Newspapers on a stand in Kampala. Government’s  decision to cut advertising in private media was taken without much thought about its impact on media businesses.  PHOTO/ MICHAEL KAKUMIRIZI


Pulling out government ads is policy reversal  

What you need to know:

Government’s  decision to cut advertising in private media will shrink the space for private media businesses in the country since government is the biggest spender in the economy.

President Yoweri Kaguta Museveni’s directive ordering all ministries, departments and agencies of government (MDA) to only advertise with the Uganda Broadcasting Corporation (UBC) is mind-boggling and offensive to the economic liberalisation policy the country is implementing, Prosper Magazine has established.

After frantic lobbying, UBC leadership’s wish made it into the Budget Execution Circular (BEC) for the financial year 2023/2024 dated July 10. (REF/BPD 86/ 179/01 dated July 10, 2023)
Time and again, UBC’s leadership has been decrying the public broadcaster’s under-funding challenges, alleged denial of government advertising, and the burdening debt they are struggling with.

A man reads a newspaper in Kampala. In the wake of full blast liberalisation, government should ensure fair competition instead of handing undue advantage to an industry player. PHOTO/ MICHAEL KAKUMIRIZI

With the communication finally being passed over last month (July 18th) by the Secretary to the Treasury and the Permanent Secretary, Ministry of Finance, Dr Ramathan Ggoobi, following a constant reminder by UBC about a letter dated March 6, 2023 where the President directed that in the FY2023/2024 all government advertising must be through UBC and print media should be through New Vision.

Media industry experts, economic analysts, policy specialists and policy makers spoken to for this article are still struggling to comprehend the logic behind the President’s directive pertaining to ring fencing government advertising spend for only UBC in an economy that Mr Museveni himself liberalised about three and half decades ago without thinking twice – believing it is the right thing to do.

In the wake of full blast liberalisation, government should ensure fair competition instead of handing undue advantage to an industry player who is already a direct beneficiary of the tax payers’ funding – treasury.

Informing the President’s directive, going by his own account, is the fact that the national broadcaster is indebted, let alone inefficiently managed, something he says he is willing to address at an opportune time. But apparently, this will be at the expense of the entire media industry’s lifeline --- the much needed government advertising spend. 

Public trust and confidence…
A report assessing Uganda’s media sector, basing on the media development indicators (MDIs) carried out by the Department of Journalism and Communication (DJC), Makerere University, reveals that although there is no deliberate policy of selective advertising, the Ugandan government favours advertising with state-owned media. In addition, influential government individuals who own media houses, also get more advertisements from the government.

Uganda Broadcasting Policy defines public broadcasting as “a system of broadcasting that is accountable to the public, and operated on a non-profit basis to meet the full range of public information needs in the overall public interest”.
However, according to the report, the performance of UBC in the implementation of these functions is often below expectations. Further, the functions themselves are sometimes contradictory to the ideals of public service broadcasting.

The study supported by the United Nations Educational, Scientific and Cultural Organisation (UNESCO) International Programme for the Development of Communication (IPDC) and carried out by the Department of Journalism and Communication, Makerere University, Uganda also found out that, “the public has more trust in the private media than the government media.”

Economics that works?
Thirty six years down the road, government has been running a liberalised economic policy where the private sector takes charge in leading the economy while the government ensures a conducive environment for investment.

A newspaper vendor sells copies of Daily Monitor in Kampala. Freedom of expression can easily be crippled by such policies whose impact has a bearing on quality of content that can aid investment decisions, employment and revenue to government.  PHOTO/ MICHAEL KAKUMIRIZI

For “economics that works,” this means fair competition for government advertising spend, given that by far, according to government statistics, majority of the private media businesses in Uganda, are locally owned and employ majority Ugandans. They also pay taxes and command the biggest market share, let alone credibility.

Unlike many other economic sectors where repatriation of profit is the order of the day after earning the money here, including through government contracts et al, majority of the media industry players, considering their ownership composition, retain most of their earnings accrued mainly from advertising revenue, within the economy.  

