sum which was previously fixed at N3 million would likely skyrocket as the DG hinted that the authourity has frowned on the current rate as grossly inadequate. ‘Where about NI billion Naira is spent producing a commercial outside Nigeria and the agency returns with just a flash N3 million cannot adequately be an appropriate deterrent for shooting commercials outside Nigeria’, he said.

The government regulatory agency is also working on Data Bank for Advertisement Agencies as part of its effort to build a robust and beneficial data bank for the Nigeria advertising industry. ARCON has commenced a national audit of advertisement agencies to ensure that only licensed advertisement agencies are engaged by companies and oragnisations. ‘We have started reaching out to advertisers both private and public organisations, State Signage Agencies among others and a directory of advertising agencies in Nigeria will be produced following the audit exercise’, the ARCON DG revealed.

On Media Rates Deregulation, the ARCON’s new reform maintains that Media Rates remain deregulated in the Nigerian Advertising Industry. ‘No stakeholder or group of stakeholders should regulate media rates charged by the Nigeria Media Houses. The policy rather advocates, ‘Let demand and supply determine sales and purchases of media services as it is in the other sectors of the industry’.

Engagement and Disengagement Protocol – All stakeholders are requested to adhere to the engagement and disengagement procedure as stated in the Advertising Industry Standard of Practice (AISOP) as ARCON is said to have commenced full implementation of the AISOP framework. ‘Where an agency is disengaged without proper reconciliation of financial matters before engaging another agency on the same account, and ARCON is petitioned. The new agency and engaging organisation will be investigated, and where they are found culpable, they will be sanctioned’.

To stem the issues of exposure of unapproved advertisements, illegal advertising practices, and damaging actions of unregistered persons claiming to be advertising practitioners among other challenges, ARCON would publish its membership register as soon as the ongoing membership review exercise is concluded.

In line with the reforms, ARCON will continue to insist on the production of advertisements in Nigeria to discourage the capital flight and development of other economies by some Nigerian organisations’ attitude of going out of the country to produce advertisements meant for our market. ‘All commercials to be exposed to Nigerians should be produced in Nigeria. We need to create jobs for the Nigerian youths, help grow and develop the support service sector of the industry, and circulate funds within the Nigerian advertising ecosystem’ the DG insists.

In the same vein, a National Policy on Out-of-Home (OOH) Advertising is also in the offing. A Committee chaired by the Director General of ARCON will plan and organise a national workshop on OOH advertising business with active collaboration with States’ Signage Agencies and OAAN on the need to formulate a broad base OOH Advertising regulatory framework for the industry.

Also, the ARCON DG revealed that the council will continue to engage all stakeholders in ensuring a win-win situation for the growth of the industry in particular and the Nigerian economy in general. ‘We need the support of all stakeholders to sanitise the Nigerian advertising industry and create a better ecosystem’.

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