Multiple Taxation from FG, States Killing Outdoor Advertising Business
In the last 10 years and counting, the Nigerian Out-of-home advertising industry has been plagued by all sorts of intrigues. From over-regulation to policy somersaults and piling debts- all of which have threatened the existence of the industry. Managing Director/CEO, Rainbow Advertising Technologies Limited, Alfred IsahAkokhia,speakstoAdedayoAdejobiontheimpactofCOVID-19ontheindustry,someofthechallenges bedeviling the industry, the way out of the quagmire, the role of the primary regulator in stabilising the industry, and how APCON’s new code of practice will change the face of advertising in Nigeria
What’s your take on what’s the changes that have occurred in the outdoor advertising space in the past 10 years? The integrated marketing communications industry has gone through a lot, but outdoor advertising, from the onset, has had challenges. The past 10 years have been very terrible. The challenges of multiple taxation, non-payment after you have rendered service and the challenges of multiple regulations have always been there. We are however surmounting those challenges. All hands are on deck to ensure that they are minimised.
One thing the outdoor advertising industry has to contend with is the growing importance of the digital world; a threat to traditional advertising. What is your opinion on this?
Digital doesn’t portend a threat to outdoor advertising in Nigeria. Certainly not. The world is dynamic. New technologies are emerging, and we are beginning to experience them in outdoor advertising. The way of doing business and professional practice will change. We have 3D outdoor apertures today. Because our business is specialised, anything digital can only complement what we are doing. It can never put us behind. It can only complement what we are doing. Outdoor advertising exists as a secondary medium. Remember, it’s a reminder medium. And so, it will continue to play its role. For that reason, outdoor advertising will continue to exist. But what we need to do as practitioners is to move with time.
Thank God we are doing that seriously now. Nothing can take the place of the outdoor, especially in a country like ours, where we don’t have constant electricity. So, outdoor advertising is not only performing its role as a secondary and reminder medium but now as a primary medium to a lot of brands.
How has COVID-19 impacted Out-ofHome (OOH) Advertising industry?
The Covid-19 pandemic has seriously negatively impacted Out-of-Home (OOH) advertising industry. At a point when it started, almost all our clients asked us all to shut down operations. Contracts were cancelled, billboards campaigns were halted and it was a huge loss. Again, we have been able to surmount the challenges and we are picking up again. We hope the federal government does not shut down the economy again, because shutting down at the Àrst instance did not help the business, the economy, and the government.
Last week, the government says they are not considering a shutdown, because of its negative eͿect on the economy. It aͿected our business, and even though it aͿected our businesses, the various government regulators were running after us to come and pay taxes. It was very dicult for us.
What do you think is responsible for the seeming disconnect between the regulator and the regulated, and why is it so?
Who is the regulator? I think that is the question we should ask. The law of advertising gives APCON the right to regulate advertising in all its aspect and ramiÀcation. And the law of Nigeria gives local governments the power to collect rates on billboards. To that extent, for outdoor, the local government is the one to regulate outdoor. But all of a sudden, we begin to have diͿerent regulatory agencies being backed up by-laws created by these governments to regulate outdoor advertising. They are the ones who are our problems.
When you go to the local government, they will tell you they have ceded their powers to those regulators to regulate. How can you cede your constitutionally given power to another person? These are the challenges.
Again, what are they regulating? Are they regulating advertising and advertisements or billboards? If they are regulating advertising and advertisements, then they are performing the role of the primary regulator- Advertising Practitioners Council of Nigeria (APCON).
But if it’s billboards they are regulating as though they are regulating houses that people build, why are we paying so much? For instance, for a face of a Uni-pole structure, we pay as much as N3.5million to a regulator. For two faces, that’s N7million. Is it the structure I’m paying that for every year? We need to spell out a lot of things.
The challenges of multiple taxation, all sorts of gangster ways of doing things. In the process, we are at the receiving end. The government we should run to is becoming our problem. It’s a big challenge.