Therefore to exclude private media from fairly competing for government advertising spend irrespective of its appeal, impact and massive coverage it offers, including for government programmes, sometimes even under duress, begs the question about how such decisions with socio-economic implications are arrived at.
This also exposes economic managers’ limited or lack of influence that should inform the executive arm of government about “economics that works” before making such decisions with bearing on livelihoods.   

A quick look at the revenue contribution of only three private media houses – selected randomly reveals that in the last three financial years (2020/2021,2021/2022 and 2022/2023), collectively they contributed about Shs60 billion to the national kitty. This is an equivalent of four financial year budget allocations for Uganda National Bureau of Standards (UNBS) to safeguard the population from being exposed to or against consuming substandard/counterfeit goods, some of which are dangerous to human health.

Advertising budget
For the financial year 2022/2023, government spent Shs100.5 billion on advertising and public relations with Parliamentary Services Commission as the top advertiser with an advertising budget of Shs17.6 billion. 
Meanwhile the Human Capital Development Programme has the highest allocation for advertising, amounting to Shs18.8 billion. About 86 per cent of advertising spend was from internal financing and only 14 per cent was external financing.

The same trend, albeit minimal changes in allocations, is likely to continue, only that this time  the directive is channeling all government spend to UBC and New Vision. 

Mr President seems to have fallen into the UBC top leadership/agents/brokers narrative to keep everything for themselves even the alleged 10 per cent that the entire private broadcasting media segment (Radio and TVs) in the country attracts from government advertising spend.

In 2017, the media fraternity and other Civil Society Organisations in Kenya resisted a similar attempt by the former President Uhuru Kenyatta to ban state advertising from private media, in  a move the then government said would “save money.” 

Market distortion
The directive to preserve government advertising spend to the national broadcaster who is already drawing money from the Consolidated Fund, will according to media industry experts, cause market distortion. 
When contacted, the executive director of African Centre for Media Excellence (ACME), Dr George Lugalambi, noted that the directive by President Museveni is a recipe for market distortion.  

Dr Lugalambi, a specialist in media, journalism, communication, and social and behaviour change suggests that,  “This is some form of anti-competition. We also know that private media in particular invests in products that attracts the market and draws in audience. So ring-fencing government advertising spend is contradictory, considering that private media pays taxes too.”

Dr George Lugalambi, the executive director of African Centre for Media Excellence. PHOTO/ FILE

He continues: “UBC, as a public broadcaster should be fully funded by government so that it doesn’t suffer any form of competition from the private media. As for the New Vision, it is a publically listed company, meaning it should be able to freely compete in the market with other private players irrespective of government having shares in the company.”

With exclusive government funding, Dr Lugalambi, believes UBC will rediscover its purpose and niche of delivering exclusive programming rather than complain about government’s advertising spend – a matter that should be left to the market forces.

Policy reversal
In an interview last week with the executive director, Civil Society Budget Advocacy Group (CSBAG), Mr Julius Mukunda, he said Mr Museveni’s directive, in many ways, redefines the meaning of liberalisation policy. The only problem is that “this seems selective.”

“In 1990s, government decided that there is need to liberalise the economy, meaning that we open up the market to allow for a healthy competition in return for better service delivery. Now, the government is saying we no longer need liberalisation,” said Mr Mukunda during an interview.

He continued: “I have always heard that our economy is private sector led. But this directive doesn’t speak to that mantra. This means we may have to change the whole National Development Plan that is anchored on private sector taking charge of the economy.”

According to Mr Mukunda, in a democracy like Uganda, freedom of expression can easily be crippled by such policies whose impact has a bearing on quality of content that can aid investment decisions, employment and even revenue to the government.  

 The inadvertent drop in revenue is likely to erode the private media’s ability to hire and retain talented journalists.

On the 10th of this month, unless the plans changes, National Association of Broadcasters (NAB) will meet Mr Museveni to discuss the directive that has rubbed the majority of industry players the wrong way, except a section of top leadership at UBC and Vision group – both government mouth pieces. 

However, calls for dialogue and discussion around the matter are gaining momentum.
Secretary Media Council of Uganda, Mr Kyetume Kasanga, said in an interview last week that there are discussions around this subject – directive to ring fence government advertising spend, adding that anytime, “the country and the stakeholders will be updated.” He said there are about 60 newspapers in the country although not all are registered with the Council.