• Saturday, July 13, 2024
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BusinessDay

Poor regulation, enforcement undermine businesses

Oxford professor says elite consensus, others key to Nigeria’s development

One of the key functions of government is the regulation of practices in all sectors of the economy. This is to ensure that organisations operate within set standards and laws for the benefit of the society.

Chaos and disorder in the race for profit and survival are inevitable in any competitive environment without necessary regulation. Regulation therefore promotes fair deal and it is requisite to the good functioning of societies and economies, globally.

While operators, especially in Nigeria, appreciate the importance of regulation, some of them in various sectors have largely kicked against the style and method that regulations and enforcements are being implemented or carried out.

In some instances, outright quest for revenue, sleaze and corruption have underlined and defined regulation rather than government agencies ensuring that directives and spelt-out rules are maintained and infractions punished.

This pervasive exercise of regulating principally for revenue, both official and unofficial, is common among road traffic agencies and some other government bodies. Often times, the traffic officers, without prior warning by placing road signs, wait to apprehend an unfamiliar offender, only to turn around to demand for ‘settlement’ or issue bill for payment into state government purse.

Media reports allege that some regulating agencies have been turned into revenue machines in some states. While this is an aberration, this mandate, of course will alter regulators’ sense of applying the rules which is injurious to individuals, organisations and the society.

Ordinarily, penalty or pardon which is a norm for non-compliance to regulation should be exercised after notices and cautions have been proven to be given or displayed prominently for practitioners to see or read. But some regulators and their law enforcers, like traffic officers, have deliberately capitalised on hidden rules to dissolutely reap and rip off Nigerians to their chagrin.

Nigeria’s Out-of-Home industry, which employs over 4,000 Nigerians and contributes significantly to the country’s GDP, is also a victim of disjointed and jumbled regulation capable of relegating or dipping the age-old industry.

In May this year, marketing communication industry frowned at some of the regulatory activities of Lagos State Signage and Advertisement Agency (LASAA) and Kaduna State government. The industry complained of LASAA’s arbitrary fixing of fees payable on billboard platforms as well as the Agency’s insistence on payment of advert fees on vacant billboards.

The marketing industry under the aegis of Heads of Sectoral Groups (HASG) also accused LASAA of continued granting of individuals that are not registered practitioners to own billboards and operate in Lagos State contrary to the Advertising Practitioners Council of Nigeria (APCON) guidelines.

HASG also alleged that LASAA plans to concession seven of the major roads in the state to bidders, and the successful ones to own and operate franchises on such roads for a period of 10 years. To HASG, this planned concession amounts to favouring some practitioners which is not fair and just in competition.

It described it as a grave danger and monopoly. “If allowed, the backlash would include the loss of businesses and the means of livelihood of many out-of-home- practitioners.” It should be noted that one of the guarantees of regulation is level playing field.

On Kaduna, the body accused the state of giving its members 7 days within which to remove their structures from certain areas of the city. Kaduna’s reason, the body alleged, was that the affected areas are be populated by LED (electronic billboards).

“We have since found out that the whole essence is to allow some favoured business owners, close to the corridors of power in Kaduna State to install their LED platforms in those areas, and have the monopoly of practicing there. This is another form of franchising, and HASG frowns at it”. If this is true, it is also unfair in a competitive market.

In some states, Out-of-Home industry is seen as a big revenue source. This perception has pushed for certain needless regulations to squeeze funds from the operators instead of regulating to grow and promote the industry. This is telling heavily on the industry, as stated by the operators.

Outdoor Advertising Agencies of Nigeria (OAAN), the umbrella body of practitioners in the industry, recently expressed confusion and misunderstanding on signage agencies’ regulatory pattern.

“Some of the signage agencies do not really know what they are regulating. Is it the structure, the advert on the structure or both” that they are regulating? the association asked.

Further concerned, the association’s President, Emmanuel Ajufo, speaking recently at the OAAN 37th annual meeting in Lagos said “if, for instance, signage agencies are concerned with the structure, as we believe they should be, then why do they charge per face of a billboard?

“If on the other hand, they are charging for the advertising on the board, where then is the justice in charging when the board is vacant? Ajufo said most of the debts levelled against OAAN members by signage agencies are from charges on vacant sites.

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Manner of enforcement of regulation in certain instances in various sectors is also a concern and worrisome. There are reported cases of critical patients and pregnant women being arrested by traffic officers.

For outdoor, “We feel that enforcement should not be used to cause more problems for a company than it already has. It is always better that the company concerned should be asked to switch off or blank his/her billboard as this will prevent wanton destruction when officers of a signage agencies embark on the enforcement exercise themselves”, OAAN said.

For 16 years, signage agencies have become central in regulating outdoor business following the creation of LASAA in 2006 which some other states have copied the model.

“The implication of this is that control and regulation of outdoor advertising in States have, at least for the present, been effectively removed from Local Government Councils and vested in state agencies in these states,” said a lawyer, CIC Chikwendu at the OAAN meeting.

Presently, “It appears that the outdoor advertising agency is the most exposed of all advertising agencies to external control and regulation by the Federal, State and Local Government agencies”, the lawyer believed.

While organisations such as OAAN support government on earning income from out-of-home operations and other services, the OAAN specifically pleaded that government should not see its industry as major source of IGR after oil. “We believe that signage agencies should rather focus their minds on how to ensure sustainable growth of outdoor industry”

Regulation all over the world has socio-economic benefits which include evasion of monopolies, safe environments, protection of the poor, and growth of industry.

But when regulation and enforcement are poorly handled, it can cause harm than good, hinder industry growth and stifle job creation and innovation. It is therefore important that every regulator and their enforcers should wear human face, be friendly, and re-assess their functions, perhaps in collaboration with operators for suitable regulation for operators and society good.