Governor Sonko approves review on Nairobi’s advert rates

Nairobi Governor Mike Sonko has signed into law a bill that seeks to review fees payable for outdoor advertising and signage in the county to match existing market realities.

Mr Sonko assented to the Nairobi City County Outdoor Advertising and Signage Control and Regulation Bill, 2018, on Wednesday.

The new law provides a framework to regulate the advertising industry by seeking to tighten the noose on outdoor advertisers through introduction of stricter enforcement methods against defaulting by advertisers, increasing rates paid for displaying adverts and curbing on destruction of the environment by the advertisers.

In June, former acting Finance executive Charles Kerich labelled billboards and advertising as one of the county’s revenue streams that was to undergo review of its fees and charges with a view to enhancing compliance, expanding the bracket of payers and tightening management controls for more efficient collection and accountability.

“In order to improve our capacity for internal revenue mobilisation and improve the city’s competitiveness as a destination for investment, I will be proposing a review of fees payable for outdoor advertising and signage to match existing market realities,” said Mr Kerich while reading Nairobi County’s budget statement.

According to Outdoor Advertisers Association, Sh160,000 is the minimum monthly charge for 10 by 12 metre billboards in Nairobi and other major towns.

The law also seeks to control the spacing between billboards to reduce the cluttering of streets with publicity materials, reduce the number of signposts placed along roads including billboards — whose number and size have been growing in the last decade — and lit box advertisements placed on street light poles.

According to the regulation, no more than one advertising structure should be visible along a given sight line along major corridors.

Growing consumerism in Nairobi has seen the mushrooming of outdoor advertisement, especially along major roads such as Thika, Mombasa, Ngong, Lang’ata and Waiyaki Way but this has not translated into added revenue for the county.

Outdoor advertising is the fifth largest source of internal revenue for the city’s administration, accounting for over Sh700 million annually but this has been dwindling with every passing year.

The revenue stream raked in Sh720.02 million in the 2016/2017 financial year but this dropped to Sh698.05 million in the just concluded 2017/2018 financial year.

Former Lands executive Peter Wachira, now Agriculture executive, earlier this year said that Nairobi County had over 200,000 signage and over 1,000 large format advertisements which nets City Hall a paltry Sh700 million annually on average against a potential of over Sh2 billion.

He said that the county loses over Sh1.3 billion from the outdoor advertisers who evade paying licence fees and using dubious means while declaring the number of billboards for approval by the county before installation around the city.

Mr Wachira noted that the county was losing Sh1 billion annually from 200,000 owners of small format signage in shops and stalls in Nairobi who are supposed to pay Sh5,000 per signage but fail to do so.

He stated that outdoor companies are required to pay Sh1.3 million for each large billboard and between Sh20,000 and Sh50,000 for the small ones per year.

“We only collect 20 per cent from all installed billboards. They install 100 billboards but they seek approvals for only 20 of them. They are evaders of licence fees denying City Hall Sh1.3 billion in revenue. We are supposed to raise over Sh2 billion from the advertisers but we get a paltry Sh700 million so they take away from the county government over Sh1.3 billion,” said Mr Wachira.