The latest chapter of the long-running dispute in the Nigerian advertising industry was written during the week. It saw the Advertising Regulatory Council of Nigeria (ARCON) responding in justifiably muscular fashion to the Advertisers Association of Nigeria (ADVAN) over the latter’s call on President Bola Tinubu to halt the ongoing reforms in the advertising industry. Thus, what started as a policy disagreement has made it to the table of the President.

At the centre of the dispute is not simply regulatory philosophy, but money. More specifically, it is the long-standing problem of advertising debt and the crippling effect of delayed payments on Nigeria’s media establishments. 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 flow as scheduled. In many cases, agencies wait 90 to 120 days. In others, they wait longer. Some invoices are disputed after submission. Others are quietly deferred. In the worst cases (these are many), they are never fully settled.

The consequence is predictable. Agencies, already obligated to media organisations and production vendors, carry the financial exposure. Media houses, particularly local print, radio and independent television stations, whose operations are already operating on tight margins, experience cash flow strain that leaves many in ICU-worthy state of health. Salaries are delayed. Capital investment stalls. Newsrooms shrink.

Debt accumulates across the value chain. The debt problem is not anecdotal. Industry executives privately acknowledge that outstanding advertising receivables run into tens of billions of naira at any given time. A senior media executive in Lagos described the situation bluntly: “When advertisers delay, agencies delay. When agencies delay, we bleed.”

The impact is not theoretical. It directly affects newsroom operations, newsprint purchase in case of newspapers, equipment upgrades and the capacity to produce content at scale. Globally, payment discipline in advertising is treated as a structural necessity.

In the United Kingdom, industry bodies such as the Institute of Practitioners in Advertising have long advocated defined payment cycles to protect agencies and media partners. In the United States, standard contract frameworks promoted by the American Association of Advertising Agencies encourage structured billing timelines and clearer allocation of financial risk. The logic is simple. Media cannot function as involuntary lenders to large corporations.

In Nigeria, however, delayed settlement became normalized. The imbalance was baked into the power asymmetry. Advertisers control the accounts. Agencies depend on account retention. Media houses depend on agency flows. That structure leaves agencies castrated. The know that they risk losing business if they push for payment too aggressively. So, they are forced to accept protracted delays and absorb financing costs. It is a system that functioned for those with leverage and emasculates those without it.

ARCON’s introduction of a mandatory 45-day payment cycle is, therefore, a main ingredient of the ongoing advertising industry civil war. The directive requires advertisers to settle agency invoices within 45 days and prescribes penalties where delays occur.

The objective is straightforward: restore liquidity to the ecosystem and prevent debt from cascading downward. ADVAN has framed the directive as regulatory overreach. In its letter to the President, it warned of a hostile business environment, declining media spend and excessive compliance burdens.

It argued that the 45-day threshold interferes with private contracting freedom and imposes financial rigidity in a difficult macroeconomic climate. But the argument must be examined against the backdrop of media sustainability. Nigeria’s media sector already operates under significant economic pressure. Rising production costs, currency volatility and shrinking advertising margins have combined to weaken balance sheets.

The Reuters Institute Digital News Report consistently highlights the financial vulnerability of media markets in developing economies, noting that advertising volatility directly undermines newsroom stability. When advertising debts are extended or defaulted, media establishments effectively finance corporate marketing. That inversion of financial responsibility is unsustainable. ARCON’s position, which I am in full agreement with, is that payment discipline is not a punitive instrument but a stabilising mechanism.

The regulator’s statutory authority derives from the ARCON Act No. 23 of 2022, which establishes it as the sector’s enforcement body. It is not a trade association. Its mandate is to impose standards where market behaviour distorts the ecosystem. ADVAN, by contrast, exists to defend the commercial interests of advertisers. Tension between regulator and industry lobby is, therefore, structural, not surprising.

Beyond payment timelines, the reforms include formalised disengagement procedures. Historically, some advertisers switched agencies without ensuring that outstanding media obligations were cleared. Agencies were left exposed to media debt even after losing the account. Media houses, in turn, pursued agencies rather than advertisers, creating a chain of unresolved liabilities. ARCON’s directive requires all financial obligations to be settled before account migration. The principle is basic financial hygiene.

Close liabilities before opening new engagements. For media operators burdened by legacy debt, this provision is particularly significant.

The dispute also touches on the Advertising Offences Tribunal, established under the ARCON Act to enforce compliance. ADVAN has questioned its constitutionality. However, recent Federal High Court rulings have affirmed its statutory foundation. Sector-specific tribunals are not unusual in Nigeria. The Tax Appeal Tribunal and the Competition and Consumer Protection Tribunal perform similar quasi-judicial functions within their domains.

For media establishments, enforcement capacity matters. A payment directive without consequences is advisory. Without enforcement, advertisers can revert to delay strategies. The tribunal provides a compliance pathway that did not previously exist. ADVAN has also cited a reported three percent performance score attributed to ARCON by the Presidential Enabling Business Environment Council (PEBEC), presenting it as evidence of regulatory failure. ARCON disputes the interpretation and argues that performance metrics depend on narrow evaluation parameters. (Guardian)