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Analysis: Outdoor Businesses Under threat as Lagos Agency, FG Create More Bottlenecks

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Businesses of scores of Nigerian outdoor advertising practitioners may go under if the Federal Ministry of Works and the Lagos State Signage and Advertisement Agency fail to provide a level-playing field for practitioners in route and site allocations. Ijeoma Abaja reports…

Stakeholders in the marketing communications industry are back to the drawing board to safe the multibillion naira businesses in the outdoor sub-sector of the industry. While the operators are still struggling with issues related to multiple taxation and high-handedness, fresh findings have revealed that LOATSAD Promomedia Ltd, with the support of Lagos State Signage and Advertisement Agency (LASAA), has gotten exclusive right to operate on some major routes in Lagos State.

MD, LASAA, Damola Docemo
MD, LASAA, Damola Docemo

Another issue that may soon create problem for the practitioners nationwide is the plan by the federal government to concession twelve major roads in the country. The Federal Ministry of Works and Housing (FMW&H) has announced last month that it would concession twelve major roads in the country, under the Highway Development and Management Initiative (HDMI).

Considering what happened when such step was taken few years ago in the concession arrangement between federal government and Bi-Courtney Limited on Lagos-Ibadan expressed road and how the firm personalized the outdoor sites on the road, the February 2021 announcement sent cold shivers down the spines of critical stakeholders in the nation’s outdoor advertising space. Aside the fact that it would wreck some businesses, stakeholders also fear that over 150,000 jobs may be lost to the concession.

In the Lagos brewing crisis, findings from advertising industry have revealed that LOATSAD, established few years ago by Mr. Seyi Tinubu, son of former Governor Bola Tinubu, with the support of LASAA has been given a kind of monopolistic right over major highways in the commercial city Lagos. According to a source within state regulatory body, the routes include; Lekki –Epe Road, the newly-built Murtala Muhammed Airport Road, the Badagry Road and others. The sites on these roads were said to have been allocated to the new agency with little or no recourse to other operators to participate in the bidding process.

Though some highways were said to have been allocated based on concession, the concern in the industry is that there seems to be no criteria, employed by the state’s outdoor regulatory agency, at arriving at the choice of LOASTSAD.
Meanwhile, on the steps being taken on the 12 federal roads, the office of the Minister of Works has assured journalists that the federal government is optimistic that the concessioning such roads would ‘deliver a safer and enjoyable travel experience for travellers’ outdoor advertising practitioners don’t seem to share in such optimism. As far as they are concerned, such plans would further threaten the existence of an already endangered sector.

Perhaps the practitioners have reasons to develop such goose pimples towards the policy. Such concessioning, in the past, had always left practitioners worse than it met them.

For instance, some of these practitioners, who spoke with Brands & Marketing, under anonymity, would readily attribute the slide in the fortunes of outdoor ad businesses in Nigeria to what they prefer to describe as ‘unfair regulation and lopsided concessioning of some choice roads’, especially in Lagos.

One of the instances cited remains that of Loatsad, a relatively young, Lagos-based outdoor advertising firm, but with a very strong connection with those in the state’s corridors of power.

The company, they say, holds the four aces, as far as outdoor practice is concerned in the state.

“It has simply taken over the entire outdoor ad space, in Lagos, with the full support of the state, through its outdoor regulatory agency, the Lagos State Signage and Advertisement Agency (LASAA),” a practitioner, alleged.

 

“Not that we are against concessioning, but we believe it should not be done at the expense of standards. We believe all the cards must be put on the table. There should be a level-playing field. We should not just wake up and realize that a part of the metropolis has been concessioned, without any call for bidding.

“For instance, nobody knows the criteria being used to arrive at the choice of Loatsad as beneficiary of such concession, and many others,” stated a practitioner, who would not want his name for fear of being ‘persecuted’.

