Insight on NBC’s state of affairs

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New Era journalist Kuzeeko Tjitemisa yesterday had an interview with Stanley Similo the director-general of the Namibian Broadcasting Corporation (NBC) on the state of affairs at the national broadcaster.

NE: We have learnt through the media that NBC had its budget drastically cut, and as a result the Corporation is unable to honour some of its obligations to suppliers and its employees such as housing subsidies and the current impasse with NMC that wants to suspend the Corporation’s employees from the medical fund. Can you tell us what has been NBC’s annual budget, and where it is standing now with the budget cuts?

SS: “For the current financial year, the NBC received N$179 million of which N$40 million was used for an outstanding debt relating to the DTT project. This left the NBC with a total annual subsidy of N$139 million from the government.

The subsidy amount NBC initially requested from the government for 2017/18 was N$369 million. Part of building in efficiencies has put us in a position whereby the cost of doing business is currently estimated at about N$345 million.

It is important to note that for the past two financial years the NBC has seen a cut in its annual subsidy to the tune of over N$200 million.

The Corporation has recurring monthly costs and due to the severe budget cut these financial obligations can no longer be met hence the discussions with the shareholder via our Board of Directors.”

NE: Is it possible for you to give us the background on how NBC has traditionally used its budget, how the cut in the budget allocation affects the Corporation’s operations? And in light of these budget cuts is NBC able to fulfil its mandate?

SS: “The management of the NBC has tried to ensure that the budget cuts do not affect its day-to-day operations by aggressively pushing its own revenue generation efforts and by carefully managing its cash flow. However, this form of ‘crisis management’ cannot continue indefinitely. As was correctly reported, the Corporation has started defaulting on some major monthly payments, such as medical aid, pension fund and taxes. Housing subsidies have – so far – not been affected and neither has the public broadcaster’s deliverance on its mandate.

What the NBC management can confirm is that if there is no timely intervention from its main shareholder the situation will worsen to such an extent that daily operations will be affected and possibly even come to a standstill.

At the same time, we can assure the Namibian public that NBC management has actively engaged its main shareholder and that the Corporation is confident that a solution will be found eventually.”

NE: Besides the annual allocation from the Treasury, where else does the Corporation get its funding? And what percentage do such funds contribute to the financials or budget of the national broadcaster?

SS: “The NBC has multiple streams of its own income: These include but are not limited to the selling of airtime (radio and television), programme sponsorships, TV licences and the renting out of transmitters and other facilities. The Corporation is constantly exploring additional sources of income to reduce its overall reliance on state funding.

In the financial year 2016/17, the NBC grew its own income (compared to 2015/16) by 21% from N$84 million to N$102 million. A clear indication that NBC is bringing its part.
Contrary to popular belief, NBC is currently contributing close to 50% to its annual operational budget.”

NE: Is the NBC able to meet its contractual and operational obligations?

SS: “As stated above, the NBC has already defaulted on some of its financial obligations. If there is no timely intervention the situation will naturally worsen. However, NBC has been in contact with all parties affected providing full disclosure, trying to find solutions that will benefit all.”

NE: You have mentioned in your statement regarding NMC, that there are arrangements currently being undertaken to ensure that the employees’ medical aid is covered. Can you explain as to what arrangements are being undertaken to ensure that NBC employees continue to be members of a medical aid fund?

SS: “The NBC’s management has engaged NMC and explained at length its precarious financial situation. Naturally, the corporation is exploring all other options in the event that NMC suspends the NBC. The main aim will of course be to ensure that no NBC employee is left without medical aid at any point in time even if that ultimately means that NBC must find a new service provider.

It is a very sad case indeed that NMC has to treat the NBC in this manner given that the NBC has been with NMC since 2002. We have been contributing [millions] to their coffers hence our difficulty in comprehending their draconian stance now that we have financial strain.”

NE: We also understand that you have requested assistance from the government. How much have you requested from the government and when do you expect to receive feedback on the request?

SS: “It is correct that we have had many meetings with our main shareholder via our line ministry, requesting the shortfall in funding. These funds will be used to pay outstanding debts, finance daily operations, fund major necessary projects and to continue the process of digitalizing television. NBC management through the Board of Directors hopes to get positive feedback from the government soon.”

NE: Which of your operations have been affected the most?

SS: “As stated above, there has been a very limited effect on our daily broadcast operations to date – this was by design as NBC management wanted to ensure that the public are not adversely affected. However, there is no guarantee that the situation will prevail.

That said, the NBC can also confirm that in addition to defaulting on payments to creditors such as NMC, major projects have had to be downscaled and/or put on hold. The national roll-out of DTT has been one of these projects, as well as the upgrading of radio main control, radio studios, TV studios and transmitters.”

NE: There was also talk that NBC has been affected by the resignation of some key staff in its editorial department. How has this affected NBC?

SS: “This is nonsensical since the resignation of staff is part of any normal business. The movement of people is one of those things that you can’t really control. Some will go and new ones will come on board while those that have left might also come back.”
NE: With these budget cuts is NBC still being able to offer quality TV content?

SS: “Yes, despite the constraints the NBC has been delivering fully on its mandate. Aside from the two television channels that the NBC added recently – one focusing on sport (nbc6) and the other one on local and international music (nbc5) – the Corporation has very successfully broadcast the Miss Namibia pageant, the NAMA awards, the state of the nation address, the opening of parliament, the national budget speech of the finance minister – to mention but a few. The list is long and clear evidence of the fact that the NBC is doing its utmost to continue fulfilling its obligations to the Namibian nation.”

NE: Considering the current status quo, will the NBC be able to afford to cover the upcoming Swapo congress, if no, how much will the NBC need to cover the event? if yes, how much will the Corporation spend to cover the congress?

SS: “The coverage of events is what we intend doing hence when the funds are not adequate, some of these activities might be affected. The NBC remains hopeful that its main shareholder will intervene and that the Corporation will indeed be in a favourable position to cover all future newsworthy events (including the congress). The cost of the coverage of any event highly depends on the location, its duration and whether the coverage will be live or recorded.

For its part, NBC management will continue working tirelessly at solving the current financial crisis, remaining fully committed towards the Namibian people.”

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