The outdoor advertising industry in Kampala City is in a mess and must be sorted out now according to Kampala Capital City Authority (KCCA). That explains why the Authority pulled down "illegal" billboards in some parts of the central business district a few weeks ago. Come March 18, KCCA will announce a final decision on how to proceed with the process of streamlining the outdoor advertising business in the city. But even before then, the proprietors of the business under their umbrella body - the National Outdoor Advertising Contractors' Association (NOACA) - are bitterly counting their losses, amounting to billions of shillings.
The swoop on the billboards took them by surprise and was illegal according to NOACO. This is because in September 2012, they secured a court injunction blocking KCCA from removing their structures until the two parties agreed on an out of court settlement. To date, the out of court negotiations have not yielded much fruit due to lack of cooperation from KCCA, according to NOACA, and the city authority acted in breach of the court injunction to pull down their structures.
However, Jennifer Musisi, the KCCA boss, reportedly said in a meeting with NOACA on Feb. 18 that she was not aware of the court injunction and that in her opinion, she thought it had expired. Outdoor advertising includes billboards, posters, airport ads, bus signs, mall posters transit shelters, stadium signs, bench advertising among others. But what is common in Kampala are the humongous billboards, which are obviously more profitable and are contracted by corporate companies, government agencies and ministries and NGOs to pass on different messages to the public. Players told The Independent that on average, advertisers pay between Shs 100, 000 - Shs 1 million to hire space on those structures per month.
Currently, KCCA gets about Shs 1 billion in revenue from the known registered companies. It is unclear whether the figure will increase or reduce after streamlining the sector. According to NOACA figures, the 18 active members of the association have invested between Shs 2.5 - Shs 3 billion each on the various structures across the country, but 60% of their investment is in the Central Business District (CBD). The City Authority says there are over 5, 000 advertising structures squeezed within the CBD, which contributes a great deal to the confusion in the city. The plan is to reduce them by 70%. Prime areas like junctions will have four large billboards, as provided for in the 2008 Outdoor Advertising Guidelines. Currently, these junctions have more than this number, according to KCCA.
The Authority says the streamlining process action is part of the measures put in place to de-congest, beautify and re-organize the city. Contractors (outdoor companies) say they have running contracts with advertisers and thus, removing the structures now has huge legal and financial implications. They want more time - at least five years - to sort out their issues with the advertisers.
The association says clients spend slightly over 10% of their advertising budget on outdoor advertising - that is Shs 40 billion according to the Ipsos report of 2012/13 - and of which only 6.5% (Shs 2.6 billion) is spent in Kampala. This partly makes the venture less profitable.
The return on investment here is realized in between 3-5 years, given the fact that erecting a single sizeable structure would cost up to Shs 60 million, according to Umar Kakonge Ssali, the managing director at Contact Graphics, and the acting chairman of NOACA. They want KCCA to consider these factors while calculating the advertising fees.
KCCA officials were in agreement that indeed the concerns of revenue loss from advertisers and the advertising companies were legitimate but said they were open to discussions.
"We have been telling them to remove their structures since last year," said Peter Kaujju, the Authority's spokesman.
NOACA said in a press notice that KCCA believes that outdoor adverts are an eye-sore and should be removed in the city in the name of beautification, something NOACA have always objected to. Also, some of the structures are sub-standard - it is common to see collapsed billboards, which endangers public safety. Clearly, the NOACA also needs to put its house in order, according to KCCA.
The City Authority insists that over the last few years, there has been an upsurge of illegal placement of advertising tools, which pose a hazard to the public. They vehemently deny that any illegal structures have been erected during their term in office. They say the majority of these advertising tools were over time been erected in road reserves without seeking for approval as stipulated in the Roads Act. The Authority says the tools have become a hindrance to road construction works and pedestrian traffic, a reason why they have over the last two years asked the various advertising companies to pull down their illegal tools but to no avail.
NOACA figures indicate that their activities employ over 1, 000 people and the spiral effect is more on top of paying direct taxes to KCCA, UNRA and URA.
Industry players argue that outdoor advertising is somehow cheaper than the other modes of advertising like print, television and radio among others, a reason why it has to be organized in a way that enables all stakeholders to benefit.
For instance, in Uganda advertisers pay up to about Shs 1 million for the largest structure per month compared to over Shs 5 million or more charged by newspapers for a page in one print run. TV advertising is equally expensive compared to outdoor.
