The plan to cut foreigners out of the lucrative outdoor advertising business has lost traction at the highest political level in the Gaborone City Council and those businesses will continue to rake millions of pula albeit under a changed landscape.
Initially, Mayor Haskins Nkayigwa was among those who were keen on the plan, to an extent where he publicly explained why it was necessary to reserve the business for citizens only. However, he has since re-considered.
“The Council never actually took a firm position on the issue; that was just an idea being floated around. Ultimately we decided that it would be prudent to keep foreign-owned companies in the business because there is a lot that locals can learn from them. If you look around, you will realise that generally, our standards tend to be low compared to those of foreigners and cutting foreign-owned businesses out would have had the effect of lowering the city’s aesthetic standards,” says Nkayigwa, revealing at the same time that his office received representations from foreign companies that were greatly displeased with talk of being pushed out of the lucrative business.
Besides empowering citizens by cutting out foreigners, Nkayigwa has also stated that there is need to ensure that GCC itself makes as much money as it should from the business. In a previous interview, he said that it was odd that the advertisers earned millions of pula from billboards while the Council itself got next to nothing.
“Most of these guys are millionaires: they can make P100 000 a month while the Council gets as little as P2000. We currently charge for the area of space leased out when we should be getting a percentage calculated on actual income earned as happens in other cities,” he said last year.
What he further revealed on Friday was that the Council makes P5 million a year while it was possible for it to make five times that much in the same period of time.
“The government says that it has no money and as a council we should be able to raise our own,” the mayor said.
However, the issue goes much farther than how much the Council can make but how much it can collect. In the third quarter of the 2011/12 financial year, it had projected to get P3 million but managed to collect less than half of that, incurring a shortfall of P1.6 million. The Council had also hoped to make P4.7 million from returns on its investments in the city but managed a measly P42 000.
With specific regard to outdoor advertising, the Council is in the process of developing bye-laws that will provide guidelines that will regulate how this business is done. Nkayigwa said that the draft is in its final stages and will address the problem of defaulters as an income-sharing formula.
“Ideally we should have an arrangement similar like that for paying VAT and we should be able to make our own physical inspections to ensure that we are not being underpaid. The bye-laws will empower the Council as well as deal with unlicensed advertisers,” he said.