The Kenyan Government has been accused of defaulting payment to the
state broadcaster, the Kenya Broadcasting Corporation (KBC), forcing it
into a Sh22b ($29m) deficit, writes Dennis Itumbi for

According to a forensic audit report tabled in parliament, the treasury owes KBC Sh3.3 billion in arrears, having defaulted in funding the state broadcaster since the 2004 introduction of performance contracts in 2004. These contracts encourage self-sustainability.
Information and Communication Assistant Minister George Kahaniri however says: "KBC is not insolvent yet."
The government is itself grappling with a Sh38 billion budget deficit.
The greatest burden on KBC, according to the voluminous reports, say the greatest burden on the profitability of the firm is a Sh13 billion loan from the government and another Sh5.5 billion loan from Japan.
Information assistant minister George Khaniri and Director of Information Ezekiel Mutua confirmed the cash crunch but remained optimistic that the matter would be solved.
“We are negotiating with Treasury to bail the station out,” Khaniri said. “We’ve seen many other parastatals being bailed out, so we remain optimistic.”
The report was compiled by a five-member team from KBC and the ministry of Information and points an accusing finger at the government for draining the firm’s resources by insisting on free services.
The report says an estimated Sh575 million is spent annually to broadcast weekly press conferences by the government spokesman, presidential and prime ministerial functions, and radio and TV programmes sourced from China.
Other government functions broadcast live are also eating into the broadcaster’s profits.
Both the assistant minister and Ezekiel Mutua said the government will have to pay for services rendered or the station has to be funded as a public broadcaster and given Sh845.7 million annually.
“Were it not for the debt, KBC would be competing fairly well with other commercial stations,” Khaniri said.
He said the parastatal generated Sh925 million in revenue last year.
Khaniri said the upward trend in revenue collection since 2004 points at a possible avenue through which the broadcaster can meet its obligations if the loans were assumed by Treasury.
To add to the parastatals woes, it has also fallen victim to the Kenya Communication (Amendment) Act, 2008.
Its commercial partnership with a community radio station – Ghetto Radio – has been rendered illegal since community radios are defined strictly as not-for-profit.
Further, the report faults the management’s decision to allow KBC to enter into a joint venture with K24, a local 24-hour news channel.
While the report is silent on the monetary investment that KBC made, it concludes that the parastatal got “a raw deal”.
The KBC-K24 venture was cancelled on March 30 after K24 breached the contract.
Most MPs contributing to the issue pressed the government to adopt the British Broadcasting Corporation (BBC) model to advance the performance of the state broadcaster.