- Effective regulation is crucial for a modern society to establish standards, guidelines, and rules for safety, fairness and order.
- But overregulation can hinder economic growth, stifle innovation, limit competition, and create inefficiencies, as illustrated by the cabotage law and new advertising regulations in Nigeria.
- To foster a thriving advertising ecosystem in Nigeria, ARCON should prioritize collaboration, transparency, flexibility, education and capacity building, and streamlined approval processes, etc.
Effective regulation is crucial for any modern society, as it establishes standards, guidelines, and rules that ensure fairness, safety, and order. The role of regulation should be to balance the interests of various stakeholders, such as consumers, investors, businesses, and society as a whole. Regulations should be evidence-based, transparent, proportionate, targeted, and responsive to changing circumstances, avoiding unnecessary burdens and unintended consequences.
For example, the European Union’s General Data Protection Regulation (GDPR) is an instance of well-crafted regulation that strikes a balance between protecting consumer privacy and enabling businesses to operate effectively. GDPR sets clear guidelines for data protection and privacy while ensuring that businesses can still use consumer data for legitimate purposes.
However, ambiguous or non-stakeholder inclusive regulation can hinder innovation and economic growth. In Nigeria, a rapidly growing economy, entrepreneurs and small businesses play a vital role in driving economic expansion and creating jobs. Excessive regulation can make it challenging for them to operate, stifling innovation and limiting growth potential. For instance, burdensome licensing requirements and bureaucratic obstacles can deter new businesses from entering the market, leading to reduced competition and fewer consumer opportunities.
A classic example of over-regulation is the repealed “cabotage law” in Nigeria, which mandated that only Nigerian-flagged vessels could engage in coastal trade within the country. This law led to a lack of competition, resulting in higher costs and inefficiencies within the shipping industry.
These concerns have been raised by businesses in Nigeria in response to the new laws and guidelines introduced by the Advertising Regulatory Council of Nigeria (ARCON). Stakeholders have described the new laws as restrictive, archaic, and detrimental to the creative industry. For example, ARCON’s mandate for using only Nigerian models in advertisements shown within the country could limit the global appeal of Nigerian brands and hinder their ability to compete on the international stage. Nigerian brands operate in several countries, if regulators of other markets tow the same line as ARCON, it would greatly affect our indigenous brands’ opportunities in other parts of the world.
Additionally, ARCON now requires skit makers to obtain approval for all advertising material before publication or face penalties. This regulation resembles the previously repealed Nigerian film censorship law, which demanded that every film be approved by the National Film and Video Censors Board (NFVCB) before release. This law created delays and discouraged filmmakers from producing content in Nigeria.
Responsible online advertising should be an inclusive project involving government, online platforms, advertisers, agencies, and various online communities. One example of a successful multi-stakeholder approach to regulation is the Internet Corporation for Assigned Names and Numbers (ICANN), which manages the global domain name system through collaboration with governments, businesses, and civil society organizations. No county in the world, including China has successfully monitored its online or social media space with regulations only.
ARCON’s Standard of Practice, published in October 2021 grants itself the power to decide commissions, pitch fees, and payment terms for private organizations within the advertising industry, as well as their clients. It also claims the authority to establish a tribunal to pass judgment on defaulters. These provisions appear to overstep the constitutional freedom of legal business entities to enter into contractual agreements and suggest a dictatorial approach that undermines the nation’s constitution.
ARCON positions the need to eradicate Capital flight as its basis for the very prohibitory laws, however, ARCON has not been able to substantiate its claims, as it does not have the actual figure of advertising spend in Nigeria. ARCON cannot even ascertain the contribution of every naira spent on advertising to the Nation’s GDP.
If ARCON can provide data on how advertising spends contributes to the Nigerian GDP, this will be a good place to start in the development of the advertising industry.
Advertisers which are SMEs, local conglomerates, and multinational organizations, significantly contribute to Nigeria’s economy and deserve an enabling environment that allows them to operate without undue intimidation and unnecessary restrictions.
