The State’s strategy to use a Government advertising entity to cut cost has failed to meet expected targets.
According to supplementary budget estimates, the Government Advertising Agency (GAA) has not been able to meet the target of saving 50 per cent Government spend on advertisement.
The National Treasury has now been forced to reduce targets for the agency in hopes that it can at least save 25 per cent of the cost.
The Government under the news and information services has in fact had to increase allocations that were not explained in Treasury’s supplementary budget II. The budget line under which GAA lies has received an additional Sh299 million without an indication of what the money would be spent on.
Initially, the agency’s budget was Sh2.5 billion, but it has now been increased to Sh2.8 billion without clarity on whether the money will go into recurrent or capital spending.
In its MyGov website, the agency said it had been able to get more bargaining power to negotiate for favourable rates for Government advertising.
“It has standardised rates and enabled better negotiation power, generating savings as well as eliminating duplication,” said the agency. It has, however, had its target scaled down to ensure all the ministries, departments, parastatals and semi-autonomous and autonomous Government agencies advertise through it or face sanctions. The Government owes media houses over Sh1 billion in unpaid ad bills.