Outdoor Business Now An Endangered Specie – Ajufo | Independent Newspapers Limited
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Outdoor Business Now An Endangered Specie – Ajufo

Posted: Apr 6, 2016 at 2:53 am   /   by   /   comments (0)

Outdoor operators appear to be facing difficult challenges particularly from regulators, who they consider are hell bent on killing the business. In this encounter with Olamide Bakare, the Vice President of Outdoor Agencies association of Nigeria, OAAN, Emmanuel Ajufo, speaks on efforts being taken to resolve the issue and why growth and innovation may elude the industry if the situation remains.


We learnt there are subtle plan to bring a foreign agency to practice in Nigeria. Are you aware?

There is no smoke without fire. We need a partnership that will work. If my friend has heard about it, it can only come through sources. If they are coming into Lagos, LASAA must be involved. It is difficult for us to sit back. What is happening is that the president was mild when he is talking about our suffering. I want to say that we are endangered species. We are endangered species because today clients are not doing business with us not because they are not also trying to sell their products but because our medium suddenly is not meeting up in terms of costs. What I mean by that is that we are transferring costs the regulators imposed on our business. So, if they chase us out of business, we may never come back because the clients would have also found new ways of selling. And by the time they try those new ways and found them to be cheaper, they won’t come back. Therefore, we are an endangered species.

And then on one hand they are now coming from the back to say a foreign company is coming and of course the way the dollars is now they will come very easily and what are they offering that we don’t have. So I think that since we are partners in this thing you hear anything you tell us by asking them and then if they say yes we should also have the courage to ask them what happen to players who also provide employment and pay taxes so that we bring it to public domain and let the public begin to question them about some of these policies because we have reached a situation where we must cry out. In crying out we are not saying that we are saints but we are saying that you people should assist us and I think we are endangered species.

What drive your rates? Is it a regulator’s charges or it is informed by demand?

Of course, there is a fixed cost that we must take in to account. All of us are old enough to know what was being charged in those days before the advent of LASAA. It was when LASAA came that the price went by over 1000%. I think the attitude of the regulators is focused to make money alone not minding what the owners of the business go through. But like we keep telling them using oil as case study, Nigeria have oil but don’t have anywhere to sell. If you have been following events, you would realize that revenue keep dropping every year. Take for example Lagos state government does not get what it used to get from the federal government. They share only to the extent of what FG received. So, we are telling them to allow us pay to the extent that we have also received but they remain adamant. I think they have not allowed good reason to prevail as far as some of these issues are concerned. It has come to a point in which they need to understand failure in which the business of outdoor would go under. If they can take what has been received then they should also allow us to pay what we have also received.

Does this apply to Lagos alone?

No, that is why we are not talking about Lagos alone. As we speak, we are having issues in Kaduna, Don’t forget it was the same person who did same in Abuja. The issue of rate has been on for a while. One thing I have noticed is that the government initially says they want to beautiful but ended up in rate increment. So, I think we need to come down to address the issue.


Let us talk about the issue of the debt and the payment on vacant hoardings; how far have you gone to resolve the issue?

We have been battling with LASAA on the issue of vacant billboards, As I said earlier, we are the endangered species. You must realize that whatever money we spend come from the advertisers. And so when the advertisers do not release this money or they cut their budget, we are mostly affected. But the regulators still insist that we must pay them the same amount of money that we pay when the billboard is occupied. Where do they expect us to get the money from? Majority of the debt we owe is actually from rates due for vacant billboards. It is not possible for us not to owe because we can’t walk into the bank and take a loan to pay for vacant billboards.

We believe as regulators you must understand the environments that you regulate, but unfortunately that is not the case. And they must also know that a percentage of what we give to them come from advertisers and that these organisations have the right to take their money to anywhere they want to take it to. We are here today talking about this rate being too high and we are asking them to bring it down. I don’t think it is fair to expect us to pay N3million when in actual fact what we get from client is a little above that. If you see what is going on across the states, you will notice that the Lagos model was copied. It all started from Lagos and anywhere you go now, all they tell you is how much are they paying in Lagos. Therefore, we can’t be blamed because that has been the major debt in this industry.

And coming to the steps being taken to resolve the issue in some of these states, we have tried to engage a number of them. Each time new people come on board, we try to engage them. We have succeeded in some; we did the same thing in Calabar. Recently, we had a stakeholders’ forum where we discuss the issue. At the end of the forum, we were able to reach a reasonable decision. Now, those people realised that that money cannot come the way it used to come, so they brought down their rates. We were even told that instead of paying for vacant billboards, we should pay a token rate. That is what we expect from every regulator to copy and not insisting that this is Lagos if you cannot pay, you quit. The rate that we pay in Lagos is 40% to 50% of our income.

 Are your members indebted to LASAA?

Yes, we owe LASAA and the debt is a result of charges on vacant billboards. We are saying to LASAA that we did a job and we had an agreement with previous administration in the agency that gave us the job but LASAA is saying that they do not know about that agreement. Because we believe that government is a continuum and very soon this present management of LASAA will be a thing of the past, we think it was absurd for the present administration to have taken such position. I do not know why people do not learn from the past. I don’t know why OAAN will enter into an agreement with somebody and then the current leadership will begin to say it doesn’t know anything about such agreement. We are still talking about this thing and we expect LASAA to set aside those debts until we resolve them. Our position is that we are claiming that money but he is saying that he doesn’t know about the money and was not dealing with us on the account of the money that we expect him to pay us. I rather would say that we have told them clearly that we should set it aside until we resolve this issue and all hands are on desk to resolve this issue.