ARCON should prioritize creating an environment that fosters creativity and innovation, supported by education, technology, and fair regulations, rather than implementing regressive and unproductive systems. For example, the Advertising Standards Authority (ASA) in the United Kingdom is an independent regulator that promotes responsible advertising through collaboration with advertisers, agencies, and media owners. It provides clear guidance and resources to help businesses comply with advertising standards while ensuring that creativity and innovation can flourish. ARCON should consider adopting a similar approach to facilitate growth and development within Nigeria’s advertising industry.
To foster a thriving advertising ecosystem in Nigeria, ARCON should consider the following recommendations:
1. Consultation and collaboration
Engage in regular dialogue with stakeholders, including advertisers, agencies, online platforms, and consumer advocates, to ensure that regulatory measures are practical, effective, and considerate of industry dynamics. A collaborative approach to regulation, similar to ICAN’s multi-stakeholder model, can lead to better outcomes for all parties involved.
2. Transparency and accountability
ARCON should ensure that its decision-making process is transparent and based on evidence, with clear communication of regulatory changes and their rationale. This approach will help build trust between ARCON and the advertising industry while promoting a sense of shared responsibility for upholding advertising standards.
3. Flexibility and adaptability
Regulations should be responsive to the rapidly evolving advertising landscape, particularly in the digital space. ARCON should monitor global best practices and emerging trends to ensure that its guidelines remain relevant and supportive of innovation.
4. Education and capacity building
ARCON should provide resources and training programs to help advertisers, agencies, and other stakeholders understand and comply with advertising regulations. By helping industry players develop the necessary skills and knowledge, ARCON can promote a culture of responsible advertising and self-regulation.
5. Streamlined approval processes
To avoid bureaucratic bottlenecks and support the timely release of advertising content, ARCON should implement efficient and user-friendly approval processes for advertising material. This could include online submission systems, clear turnaround times, and dedicated support for small businesses and content creators.
6. Encourage diversity and inclusivity
ARCON should revise its regulations to allow for the use of both local and international models in advertisements, promoting diversity and inclusivity. This approach will not only improve Nigeria’s global image but also allow advertisers to resonate with a broader range of audiences, supporting their businesses’ growth and competitiveness.
7. Balancing regulation and freedom of contract
While it is essential to ensure fairness, equity, and order in the advertising industry, ARCON should respect the constitutional freedom of legal business entities to enter into contractual agreements. Regulators can provide guidelines and best practices for commercial considerations, but they should not interfere with the negotiation process or impose arbitrary restrictions.
8. Foster self-regulation
ARCON should promote a culture of self-regulation within the advertising industry by encouraging the development of voluntary codes of conduct and industry-led initiatives. This approach can complement formal regulation and empower industry players to take responsibility for upholding advertising standards and protecting consumers’ interests.
9. Benchmarking and international cooperation
ARCON should actively participate in international forums and collaborate with other advertising regulators to learn from best practices and ensure that Nigeria’s regulatory framework aligns with global standards. This engagement will help ARCON to stay abreast of emerging trends and challenges in the advertising industry and inform its regulatory approach.
10. Measuring impact and effectiveness
Finally, ARCON should regularly assess the impact and effectiveness of its regulations, seeking feedback from stakeholders and adjusting its approach as needed. This ongoing evaluation process will help ensure that regulatory measures remain fit for purpose, fostering a dynamic and responsive advertising industry in Nigeria.
By implementing these recommendations, ARCON can create a balanced regulatory environment that promotes responsible advertising while respecting the needs of businesses and other stakeholders. This approach will help to cultivate a thriving advertising ecosystem in Nigeria, driving innovation, economic growth, and job creation, and fostering a diverse and inclusive creative industry that reflects the country’s rich cultural heritage and its commitment to the common good.
Written by Abdullahi Suleiman, Abuja
Leave a Reply