The practitioner also alleged that LASAA had not been giving practitioners a level-playing field to operate. According to him, many choice areas, in the state, such as Lekki Toll Gate, Murtala Muhammed Airport and Badagry Road, had been allocated to Loatsad, with other operators not given the opportunity to even participate, at the bidding process.

“You will agree with me that when you give such juicy parts of the state to just one firm, and others, are left to struggle with the ‘bones’, I think there is an issue,” he added.

Besides, he believes the present working conditions, in the state, do not seem to favour those that respect constituted authorities.

According to him, despite the fact that Loatsad is owing the state’s regulatory agency humongous amount of money, the outdoor firm is usually exempted when enforcements are being done.

“They are usually exempted when enforcements are being carried out, just because of their strong connections to those in the corridors of power. Unfortunately, when you give such indulgence, and pursue those with milder debts with a sledge hammer, I think there is a problem here,” he added.

Another practitioner, expressed his concerns that the recent announcement by the Federal Ministry of Works and Housing, concerning the concessioning of 12 major roads across the country, argued that many practitioners might again be at the receiving end.

“If you remember when Lagos – Ibadan Expressway was concessioned to Bi-Courtney, years ago, the first step the company took was to remove all the billboards on that corridor, and begin to erect theirs. Instead of facing road construction, outdoor ad practice was the first thing the company delved into, immediately it got there. A lot of practitioners, on that corridor, lost huge amount of money. So how are we sure the new arrangement, by FMWH would be different?” he asked.

A stakeholder, Fadare Adekanmi, believes indiscriminate concessioning and unfair regulations might further sink the fortunes of this gravely-troubled multi-billion naira sector.

“Not that concessioning is out of place,but you have to take into consideration our peculiar situation. The country is going through a lot, and no industry is immune. And when you concession a huge stretch of land to just one outdoor firm, not because it is better than the others, but just because of its strong connection, you are gradually killing the practice.

“For instance, we have over 150 outdoor ad firms in the country, and each of these firms employs at least ten people directly. And as a government, if you really want the economy to grow, your concerns should be how to ensure about 150,000 workers directly engaged by these firms don’t lose their jobs. And the only way you can do that is to ensure make such ‘commonwealth’ go round, and not just monopolized in the name of concessioning,” Adekanmi stated.

But LASAA and the FMW&H believe these fears are unfounded. Speaking with Journalists, the Head of Corporate Affairs at LASAA, Mr. Temitope Akande dismissed the claims that the agency had concessioned more roads to Loatsad.

“That can’t be true. We haven’t concessioned any other roads to the firm, apart from the previous arrangements, and any one with contrary evidence can come up with that,” he stated.

Akande also described as untrue, allegations that outdoor firm was always shielded by the agency, anytime it went out for enforcement, despite its humongous debt with the outdoor regulatory agency.

According to him, almost all the outdoor ad agencies are presently indebted to the agency.

“But what we’ve done is to allow them to have a payment plan. So every one of them has a payment plan, that is how it intends to pay its debt. We only go after those that failed to honour such plans. So if the agency is not going after Loatsad, what it simply means is that the firm is keeping to its payment plans,” he added.

While reacting to the issue of concession by the FMW&H, a source at the ministry described the fears of outdoor ad practitioners as unfounded.

According to him, rather than exterminate small businesses, the intention of the planned concession is to protect young businesses, and give them a lifeline.

“I think these fears are coming from the way the media reported the issue. For instance, we’ve not concessioned any of the roads, we are just starting the process. Besides, the HDMI is meant to help small businesses to grow. In every consortioum, you have the lead, and other members of that consortium, but what we are encouraging is that other small businesses, even down to the catering services, advertising, remain with the small businesses, within this consortium.

“We are also going to launch what we call a vendor market place where small businesses are able to come in, show their competence, because a lot of concessionaires are also having the challenge of knowing which one of these small businesses are genuine, or doing what they claim they do. So we are hopeful that that vendor marketplace will be able to connect big concessionaires to small businesses. You know creating jobs is the motto of the government, so there is no way it would embark on act that would threaten jobs,” he stated.

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