As a practitioner, what do you think, is the way out?
The government needs to look at things holistically by working according to the constitution of Nigeria. The only government organ that can collect rates on advertising is the local government because that is what the constitution says. You cannot cede the powers given to you by the constitution to another body. It is not done. It doesn’t make sense to any person.
I like what APCON is doing. It should seriously take this issue as a big task. It needs to go to court on behalf of all sectoral groups. Let us have a deÀnite solution to the problem, so we know whom we are paying our taxes to and outdoor rates to. They shouldn’t leave outdoor advertising practitioners to face their problems alone. APCON should be more proactive, and our fathers in the industry should sort those issues out. If they need to go to court, or for the constitution to be reviewed they should. I think the new APCON Registrar is doing a
lot of reforms. APCON law has passed the second reading at the National Assembly. This would spell out all the speciÀcs. The code of advertising practice is also being reviewed.
On our part at the Outdoor Advertising Association of Nigeria (OAAN), we have been engaging practitioners all along to see reasons with us. I don’t know how long those engagements will last, but I think there should be a deÀnite solution to those challenges, and the only body which can take up the challenge is APCON, the regulatory body for advertising in Nigeria.
You are on the committee reviewing the APCON Code, what does the code entail, and its import for the industry?
The review is overdue, and it’s a code that has been on for over 10 years. The Minister set up a Ministerial ad-hoc committee to look at it. Every sector of practice is represented. I represent OAAN in that sector and we have been meeting every Thursday so we can meet the deadline. Lots of things this current code did not take into cognisance need to be addressed. Issues of rate, deÀning who a regulator is, what constitutes advertising, how a Media Purchase Order should be, and what should constitute a contract were part of the issues on the front burner. I believe the new code should be able to address those issues we are facing. The new APCON code will sanitise the industry.
The Out-of-home industry is burdened with a deluge of debts. How are you grappling with these near-crippling debts? Is there a united front in addressing the piling debts? What lasting solutions would you recommend for adoption by the industry?
It’s a big challenge and it is crippling our business. Debt is one of the greatest challenges outdoor advertising practitioners face. From my personal experience, I have a lot of friends on the agency side. They will tell you clients have not paid, and truly clients haven’t paid. You begin to wonder why clients wouldn’t pay for a campaign that has been run, whereas a lot of the clients get paid before they sell their products. So why are they not paying?
We also have other people who have collected monies and not remitting to others. There are media owners also. I chair the OAAN Committee on debt review and collection. We asked our members to give us lists of those owing and amounts owed. Lots of them are not coming forward for fear of being blacklisted by clients, by those agencies. And the people who owe you are living fat. When the regulator charges you, they want you to pay upfront. It’s a very big problem, but those debts are there. Some of them have been collected by agency guys and they did not remit. I think the new APCON code will resolve a lot of the problems. Meanwhile, we, practitioners must Ànd better ways of doing business.
What’s the best way to put an end to the many underhand dealings, corruption, and lack of trust between advertising, clients, and industry operators?
It’s a complex cycle, but the problem is one and same-debt. When the new registrar came into power, even APCON is handling it. It set up a six-month-old Standard of Practice (SOP) committee to look at better ways of doing business, business contracts, and debts. It’s not just OAAN they are owing, MPAN, NPAN are also complaining. All they are culprits, they are also complaining. majority of them will collect money and not remit to media owners. And when you take the bold step of reporting the matter to your client, they get angry and blacklist you. There is something wrong, and it comes down to having proper procedures for doing business. When we begin to have that, all these issues will begin to reduce to the barest minimum.
Very soon, and sooner than you can think, there will be standards and procedures put in place, especially in this time of the new registrar. Once that is done holistically, it will solve a lot of problems and lay a better foundation for advertising practice in Nigeria.
With the proliferation of outdoor advertising agencies and regulators competing with you, what is OAAN doing to tackle that?
