Olusegun Adeniyi
Following my recent column, ‘Creating a Ganu-Si Economy’, which dwelt on how most government agencies serve as impediments to entrepreneurship, some supporters of the Advertising Regulatory Commission of Nigeria (ARCON) have written several articles in ‘response’. Although none has been sent to me, perhaps because ARCON is relying on third parties, I read them. And they all miss the point. By arguing that my friend who owns a restaurant attracted the hefty fine of N1 milion on two occasions because she circumvented the law that required payment of N15,000 fee and submission of the ‘promo’ for ARCON vetting, they make their case even worse.
In the ‘2024 Budget of Professional Bodies/Councils of Agencies Removed from the FGN Funding’, released by the Budget Office of the Federation, ARCON is number one on the list. While it projected a gross revenue of N1,096,166,050, the agency proposed a total expenditure of N3,716,582,290. With that humongous deficit of N2,620,416,240 between revenue and expenditure, one can only sympathise with ARCON for its increasing desperation. The agency has the second highest expenditure and the highest deficit of the 26 professional bodies on the list. While other professional bodies generate their revenues mainly through membership dues and align expenditure with their revenues, ARCON has had to resort to levying a tax, which it calls vetting fees, on whatever it defines as advertisement or exposure on any platform, including on the social media pages of individuals and small businesses, just to rake in money.
The fact that each message/post deemed as an advert by ARCON will attract a vetting fee says it all: this is more about revenue than about vetting. It is equally insightful that the punishment for not submitting even social media posts for clearance is 50 times the vetting fee. Equally interesting is that ARCON can threaten to arraign ‘defaulters’ before its own tribunal, which can impose fines and even jail terms. ARCON and its defenders are clearly not perturbed by the implication of such threats and taxes for big and small businesses operating in our tough environment.
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, summed up my position last Thursday at the inaugural Economic Roundtable/2025 macroeconomic outlook event of rating firm Agusto & Co., held in Lagos. For the benefit of ARCON and its defenders, here is what Oyedele said: “Nigeria’s tax system is unconducive for growth. We are trying to grow, but we’re struggling, and the tax system is holding us down. It has plenty of taxes and taxing agencies everywhere you turn. It doesn’t matter whether you’re small or big, whether you are formal or informal; we tax anything and everything that moves. If it keeps moving, we tax it even again. We tax it even more. We’re speaking to small business owners, and one woman said something to me that I will not forget. She said that it feels like the Nigerian system and the government are feasting on businesses. And I challenge anyone who wants to do a social experiment. Just do a banner; anything that comes to mind will be tailoring. Just write it and place it by the road. Find a plastic chair, sit back about two meters away, and watch what will happen within two days. I promise you, at least five agencies will show up, from business premises to advert levy to permit. You have not even found one customer. One of my hopes and dreams for this country is that in my lifetime, you put up that banner and you receive calls from different government agencies, one asking you whether you know about credit facilities for your sector. ‘We have this capacity development for people doing your business. Would you be interested? Do you need any access to this and that?’ Let’s support ourselves to prosper…”
Those are not my words; they are the words of Oyedele who is one of the leading authorities on such matters today. And it could not have been an accident that he cited ‘advert levy’ as one of the examples of the ways government agencies make life difficult for owners of small businesses in Nigeria.
To demonstrate that ARCON has mutated into a revenue-generating agency, below are the vetting rates advertised by the agency effective 1 January 2024. It was segmented into seven categories. Under ‘Career Matters’, Exam Registration Fee will attract N10,000; Examination Late Registration Fee, N20,000; Examination Subject Fee, N15,000; Exemption Fee, N15,000; EMR, N350,000; EMR (Non-Nigerian), N1,000,000; Accreditation Fee (Higher Institution), N1,000,000. For ‘Annual Practice Fee’, Associate Member will pay, N20,000; Full Member, N30,000; Fellowship Member, N50,000 and Membership Certificate Re-Issuance, N50,000. For ‘Corporate License’, Application will attract N100,000; Fee for three years, N450,000; Consultancy, N225,000; Inspection Fee (Lagos), N200,000; Accelerated Inspection Fee (Lagos), N300,000; Inspection Fee (Outside Lagos), N300,000; Accelerated Inspection Fee (Outside Lagos), N500,000; Corporate License Re-Issuance, N100,000.
