The former President of Association of Advertising Agencies of Nigeria (AAAN) Kelechi Nwosu has suggested possible solutions to the financial crisis rocking the outdoor industry in Nigeria.
Conveying this in a written letter to his successor who is the current President of AAAN, Kayode Oluwasona, Nwosu stated that it was high time the industry fashioned out an intervention package that would rescue it from heavy indebtedness hanging on its neck. While alluding to the fact that a workable solution be developed that guarantees a six-months freeze on payment of charges to Lagos State Signage and Advertisement Agency (LASAA), and a 30 to 50% slash on the fees to give the industry respite from its crushing indebtedness to the regulatory agency, Kelechi pleaded that the sector chooses the option of dialogue to find lasting solutions to its financial issues with the regulator
Kelechi said“I suggest we consider the following, starting with Lagos which probably accounts for 40 percent of the market: Agree with LASAA, a moratorium on payment of fees to LASAA for a period of six months. Consider a recession stimulus: One time (for one year) cut of the LASAA fees by 30- 50 percent depending on the size of the hoarding: i.e. the bigger the size, the larger the discount,”.
He went further to state that there was need for practitioners to properly engage with advertisers and the regulator as this would help in assuring the latter of the transparency involved in their businesses.
He said “Ask outdoor practitioners to reflect the payment moratorium of six months for clients (for existing boards); only posting costs to be billed to Clients. Also charge reduced percentage of prices (30-50 percent) for six months only after the moratorium.
“To balance it , LASAA and OOH practitioners will require clients to commit to an 18 month media order at the pre- agreed rates , i.e. the charge will be from the date after the payment moratorium period. This is where the stimulus makes sense and works for all parties”
“The above in my view can also be challenged and improved upon. The idea is to do something to get businesses going again in the OOH side,” the agency boss said.
While expressing optimism of a better industry provided the proposals were implemented, Kelechi pointed out such steps would lessen the debt burden which has belaboured the industry and undermined its growth.
Although the suggestions look good as it was capable of resolving the long standing issues creating a wedge between the prcatitioners and the regulator, it is not clear if LASSAA will be willing to accept all the offers and suggestions.
The agency has over time maintained a hardline stance to some of the complaints raised by members Outdoor Agencies Association of Nigeria (OAAN). Their call for a reduction in regulatory fees and a structured repayment of debt that allows for a truly flexible payment have not been met with positive response by LASAA.
However, in recent times there have been some compromises from LASAA with regards to offering flexible payment plan and reducing the charges but operators are still not pleased because the fees are still considered too high.