Within 18 months, two PR agencies have resigned from a media account of an FMCG company over prolonged payment of over six months for jobs executed.
Another top PR agency based in Lagos had also left the services of another multinational company recently over the same challenge. These are some of known cases.
Simply put, the protracted and mode of payment by some companies for reputation and brand management services is frustrating media agencies who borrow money at high interest rate to execute the jobs.
“Owing agencies for up 120 days to six months is immoral, unjustifiable and unacceptable”, a PR practitioner told BusinessDay. He said this is more so when the fund for the job was borrowed.
“We are literally funding clients’ businesses with the cost on us. When the clients finally pay for the contract job, it goes in bank interest charges”.
A source close to multinational companies said some of them have a rule of 120 days of payment period after the invoice had been submitted.
The frustration by agencies over payment mode by clients is heightened at a period when Covid-19 pandemic has laid prostrate a number of businesses. While some sectors and institutions got palliatives in the form of debt forgiveness or tax reliefs to cushion the effect, the PR industry is yet to be considered for any palliative.
However, the industry is asking for business patronage by federal and state governments in place of palliatives.
Speaking to BusinessDay, Chairman of Lagos State chapter of Nigerian Institute of Public Relations, Segun McMedal therefore appealed to the Federal and state governments to support the local public relations industry which is equally affected by the pandemic with businesses to cushion the Covid-19 effects.
“Now that the world is smarting from the impact of the COVID-19 pandemic, this is one of the best times to drum support for local content to grow the economy”, he said.