"In fact many would prefer outdoor to print or TV," said Isaac Oteng, the technical director at Super Signs Uganda. He adds that the problem is largely with KCCA and not the advertising companies and it is up to the Authority to "put its house in order" before making the players to suffer for it.
"If they are saying that these structures are illegal, where did the licenses come from? We have also seen structures that have come up under the KCCA regime which they say are illegal," he says. "Let them clean their house first and then the rest will follow."
KCCA's unpaid billions
However, the companies have not done their cause any favour because they have accumulated arrears amounting to billions of shillings, which has however been attributed to the fact that some advertisers take long to pay up.
Otenga argued that "transformation of cities is always a process and it takes time." In fact, officials at Contact Graphics, one of the contracted companies in the industry, said they have just cleared their arrears with KCCA amounting to Shs 60 million and that many companies under NOACA are willing to do the same.
Though the Authority halted the demolition exercise until the meeting of March 18 makes a final decision on the way forward, some advertising companies are not sure about their future. Already, there is a lot of suspicion as some members believe that KCCA wants to edge them out so that they can give the business to those who are politically connected.
However, KCCA officials deny these accusations and say there is no ulterior motive apart from the fact that some structures were removed due to failure by contractors to meet their debt obligations to KCCA amounting to Shs 1. 5 billion. Others were illegally placed in road reserves and in unauthorized locations. This constitutes an illegality according to KCCA. The Authority says the advertising tools can also be illegal under various circumstances as provided in the Public Health Act, Physical Planning Act, Road Act and KCCA Act.
Also, some billboards were designed in sizes higher than the one provided for in the Outdoor policy guidelines of 2008, which the Authority is using to regulate the sector at the moment. The guidelines recommend a maximum size of six by three meters, but many structures go well beyond this.
Though KCCA argues that the contractors have the duty to know the laws under which they operate, the outdoor companies say "they have not been well-sensitized" by KCCA on these laws and thus the implementation of the same was unfair.
The Independent has established that Musisi, the ED, has stepped up her efforts to discuss the matter with different stakeholders. In her first meeting with NOACA members in her office on Feb. 18, Musisi dismissed as untrue reports that the Authority was not willing to involve contractors in the process of streamlining the industry. She urged NOACA members to make honest statements about KCCA about the matter if they are to reach a 'win-win' position.
She said that KCCA wants to restore public confidence in the administration of city affairs, which was compromised by the previous system under the Kampala City Council. Companies are now required to apply or reapply for the available sites by contacting KCCA's outdoor advertising desk during working hours of the week.
Currently, the application for each structure goes for Shs 2 million, renewable on annual basis. Musisi argued that the space in Kampala is too small and that there are so many players competing for that available space, which is why some players took advantage to erect structures illegally. She said that they are compiling new guidelines that will help the city authority to regulate the industry in future. There is a fear that some of the players could be edged out of the city.
The association chairman, Katongole says they are not against the process by KCCA, but it should be done cautiously and transparently. In the Feb. 18 meeting, NOACA members reportedly agreed to cooperate with KCCA in streamlining the sector but asked KCCA for more time - preferably five years - before the new changes are introduced. They said they are all willing to meet their debt obligations if they are given more time. NOACA also said KCCA should involve them in the process of coming up with the new regulations to guide the sector.
Peter Babu, the country manager for Sketchers, a design and promoters company with interests in the outdoor advertising sector, said Uganda's outdoor advertising sector needs support to grow if it is to compete with the rest of the region. "Kenya and Tanzania are ahead of us in all aspects like design, regulation, revenue generation etc," he said.
He suggested that KCCA should handle the matter in a way that would not negatively impact the stakeholders, adding that the performance of the economy would play a major role in growing the sector since many of the users are companies involved in fast-moving consumer goods.
"If the economy does well, advertisers, who are key players here, will up their advertising budgets, hence more taxes, more revenues and more jobs would be realized," he said, "but it is a process."
Like other sectors, players said vandalism, high input costs, corruption or lack of transparency in the sector in terms of regulation and issuing licenses remain major challenges. In a bid to smoothly handle the process and to respond to the queries of all stakeholders, KCCA has set up a desk under the Public and Corporate Affairs Division at City Hall to attend to all matters concerning outdoor advertising.