Nation Centre, the headquarters of Nation Media Group (NMG). PHOTO/FILE
By PATRICK MAYOYO
Nation Media Group has become the first media house in Kenya to reject government advertising made through its insert published in local newspapers called “My Gov” as part of its efforts to break away from the emerging global phenomenon called media capture.
According to NMG insiders, the company has written to the Government Advertising Agency (GAA) that publishes My Gov that is distributed across the country as an insert in local newspapers that it will no longer be distributing the government owned publication over outstanding debt running into millions of shillings.
Standard Media Group is also said to have written to GAA also indicating to follow the direction taken my NMG. The government agency owes different media houses more than Sh 2.5 billion in unpaid advertising revenue.
Standard Group is claiming Ksh 931 million from the government, Nation Media Group is asking for Ksh 835 million, while Mediamax Network Ltd is yet to recover Ksh 462 million from the financial year ended June 2018. Royal Media Services and Radio Africa Group/The Star newspaper are demanding Ksh 60 million and Ksh 423 million respectively.
Media capture is a growing phenomenon linked both to the resurgence of authoritarian governments as well as to the structural weaknesses presently afflicting media markets. In this environment, the political elite and economic barons are colluding to undermine the independence of privately-owned media through control of advertising revenue.
In Kenya, the government has made operations of media houses unbearable since it stopped directly advertising in the print and electronic media and instead introduced My Gov, a publication of the Government Advertising Agency that is published in local newspaper once or twice per week.
Media houses profits have dwindled immensely since the introduction of the GAA as they used get nearly 70 percent of their advertising revenue from both the national and county governments and other state agencies.
President Uhuru Kenyatta and His Highness the Aga Khan Nation Media Group majority shareholder when he visited Kenya recently. PHOTO/PSCU
The Daily Nation on Tuesday wrote an article detailing how the media industry is suffering after the Jubilee administration centralised advertisements under GAA, which procures services on behalf of ministries, departments and agencies, but fails to pay for the same.
The newspaper followed the story with an editorial that called for the punishment of officers who fail to pay suppliers, saying their conduct was denting the government’s image.
The editorial added: “We appeal to the Director of Public Prosecutions to require the Directorate of Criminal Investigations to investigate the failure by the National Treasury to prudently provide resources for the settlement of genuine government debt to Kenyans who have supplied goods and services worth tens of billions of shillings to it and whose lives have now been destroyed or are in the process of being destroyed by this callous disregard for contracts.”
Following the appeal, Director of Public Prosecutions Noordin Haji on Wednesday directed Inspector General of Police Joseph Boinnet to conduct speedy and thorough investigations into the matter and to update him about the progress after every 21 days.
Mr Haji in a letter to the IG said that the Daily Nation editorial alleges that the accounting officers have violated the provisions of the Public Finance Management Act that require efficient, effective, economical and transparent use of resources.
“In light of the issues raised in the aforementioned editorial and in the public interest… you are hereby directed to cause speedy and thorough investigations into the issues raised therein,” the letter added.
The DPP’s order is set to turn the spotlight on former ICT Permanent Secretary Sammy Itemere and Denis Chebitwey, who as Director of Public Communications was in charge of the GAA when much of the debt was accumulated.
Mr Denis Chebitwey who was in charge of the Government Advertising Agency (GAA) when it was formed.
However, as per government practice, the burden would be on the current officer holders, Broadcasting and Communications PS Fatuma Hersi and GAA director Ngari Gituku, to explain why the debt is still outstanding. Hersi is in charge of both the GAA and coordination of national government advertising services.
In the Daily Nation story, Gituku said he was willing to start paying as soon as he gets Ksh 400 million which is still pending at the National Treasury.
Though the arrangement was meant to streamline government media buying and cut costs, it appears to have come a cropper with some entities being accused of placing advertisements but then failing to remit money to the GAA.
The Daily Nation also claims that the GAA diverted some of the funds meant for the media to another government agency that was heavily involved in last year’s presidential campaigns on the understanding that the National Treasury will reallocate the same but this is yet to happen.
NMG’s bold move comes at a time the media company is shifting its operations from print to a new tech-driven business model and has started restructuring its operations to align its business to its new evolving strategy.
In June NMG paid staff from the digital department a generous bonus on account of returning a profit in the last financial year and indication that the new tech-driven business model has started paying dividends.
The management opted to reward the digital team after it returned an income increase of 42%, registering the highest growth in the group during the year.
In contrast, revenues from Daily Nation dropped 10%, The East African 21%, Business Daily 11%, Daily Monitor (Uganda) 3% and Mwananchi of Tanzania 12%. While NTV’s income grew by 12%, it was devoured by costs which went up by 14%, resulting in a 58% drop in in general operating results.