As far as other debts are concerned, I am yet to know of a company that does not pay. So, what we are saying to them is that we are growing concern. They should know that we are into a long distance relationship and understand it to be a master servant relationship. If out-of-home operators go out of business, the agency will go out of business too. I expect LASAA to treat us like clients. That is, the way we massage our clients. That is the way he should be massaging us.

For good business to survive, it is all about credit. There is no country where business activities are carried out where no one owes. Business is usually run on credit. Except in Nigeria where you want to acquire a property, they will ask you to pay for everything at once. Things are not done that way. That is why people are stealing massively.

Most importantly, if you start charging for vacant site, i.e boards that do not carry any campaign, if you have 12 boards and have campaign on 6 and the other 6 are empty, you are going to pay the same amount of money. And if you do that next year you are out of business.

In this case what do you want me to do? Is it to pay LASAA and go under? Instead, I will continue to owe them.

What came out of the meeting with the minister and what were some of the demands from OAAN?

The information minister, like in a normal government setting, invited us for a meeting, asking us to support them by helping to do a lot of campaigns on the economy, security and change agenda. But we also siezed the opportunity to tell him our own problem. He asked us to write a formal letter, which we have done, and he said they will look into it with the governor of Lagos State and the national leader of their party. We are still expecting the feedback.

But one of your members said in Calabar that a rebate was given to attract operators. How true is it?

That is what I was saying that in Calabar, a stakeholder’s forum was held and an agreement was reached to bring down the rates to encourage us to come. As I speak, they are not charging for the vacant billboards but demanding that we pay a token to the state.

 Did you present any strategic model to governments on how this industry can contribute to development?

Well, as an association, we have tried to educate them about the business and how it runs. Unfortunately, some of them are being controlled by their finance ministries. They will tell their commissioners for finance that they have gone out there and counted the numbers of billboards. And by so doing, will be expecting N40billion this year. The man that is appointed as director general in a bid to save his job, just look as dumb when the commissioner is making such outrageous demands.

As soon as they come out of the meeting, they start chasing us for more money. Meanwhile, the DG already knows that it is not possible. In Lagos, we wanted to have a meeting like this but they are avoiding us. They already know what we want to ask for which I think is not out of place. Until we were pushed to write a petition to the House of Assembly, that was when they saw reason in allowing us to come and talk. These are kind of things you get when you work for the government. They believe they have the government backing.  All they are interested in is to bring money without looking at the morality, whether this money can come or not.

It is a question of education and listening but they don’t want to listen unless we force them either by going to court or by going to the House of Assemblies. It is like a conspiracy amongst government department, ministries and agencies and even arm of government. They see us as cash cow but they must understand that the business has changed drastically.

We are just lucky that Lagos State Assembly just called us. If it was other states, the governor would say go and get money from them. Unless very few governors who probably come in from the private sector would understand and say let’s form a committee. Majority of them are politicians and do not understand how businesses in the organised private sector work, so as to be able to see how these things are done.

In addition, what we are doing is to encourage government in each state of the federation to always ensure that anybody that will man their regulatory agency, signage in particular, must be a professional, especially someone who has the background in outdoor. Because we realise that one or two states that have such people, we have been able to get good rapport with them because they understand where we are coming from because they have been there before.

For example, in Oyo State, we have one such person there and we have good interaction. So far, he has been able to understand most of the things we say. For instance, the vacant boards that we talked about, Oyo state understands our plight because he is also a practitioner. When you don’t get revenue from somewhere, why should you be paying for such board? The only thing we pay in such state is ground rent.

For this house, if you are paying a ground rent to Lagos, I don’t think you will pay up to N50,000? But if you have unipole here, they will ask you to pay N3 to N4million even if it is empty. These are the issues. In Oyo state, they are saying pay a token as a ground rent so that something will come to government coffers in as much as your board is standing. If it is occupied, you can prorate and pay the balance. If it is 6 months or 3 months you pay whatever that is left.

I think Enugu is like that too. There is a professional there and we enjoy a good relationship because the people at the helms of affairs understand the ethic of the business. For example, in Lagos State, the MD of LASAA is a lawyer and a columnist, how will such a person understands what we are talking about? It would be pretty difficult. The government has given him a responsibility, go and get me N10billion from outdoor. He wants promotion and would want to get that money at all cost even at the detriment of the industry. So, those are the things we are facing and it is not as if we owe or intentionally want to owe, if at all we owe them.

With the current downturn in the state of the economy which I believe must have affected your business, do you think the second quarter could be better?

I believe that, with discipline coming from government down to local industry, probably things would start doing much better and we would require less foreign exchange. What that means is that local businesses would spring up and those businesses will begin to advertise. So, all these foreign drinks would soon disappear from the market because the fact is that government is not ready to fund such commodity. If government is serious about what it is saying, the local company will pick up. Of course, the market is here and we also have to be disciplined. For instance, if you want to import BMW in India, you have to pay tax of over 500per cent which is enough to discourage you and push you to patronise local car manufacturers. So, the money is circulating around there and I think this is what the government should do so as to help in generating employment in other industries such as PR, publishing, and journalism to make them flourish.