ARCON Announces N1bn Indemnity Insurance for Advertising Agencies
The Advertising Regulatory Council of Nigeria (ARCON), has announced a mandatory N1 billion professional indemnity insurance for ad agencies under sectoral bodies like; the Association of Advertising Agencies of Nigeria (AAAN), Experiential Marketing Association of Nigeria (EXMAN) and Outdoor Advertising Association of Nigeria (OAAN).
Announcing the development in Lagos, ARCON Director General,
Dr. Lekan Fadolapo said; “As part of the ongoing advertising industry reform and the need to strengthen advertising agencies service delivery, build capacity as well ensure long-term stability in the industry, each sectoral group, is to provide N1B (One Billion Naira) professional industry insurance cover for its members. This covers professional indemnity for members of their association as part of the corporate license requirements.”
Fadolapo, who described it as part of corporate licensing requirements coming into effect on April 1, 2024, also announced sweeping reforms aimed repositioning the Nigerian advertising industry for growth and development.
He rolled out a broad framework articulating the government’s urgent priorities and action plans to reposition the advertising industry.
He announced a series of measures to strengthen regulation, build capacity, ensure financial stability and promote the use of local talent and resources within the sector.
According to him, ARCON is also reviewing minimum capital and working capital thresholds for agencies in consultation with industry stakeholders.
“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. ARCON is currently in talk 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. Regulatory guidelines will be issued as soon a position is taken on this,” Fadolapo said.
On the critical issue of payment terms, the DG revealed ARCON is collaborating with the EFCC, NBC and others to enforce a maximum 45-day payment cycle for ad services. “Any organisation that offered payment threshold outside 45 credit policy will be tagged as economic saboteur of the Nigeria advertising industry. Such organisation will be flagged and reported to other government agencies for further investigation and necessary punitive actions,” he warned.
Restricting use of foreign talent models and voices in adverts targeting Nigerians except where absolutely essential after securing ARCON approval is another reform.