There is a growing controversy over the recent advertising industry reform by the Advertising Practitioners Council of Nigeria (APCON). Stakeholders are particularly concerned about a component of the reform that touched on the area of entry of foreign agencies into the Nigerian marketing communications sector.
While the reform proponents expectedly argue that the reform will ensure the growth of Nigeria’s marketing communications industry, the critics point to sore areas like the participation of foreigners in the market, saying it breathes in air of protectionism.
For instance, Brendan Akinsanya, a marketing communication expert, in a publication, says the area that deals with entry of foreign agencies into Nigeria’s marketing industry is couched in bad faith. He says the new licensing regime as contained in the reform document will limit foreign stake in the advert firms in Nigeria, thus starving them of technical partners and closing the window of accessing modern and innovative trends in the industry
In registering agencies for operations in Nigeria, the reform states that “advertising organisations whose total equity participation by Nigerians is equal to or below 25.1 percent or aggregate foreign investment in equity is equal to or above 25.2 percent (up to 100%). Foreign agency shall practice advertising targeted at market outside the shores of Nigeria.”
According to Akinsanya, this is an extreme proposal as it negates the Federal Government investment drive, where foreigners are allowed to own businesses 100 percent. NIPC, an agency of government’s law, allows 100 percent foreign ownership of firms outside the petroleum sector, where investment is limited to existing joint ventures or new production-sharing agreements.
Akinsanya further argues that “various professional, intellectual and academic studies have demonstrated eloquently that the substantial presence of foreign firms in an emerging economy helps the local economy in terms of not just employment or technology transfer or creation of goods and services, but also in terms of lifting standards. Multinationals compel local firms to raise their standards by engendering competition.”
Akinsanya belief is that if Nigeria had operated with closed doors in telecoms, manufacturing and petroleum sectors, the economy would have suffered, but what Nigeria did was to open doors to foreign firms in those sectors but subjected them to local content usage.
Also assessing the reform, another analyst who prefers anonymity, while welcoming the inclusion of local content in the reform, believes that the restriction of foreign entries into the Nigerian advertising industry will not engender the necessary competition required to develop the industry, noting “competition improves standards, but where Nigeria’s advertising authority does not want competition, it is unfortunate.”
He agrees that it is proper to appropriately register foreign agencies the same way Nigerians agencies are registered and subject them to local content, as this would present a level playing field that will ensure that the country is not turned into a dumping ground for unqualified practitioners.
But in his defence to the reform and in reaction to Akinsanya’s argument, Olawale Tanimowo, a marketing communications executive based in Lagos, says for years, the Nigerian businessman has been at the mercy of the so-called global companies who have made it their business to import all manner of services, including those that can be better done in-country.
“In discussing foreign direct investment of any form, government normally takes care to emphasise on areas where its people do not have the competence and production capabilities. It stands to reason since it would indeed be a curious policy to import or outsource what one has capability to produce,” Tanimowo says.
In his publication, Tanimowo argues that the story is not too different in advertising. The Nigerian advertising industry is one of the most creative in Africa. Nigerians are otherwise very expressive people and so are naturally given to writing good copy. Why should a country that has a good number of creative minds open the doors for all manner of “imported” agencies to play in its environment?
He says “opening the flanks of Nigeria for all manner of foreign agencies to play in is the same as our government opening the borders of the country for ‘garri’ or even ‘amala’ to be imported from Cameroon and Benin Republic in the name of globalisation. We have these products. We have the capability to keep producing them. What sense does it make to have them imported?”
He says the Nigerian government must stand behind APCON in its current drive, especially in stopping the importation of resources, the calibre of which we have in the country.
Assessing the reform recently, Israel Jaiye Opayemi, chief strategist, Chain Reactions Nigeria, a PR firm, says APCON has shown the way and has displayed exemplary courage in the battle to sanitise advertising practice in Nigeria. “It is exemplary courage because it is something those of us in the leadership of PRCAN are watching closely and we are drawing inspiration from in our preparatory steps to cleaning up the PR practice in Nigeria,” he says.