Sonko targets Sh2bn with new law raising advertising ratesThursday September 13 2018
Nairobi Governor Mike Sonko has signed into by law a bill that will review outdoor advertising and signage rates in the county in plans to raise Sh2 billion revenue annually.
The governor assented to the Nairobi City County Outdoor Advertising and Signage Control and Regulation Bill 2018 Sonko, on Wednesday.
The new law provides a framework to regulate the advertising industry by seeking to tighten the noose on outdoor advertisers in the county through the introduction of stricter enforcement on defaulting by advertisers. The regulations also seek to increase rates paid for displaying advertisement and curb the destruction of the environment by the marketers.
In June, former acting Finance executive Charles Kerich earmarked billboards and advertising as one of the revenue streams whose fees would be reviewed — to enhance compliance, expand the bracket of payers and tighten 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’s to match existing market realities,” he said in City Hall’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 City Hall law also seeks to control the spacing between billboards to reduce the cluttering of streets with publicity materials, cut the number signposts placed along roads, including billboards and lit box advertisements placed on street light poles.
Growing consumerism in Nairobi has seen the mushrooming of outdoor advertisements, especially along major highways such as Thika Road, Mombasa Road, Ngong Road, Lang’ata Road and Waiyaki Way but this has not translated into higher revenue for the county.
Outdoor advertising is the fifth largest source of internal revenue for City Hall, accounting for more than Sh700 million annually. However, the revenue has been dwindling.
Advertising raked in Sh720.02 million in the 2016/17 financial year but dropped to Sh698.05 million this financial year.
Former Land executive Peter Wachira, now Agriculture executive, said earlier more than 200,000 signage and 1,000 large format advertisements, net a paltry Sh700 million annually against a potential of more than Sh2 billion.
He said City Hall loses more than Sh1.3 billion from the outdoor advertisers who evade paying licence fees and use dubious means while declaring the number of billboards for approval.
He said the City Hall loses Sh1 billion annually from 200,000 owners of small signage in shops and stalls in Nairobi.