Media Rates to remain deregulated in Nigeria, ARCON unveils new Regulatory Frameworks for growth
By Zion Rufus
Signaling a proactive approach to addressing challenges, promoting growth, and ensuring sustainability in the Nigerian advertising industry, the Advertising Regulatory Council of Nigeria (ARCON) has announced that media rates in the Nigerian ad industry will continue to remain deregulated. The Director-General of ARCON, Dr. Olalekan Fadolapo, firmly asserted the need for a free-market approach in determining media rates, insisting that no stakeholder or group should regulate the pricing strategies of Nigeria’s media houses.
According to Dr. Fadolapo, Nigerian media houses deserve the same level of autonomy and respect as their foreign counterparts operating within the country. This decision to let demand and supply dictate media service transactions aligns with fostering a competitive environment and allowing market forces to drive economic growth.
The rationale behind keeping media rates deregulated is rooted in the belief that this approach can significantly contribute to the growth of Nigeria’s economy. By avoiding interference in pricing mechanisms, the advertising industry can harness its full potential, attracting investment, fostering innovation, and promoting healthy competition. A deregulated media environment encourages businesses to explore diverse advertising strategies, leading to increased revenues and job creation. Fadolapo also believes that such an approach will empower Nigerian media houses and drive the industry towards sustained growth.
The ARCON DG further addressed concerns about the capital flight resulting from the production of advertisements abroad, buttressing the need to curb this trend.
He stated, “All commercials to be exposed to Nigerians should be produced in Nigeria.”
This directive aims to create job opportunities for Nigerian youths, promote the growth of the support service sector within the industry, and circulate funds more effectively within the Nigerian advertising ecosystem. To discourage the outsourcing of advertisements, ARCON announced that commercials produced outside Nigeria would be subject to heavy taxation, and the variation rate would be reviewed upwards shortly.
In addition to the decision to keep media rates deregulated and promote domestic production, ARCON unveiled a series of new regulatory frameworks designed to reshape and rejuvenate the Nigerian advertising industry. These frameworks include the implementation of Professional Indemnity for sectoral groups like AAAN, EXMAN, MIPAN, and OAAN, a review of the capital structure and working capital requirements for advertising agencies, the enforcement of a 45-day credit threshold in the advertising industry, and the creation of a robust data bank for Nigeria.
One of the crucial elements of ARCON’s strategy involves ensuring strict adherence to the engagement and disengagement procedures outlined in the Advertising Industry Standard of Practice (AISOP). The Council aims to enhance transparency, ethical conduct, and accountability within the advertising sector, fostering a more trustworthy and reputable industry.