The government owes Nation Media Group, Kenya’s leading media house, more than Ksh150 million in advertising revenues. The debt dates back to the last financial year, and had accumulated to Ksh155.5 million as at 31st August, 2015.
The company, through its advertising director Michael Ngugi, has written to the newly-created Government Advertising Agency (GAA) in an effort to recover the money after hitting a dead-end in the various ministries and institutions.
In a letter dated October 1st 2015 to Dennis Chebitwey, the director of public communications, under which GAA falls, Mr Ngugi expresses frustration faced by the media house’s officials in making follow-ups for payment.
“We have made follow-ups with various ministries/institutions for settlement of the pending bills incurred before GAA was set up,” says Mr Ngugi in the letter seen by BusinessToday. “We have written to accounting officers in the various ministries which have acknowledged the debt while others are yet to respond.”
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The print department, which includes Nation newspapers, Business Daily, The East African and Taifa Leo is owed Ksh133.8 million, the broadcast division Ksh40.7 million, while the digital division is claiming Ksh845,645.
He said while some ministries had shown willingness to pay, others had referred NGM to GAA to settle the bills. GAA, which seeks to centralise government advertising, became operational from July 1, 2015. It is understood that GAA does not have its own advertising budget but manages ad spend as budgeted by the various ministries from the current financial year, which does not cover the previous year. “We have made progress with some ministries while others have indicated that that GAA is responsible for settling the ad bills, including past bills,” Mr Ngugi writes.
Sources at GAA say it will be difficult for it to settle the bills since it is working based on current year advertising budgets given to them by various ministries. Nation Media Group does not list the various ministries that owe it the money, but calls for an amicable dialogue with GAA to help it get recover the dues.
The government is one of the biggest advertisers, with an estimated ad spend of about Ksh8 billion per year. Given the fact that it rarely defaults on payment, media houses often given huge credit on advertising and ends up piling unpaid bills.
The Standard Media Group is also owed nearly the same amount and when combined with other media houses, the government’s pending bill for advertising is estimated at over Ksh400 million, according to industry sources. The claim comes at a time when the government is facing a financial crisis, with reports that its coffers are running empty due to low collections from taxes and growing bills.
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