State Of The Economy: Expert Reveals Prospects, Challenges For IMC In 2023 At ARCON National Conference

Ahead of the 2023 general elections in Nigeria, advertising spend has been projected to hit an estimated $600 million. This figure indicates an 18% increase which is propelled by election campaigns among political gladiators vying for the buy-in of the electorates across various strata of government come 2023.   

This information was disclosed by an independent Consultant and Executive Vice President of the Metacura Development Initiative, Ademola Adigun, while he was addressing advertising stakeholders at the ongoing National Advertising Conference organized by the Advertising Regulatory Council of Nigeria, ARCON, in Abuja.

In his projections, Adigun further revealed that in 2023, TV and Out of Home advertising will still remain the dominant spending areas while internet advertisement continues to rise with a marginal rise of about 3% from 2021. He added that expenditures in the advertising market will contract in the second quarter of 2023 and rise by the third quarter.

He also noted that the contribution of Arts and Entertainment to GDP will be less than 2.5% while GDP growth is projected at about 3% and will be driven by Services estimated to rise to about 47%.

Speaking on the state of the economy, Adigun advised stakeholders in the industry to brace up for 2023 which will come with a lot of economic headwinds as indices show that the economy which is still largely mono-product based despite a rise in non-oil earnings, will continue to experience challenges. Among these indices, he mentioned debt servicing which he said is about 90% of earnings from all Sources, Nigeria’s FX crisis based on poor exchange rate policies, official inflation figures at about 22%: real inflation in some basket of goods at over 45%y, the fiscal deficit widened from 4% of GDP to approx. 6% of GDP, among others.

Further lending credence to his position, Adigun noted that economic diversification is harder with a higher cost of inputs as unemployment figures which is officially at about 33% but will continue to rise as multi-dimensional poverty which is about 64% across the country also increases.

He, therefore, projected that the Naira will depreciate by about 25% due to FX shortages with associated instability but should be stable by the third quarter if there is rate convergence, He added that there will be a removal of petrol subsidies that will increase inflation by about 40% in the second quarter and then diminish to about 15% by Q3.

In providing solutions to the challenges ahead, the independent consultant urged stakeholders to go outside the box in thinking up solutions. He further urged them to create new blue ocean opportunities, markets, and strategies. He stated further that regulation has a pivotal role to play in the survival of the industry, urging ARCON to play its role in ensuring that the industry is protected against the headwinds of the economy in 2023.