Namibia: NBC Moots Another Turn-Around


In Windhoek, National public broadcaster, NBC, is mooting drastic changes that are bound to ruffle feathers within the market of commercial radio broadcasting and related services, in its quest to generate a profit.

The brash NBC director-general Albertus Aochamub says the changes, which include introducing new non-traditional/conventional services associated with NBC and cost adjustments for current services, are necessary to finalise the "financial clean-up" and to turn the beleaguered public broadcaster into a "going-concern entity".

"We need to get [fair] returns for what [our services] are worth," said Aochamub, adding that the NBC is aware that it would be accused of bullying or monopoly because some services will be encroaching on areas where private commercial operators have become accustomed to operating outside NBC's operational parameters.

The pile-up of financial and operational chaos at the NBC is so dire, that even though progress was made in the 2011/12 financial year, a lot still remains to be done. Current financial results showed "progress", said Aochamub of the first NBC financial statements to reach the Auditor-General in about four years.

The NBC has not been complying with the legal auditing requirements since 2009 and had to work around-the-clock to have an updated audit.

Preliminary and unaudited figures for 2011/12 indicate that expenditure escalations are being contained. The NBC's self-generated revenues increased by nine percent and the verification and registering of assets is almost complete.

The NBC generates revenue from advertising, transmission rentals and TV licences, all of which went up considerably over the last financial year to register a combined income of N$63.4 million for the year under review. Expenditures were contained at N$211 million, which is still three percent higher than the previous year.

Yet the present financial standing is not enough to support and sustain the broadcaster's future operations, more so given the looming December 2013 deadline to switch from analogue to digital terrestrial television (DTT) - an exercise that requires about N$200 million this year alone for transmission infrastructure upgrading.

This is against a paltry budget allocation of about N$150 from the Treasury.

The NBC has set itself a target to triple its own revenue by 2015. The "financial clean-up" is not exclusive to the financial and operational areas, which is evidenced by the absence of audited comparable figures from previous financial years and the lack of depreciation and amortisation elements in the current financial results.

The broadcaster also wants to have its assets yield the actual value deserved.
The NBC is still sitting on principal debts of about N$240 million in pay-as-you-earn (PAYE) taxes, VAT, as well as employee contributions to a pension fund. Hence, the drastic changes in billing and costing.

Non-core services rendered to outside customers will be re-evaluated to come up with fair market-related costing models. New costing would also apply to transmitter rentals, with a review to see the actual value and rental price benchmark in the market.

"The sites are the best countrywide, it would not be unfair [for NBC to charge market-related rental fees]," said the unapologetic Aochamub.

In addition, the finalisation of the asset register will help place NBC in a very good financial standing - at least with local financial institutions.

The asset valuation and registration will allow banks to deem NBC credit-worthy, something that would smoothen its rancorous cash-flow situation.

The process is, however, cumbersome, with Aochamub admitting that the NBC "has no idea of how many properties it owns or the value of those that it knows it owns."