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Self-regulation fails in Nigerian advertising

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By Abiodun Okunloye

Advertising Regulator’s introduced an industry payment policy in the sector.

Following the failure of self-regulation in the advertising industry, the Advertising Regulatory Council of Nigeria (ARCON) stated that it decided to introduce an industry payment policy in the nation’s advertising space. This came about as a result of the prominent stakeholders taking advantage of the weaker ones. The regulatory body provided this clarification in a statement that was issued in response to some of the reasons that were given by the Advertisers Association of Nigeria (ADVAN) for taking legal action against it over some of its reforms.

The rights of ARCON to legislate on contract and payment terms, among other issues, for industry stakeholders were called into question a few days ago by ADVAN. In most parts of the world, payment terms are governed by private contractual terms or as best industry practice agreed upon by stakeholders within a sector in subtle agreement. The association had argued that payment terms are not governed by legislation. Despite this, ARCON stated in its release that the payment threshold framework, as well as regulations, vary depending on the market and industry.

All organisations should concur and support the payment threshold.

In addition, it was mentioned that when there is self-regulation in place in an economy, and it operates effectively, all of the organisations that are a part of the system concur and give their approval on the payment threshold. As a result, it encouraged ADVAN members to continue engaging their ad agencies in the conversation of payment threshold, emphasising that the agreement be consistent with the maximum number of days set by the regulator, which is a 45-day payment circle.

Regarding whether the council has the authority to request access to financial records with no court order or compel organisations to make available private business matters, the regulatory body contended that any government agency with investigative authority has a right to examine information so that it can act appropriately, in accordance with its Act and the constitution. ADVAN is recommended to verify this information with other government agencies with investigative authority. As a regulatory body, ARCON primary remit includes advertisements and marketing communications, so this is the type of data it requests.

ARCON demand all commercials be produced in Nigeria

AskNigeria also reported that on October 23 2023, the Advertising Regulatory Council of Nigeria (ARCON) mandated that all commercials be produced in Nigeria. ARCON director-general Olalekan Fadolapo made it clear the organisation is against the production of commercials outside of the country. He cautioned that if advertising work were outsourced, it would result in capital flight and the disproportionate development of other economies at the expense of Nigeria. Nigerians should only watch commercials produced in Nigeria.

Advertisers establishing their service within the nation’s borders will result in the creation of work opportunities for the country’s youth, the acceleration of the growth of the sector’s additional services, and the maintenance of financial circulation within Nigerian advertising ecosystem. This order is a component of a larger program of industry-wide reforms being carried out by ARCON and will not be revoked. Fadolapo stated that the blackmail and propaganda from the Advertisers Association will not halt the ongoing reforms.

Businesses can be hindered by the new regulations.

However, stakeholders have argued that the ARCON new laws and guidelines are too rigorous and undesirable for the creative industry. On Thursday in Lagos, a creative expert named Alhaji Abdullahi Suleiman issued a statement on behalf of the stakeholders. Suleiman stressed that the goal of regulation should be to strike a balance between the needs of different parties, including individuals and businesses. Moreover, he said, Nigerian brands’ international appeal and competitiveness may be hindered by ARCON requirement that only Nigerian models be used in advertisements shown within the country.

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