FG moves to enforce zero tolerance on advertising debt

The Federal Government has taken a decisive step to tackle the long-standing issue of debt within the advertising and media industry, with the Minister of Information and National Orientation, Mohammed Idris, directing regulators to enforce strict compliance with payment standards across the sector. The directive mandates the Advertising Regulatory Council of Nigeria to work in […]

The Federal Government has taken a decisive step to tackle the long-standing issue of debt within the advertising and media industry, with the Minister of Information and National Orientation, Mohammed Idris, directing regulators to enforce strict compliance with payment standards across the sector.

The directive mandates the Advertising Regulatory Council of Nigeria to work in collaboration with the National Broadcasting Commission (NBC) and heads of sectoral groups to resolve outstanding debts and ensure discipline in financial transactions within the industry.

According to a statement signed by ARCON’s Director-General, Olalekan Fadolapo, the move signals a firm policy stance by the Federal Government to restore financial stability and credibility in the advertising ecosystem.

 

Daily Trust reports that the long-standing issue of advertising debt running into tens of billions has virtually crippled some media establishments.

 

A recent report titled, “Advertising Debt: Why ARCON’s payment rule matters for media survival” written by Bayo Ajetumobi said, “For years, agencies have been caught in a structural squeeze. Advertisers commission campaigns. Agencies execute them and place media bookings. Media houses publish or broadcast. But payment almost always never flows as scheduled. In many cases, agencies wait 90 to 120 days. In others, they wait longer. Some invoices are disputed after submission.”

 

 

 

In a bid to reduce the debt, the Minister in his directive reiterated that the zero-tolerance stance is not just an industry-specific reform but part of a broader economic strategy aligned with the Renewed Hope Agenda of Bola Ahmed Tinubu.

 

“This is not merely a regulatory preference; it is a national economic imperative,” the statement noted, stressing that prompt payment for advertising services is critical to protecting media businesses, encouraging investment, and safeguarding jobs.

 

To operationalise the directive, ARCON outlined three key pillars aimed at addressing the root causes of advertising debt and preventing future occurrences.

 

Central to the reform is the enforcement of a 45-day payment window for all advertising services, in line with global best practices and the Advertising Industry Standards of Practice (AISOP).

 

Under this policy, all Media Purchase Orders (MPOs) and Local Purchase Orders (LPOs) must be settled within the stipulated period. Any delay beyond 45 days will attract interest at prevailing market rates.

 

The Minister emphasised that compliance is mandatory for advertisers, agencies, and media houses alike.

 

“This provision is not optional. It is designed to protect media organisations, ensure steady revenue flow, and stabilise the industry,” the statement said.

 

To curb the accumulation of unresolved debts during agency transitions, ARCON reaffirmed its directive on disengagement procedures.

 

Advertisers are required to fully settle all outstanding obligations with an outgoing agency before appointing a new one. Both the outgoing and incoming agencies must also conduct due diligence, including financial and ethical checks, before onboarding new accounts.

 

The statement described this engagement as “not only important, but also statutory,” underscoring its legal backing.

 

Recognising that not all disputes arise from bad faith, ARCON has strengthened its Alternative Dispute Resolution (ADR) framework.

 

The ADR desk will provide a neutral platform for mediation, conciliation, and arbitration, enabling faster and less adversarial resolution of disputes. This approach is expected to prevent disagreements from escalating into prolonged debt crises that have historically plagued the sector.