The Advertising Regulatory Council of Nigeria (ARCON) has announced that each sectoral group in the nation’s advertising industry is to provide N1billion professional industry insurance cover for its members, as part of the ongoing advertising industry reform.
The sectoral groups are: the Advertising Agencies Association of Nigeria (AAAN), the Experiential Marketers Association of Nigeria (EXMAN), Media Independent Practitioners Association of Nigeria (MIPAN) and the Out of Home Advertising Association (OAAN).
Disclosing this at a media interactive session in Lagos on Tuesday, the Director General of ARCON, Lekan Fadolapo, stated that the insurance cover has become imperative to enable the apex regulatory agency strengthen advertising agencies service delivery, build capacity and capability, as well as ensure long-term stability in the industry.
He explained that the professional indemnity which covers members of the various sectoral groups is part of the corporate licence requirements, expected to take effect from April 1, 2024.
The ARCON boss also hinted on plans by the apex regulatory agency to review the capital structure and working capital requirement of the nation’s advertisement agencies in line with the present economic realities in the country.
According to him, the agency is currently in talks with the Heads of Advertising Sectoral Groups (HASG) and other relevant stakeholders on the minimum capital for registration and license as an advertisement agency.
“As we speak, we have agencies handling big ticket jobs, but whose working capital is not more than N1million. This can’t continue because there is that need to save the industry, and prevent it from collapse. And the way to start is by ensuring that agencies meet a minimum working capital that can shows they have some sound financial footing,” he added.
Fadolapo also reiterated ARCON’s determination to enforce the 45 days credit threshold in the industry, warning that any organization that offers payment threshold outside the 45 –day credit policy will be treated as economic saboteurs of the nation’s advertising industry, and will be handed over to the EFCC.
“Such organisations will be flagged and reported to other government agencies such as the EFCC, NBC for further investigation and necessary punitive actions,” he stated.
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