But it is clear that ARCON targets businesses to fund the bulk of its hefty budget, since advertising professionals are not that many and since it secured legislative backing to vet and tax anything featured anywhere that it describes as advertisement. For ‘Advertisement Vetting (Traditional Media)’, Regular—Brands, Political, Cause, Ideation will attract payment of N35,000. Meanwhile for Accelerated, 4 Hours, N600,000; 8 hours, N400,000 and 16 hours, N250,000. For ‘Advertisement Vetting (Online Platform)’, Regular—Brands, Political, Cause, Ideation goes for N20,000 while for Accelerated, 4 hours attracts N250,000, 8 hours, N150,000 and 16 hours, N100,000. For the ‘Vetting (SME Category)’, Regular (Brands, Political, Cause, Ideation) goes for N20,000; 8 Working Hours, N150,000; and 16 Working Hours Acceleration, N100,000. Membership of NASME certification by SMEDAN is also required. For ‘Special Category’, the rate is N1,000,000 each for Lottery, Lotto, Game; Betting, Gambling, Wager and Promotion, Raffles, Draws, with the last two subject to a 16 hours vetting window. Meanwhile, Variation (Foreign Talent) will attract N2,500,000 while Variation (Foreign Production) goes for N3,000,000.
With these steep rates, which are per advert, it is very clear that revenue generation has now become the main objective of ARCON. Regulation is just a convenient cover. By the way, I have no problem with the need for regulation in certain critical and sensitive areas of national life. But I have problems with the sweeping powers granted to an organisation like ARCON, and the danger their operations pose to entrepreneurship, economic growth and even constitutionally-guaranteed free speech in Nigeria.
QUOTES
“In the ‘2024 Budget of Professional Bodies/Councils of Agencies Removed from the FGN Funding’, released by the Budget Office of the Federation, ARCON is number one on the list. While it projected a gross revenue of N1,096,166,050, the agency proposed a total expenditure of N3,716,582,290. With that humongous deficit of N2, 620, 416, 240 between revenue and expenditure, one can only sympathise with ARCON for its increasing desperation. ARCON has the second highest expenditure and the highest deficit of the 26 professional bodies on the list. While other professional bodies generate their revenues mainly through membership dues and align their expenditure with their revenues, ARCON has had to resort to levying a tax, which it calls vetting fees, on whatever it defines as advertisment or exposure on any platform, including on the social media pages of individuals and small businesses, just to rake in money.”
“To demonstrate that ARCON has mutated into a revenue-generating agency, below are the vetting rates advertised by the agency effective 1 January 2024. It was segmented into seven categories. Under ‘Career Matters’, Exam Registration Fee will attract N10,000; Examination Late Registration Fee, N20,000; Examination Subject Fee, N15,000; Exemption Fee, N15,000; EMR, N350,000; EMR (Non-Nigerian), N1,000,000; Accreditation Fee (Higher Institution), N1,000,000. For ‘Annual Practice Fee’, Associate Member will pay, N20,000; Full Member, N30,000; Fellowship Member, N50,000 and Membership Certificate Re-Issuance, N50,000. For ‘Corporate License’, Application will attract N100,000; Fee for three years, N450,000; Consultancy, N225,000; Inspection Fee (Lagos), N200,000; Accelerated Inspection Fee (Lagos), N300,000; Inspection Fee (Outside Lagos), N300,000; Accelerated Inspection Fee (Outside Lagos), N500,000; Corporate License Re-Issuance, N100,000.”