The challenge of non-registered outdoor companies is part of the challenges we are dealing with. OAAN is like a pressure group. We can only advise. OAAN is the only body for outdoor advertising recognised by the law of APCON, as a sectoral body. It behoves those
who are not members to join OAAN.
APCON should Ànd a way of dealing with all those unregistered and unqualiÀed practitioners. Not just outdoor, but also advertising.
The regulator being part of the business is part of the challenge we at the end of those reviews we talk about, would address. A lot of them are not doing it without the connivance of our members. They are regulators, and for them to say they want to put billboards, they must get a practitioner to design the board and present the board as his own. Being more socially responsible in practice is the Àrst way to start. APCON’s new code will give powers to self-regulation in other sectoral bodies and that will help to resolve these problems. Sectoral groups should be given powers to discipline their members.
What do you see as the role of the leadership of OAAN in the scheme of things?
If you have a leadership that is not proactive, you will always have challenges. The new leadership under Emmanuel Ajufo we have in OAAN, is very proactive and ready to change things. In the last three years, a lot of changes have happened in the outdoor advertising industry. We are reviewing our constitution and all those issues are parts of those the new constitution will be dealing with. There are innovations. We have also made membership easy and not strict. They have set up a good foundation, and I believe that there would be dynamic changes in the next two years. Any other person who will come after Emmanuel Ajufo can build on those standards.
What is your advice to the federal and state governments on issues of over-regulation and policy somersault Out-of-home industry operators are faced with?
World over, outdoor advertising is regulated. Bills and rates collected on billboards are from local authorities because that is what the constitution says. Outdoor advertising is a business like another business. Multiple taxation from federal, states governments, and street urchins are killing the outdoor advertising business. The issue of multiple taxation should be resolved. It’s a big problem. Local governments should be allowed to collect rates on billboards, whilst APCON should do its full regulation through sectoral groups.
We learnt that LASAA is about to concession some route to some companies in Lagos. What’s your take on that?
I have not heard that. But if it’s true, it will be unfair and totally against the spirit of free enterprise. It will kill innovation in the out-of-home platform and create unhealthy competition amongst practitioners. APCON and OAAN should just join forces together and ensure that it does not happen. Lagos is too big to be concessioned to few practioners. 80 if not more of outdoor advertising practice happens in Lagos. It will be rsiky to do that. If it’s true LASAA should rescind that decision so as not to create confusion in the outdoor advertising space.
What’s the future of out-of-home advertising practice in Nigeria?
The future of out-of-home practice is very bright. With new innovations in technology and exposure of practitioners to international standards, the future is bright for out-of-home practice in Nigeria. Government, however, should not strangulate the practice with obnoxious policies like multiple taxation, etc in the name of regulation. I think the practice is unduly overrgulated.
It’s said in some quarters that there are proliferation of out-of-home companies in Nigeria and to help the outdoor companies must come together to make the business strong. What’s your take on that?
I agree with that totally. The out-of-home business in Nigeria like any other business is becoming more and more capital intensive. For sustainability and eciency, we must begin to think of mergers and acquisitions. It’s better to be a manager or director in a company that declares proÀt every year than being the managing director of a company that has no direction or future plans.
The government needs to look at things holistically by working according to the constitution of Nigeria. The only government organ that can collect rates on advertising is the local government because that is what the constitution says. You cannot cede the powers given to you by the constitution to another body
At a point the challenges of street urchins was seriously impeding the practice. How have practitioners been able to resolve that?
That challenge is still there. The only thing is that practitioners have devised a better way and method of managing them. Some of them are in the pay roll of our members while some serve as security for our structures. It’s part of the numerous challenges we are facing.
APCON has functioned for the past three years without a council, why and don’t you WKLQN LW·V D;HFWLQJ WKH SUDFWLFH RI DGYHUWLVLQJ in Nigeria?
Why? I don’t know. May be you should ask them in APCON. It will surely aͿect the practice as major decisions to move the industry forward that need the council endorsement cannot be implemented. Now that we have a substantive Registrar, I believe government should expedite action on that too.