Expert analysis reveals bleak economic growth steady rise in adspend at ARCON Conference
By Oghale Mafuru
Latest analysis has revealed a glooming national economic index as advertising spend is projected to rise by 18% with an estimation of $600 million expected to be driven by the beehive of electioneering activities which precedes the 2023 General elections.
Speaking at the National Advertising Conference ongoing in Abuja in a presentation titled: “State of the Economy”, Mr. Ademola Adigun, independent Consultant and Executive Vice President of the Metacura Development Initiative, Ademola Adigun, stated that that in 2023, TV and Out of Home advertising will still remain the dominant spending areas as internet advertisement continues to surge with a marginal rise of about 3% from 2021.
According to him, expenditures in the advertising market will contract in the second quarter of 2023 and rise by the third quarter as removal of subsidy next year will increase inflation by 40% in the second quarter and then diminish to about 15% by the third quarter.
As the economy is projected to shrink further, Arts and Entertainment is estimated to contribute less than 2.5% to GDP as GDP growth is projected at about 3% and which be driven by Services estimated to rise to about 47%.
“Naira will depreciate by about 25% due to FX shortages with associated instability but should be stable by the third quarter if there is a rate convergence.” he said.
Mr. Adigun while stating that there will be a massive decline in revenue as the country is largely a mono-economic with high consumption rate revealed that multi-dimensional poverty in Nigeria is about 64% as unemployment rate sits at 33%, expected to decline further.
He advised stakeholders in the advertising industry to work assiduously to mitigate the myriad of challenges in the economy as current inflation rate stands at 22%, real inflation in some basket of goods at over 45%.
However, Mr. Adigun projected that there will be an increased drive in Internal Generated Revenue, IGR by Federal and State governments to meet revenue shortfalls and consequently, more states will have signage regulatory agencies as CBN will have to increase borrowing in the domestic market to meet revenue shortfalls.
While stressing that revenue challenges will remain significant, the economist advised that government expenditure must increase to balance initial decline.
According to him, although the national debt profile surging, borrowing remains a viable way to stimulate the economy while government expenditure is expected to increase money in circulation.
He said: “Borrow yourself out of this crisis”.
He assured that despite the glooming economic realities and predictions, there is still a glimmer of hope for the advertising industry but that all hands must be on deck to explore the opportunities that still exist. He noted that the Advertising Regulatory Council of Nigeria, ARCON as the apex regulatory body in the country should introduce frameworks that will spur the growth of the industry.
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