Financial challenges of Kenya’s media houses seem far from over, following latest directive by the government to ministries and state agencies on public advertisement printing and distribution.
- In a notice from the Ministry of ICT, Innovations and Youth Affairs to all Principal Secretaries, CEOs of State Corporations, Independent Commissions and Vice Chancellor of Public Universities, all adverts will be printed and distributed by the Star Newspaper.
- The two-year contract will starve Daily Nation, The Standard and The People Daily millions of shillings they previously enjoyed from printing and circulating the government adverts through MyGov.
- Up until recently, MyGov was regularly printed and distributed by four daily newspapers (Nation, Standard, Star and People Daily).
“For the next two years, the Star newspaper will be the sole printers and distributors of MyGov, giving the paper a wide presence on all the online and broadcasting channels run by the Convergence media,” said Edward Kisiangani, Principal Secretary the Ministry of ICT, Innovations and Youth Affairs.
“The terms of this contract restrict print advertisements emanating from all public institutions, save for counties, to MyGov. Any requests for exemptions to publish advertisements outside MyGov, on a day other than Tuesday (When MyGov is published), will be directed to the Star Newspaper upon authorization by my ministry,” he warned.
A circular from the Treasury in 2015 communicated a Cabinet decision to centralize public sector advertising, by creating the government advertising agency (GAA) as the coordinating institution for all public sector advertisements, announcements and other official notices.
Two years later, another circular from the office of the president established MyGov newspaper as not only the official government medium for all public sector print advertisement but also as a mouthpiece for propagating government development agenda through in-depth editorial content that cuts across all segments of the public sector.
The contracts with the four dailies expired in December last year. Prior to the expiry of the contracts, the ministry floated a new tender for public sector advertisement, which the Star Newspaper won.
By March last year, the government owed print media outlets KSh332.3 million in pending bills for circulating MyGov. KSh873.11 was owed to the media houses as at June 30, 2021, of this amount KSh522.68 million had been settled by February last year.
The news is a blow to media houses currently grappling with cash flow problems that has seen some delay staff salaries by many months adding more pain to the workers hit hard by the high cost of living.
The shrinking revenue has also led to continuous layoffs in big media houses. Last Nation Media announced a profit warning advising the public that it expects its full year earnings to be below 25 per cent compared to a year earlier.
The media house attributes the decline to a challenging business environment occasioned by drastic rise in fuel prices, depreciation of the Kenya Shilling, rising interest rates and higher taxes.
“In addition, the increase in global prices of newsprint coupled with a weakened Kenya Shilling against the dollar and higher distribution costs arising from fuel prices have resulted in significant incremental direct costs compared to [the] previous year,” noted Angela Namwakira, Company Secretary Nation Media Group.
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