Big Changes At The Nation Group: What They Mean

The Nation media Group had some big news of its own to announce this week. Chief Executive Wilfred Kiboro (62) is retiring and will be replaced at the helm of the largest media company in the region by a Mr Linus Gitahi (39). Mr Gitahi, a Kenyan has been managing director of GlaxoSmithKline for West Africa, based in Lagos, since 2003.

The changes at the helm of the group are very significant news more so because of the timing. The country is rapidly hurtling towards a crucial general elections expected late next year. If there is any medium that can be credited for having done the most to bring the Narc government to power then it has to be the Nation group. Both the Daily Nation and NTV did an excellent job of portraying leading figures in Narc (includiong President Kibaki) in positive light ahead of the 2002 elections.

My prediction is that this time, the Nation group is set to play an even bigger role in helping decide who will be in the next government and more importantly who the fourth president of the republic of Kenya will be. (see my other post).

Mr Kiboro is to stay on as a special advisor to the board to ensure continuity and a smooth transfer. In fact Mr Kiboro’s influence will continue to straddle the Nation group for a long time to come.

In the same statement announcing Kiboro’s retirement, another significant appointment was also announced; that of Dennis Aluanga from group finance director to a newly created post of chief operating officer with direct responsibilities for group finance, newspaper operations and group strategy.

This is a major reorganization of the top echelons of the Nation media group and they speak volumes.

It makes Dennis Aluanga, almost joint chief executive officer in charge of finance and in many ways the de facto boss at the Nation group. Effectively it also means that Mr Kiboro who has single-handedly overseen Mr Aluanga’s meteoric rise to the top, remains a very influential man at the Nation Center, even in his absence. This reorganiozation could also mean a lot more power for experienced editorial director Wangethi Mwangi.

To give credit where it is due, Mr Kiboro will go down in history as the most successful Nation Media group chief executive so far. There is no doubt that he has brought more professionalism into the media house. Without doubt his biggest achievement has been the birth and rapid growth of one of the hottest divisions within the group namely the Nation Courier Services.

This star subsidiary single-handedly gives the Nation an edge in terms of newspaper distribution and makes it very difficult for any new entrant competitor to challenge the newspaper’s top position in newspaper circulation. Newspaper distribution in many African countries is a serious challenge and can easily turn high newspaper sales into a loss making exercise in futility. The main reason has always been the fact that trucks travel deep into the countryside to deliver newspapers where there is no guarantee of 100 per cent sales. They than have to make the return trip with no cargo other than unsold newspapers. The courier service introduced and strengthened during Mr Kiboro’s reign is a good idea at the right time because mobile telephony and the Internet have dramatically increased the demand for courier services all over the world. This Nation service means that the group can deliver newspapers for free while courier clients pay the bills. They can then later charge the hefty expenses between the companies for tax reasons.

Mr Kiboro will not ride to the sunset without regrets and failures to muse over. Top on his list will be two babies that didn’t quite make it. They are the company’s decision to invest in Tanzania without adequate research on the political thinking and culture in that country and the authoritative EastAfrican newspaper. Although both these investments have shown profits in the books, the reality on the ground is that they have performed well below the high group standards. The EastAfrican, an excellent newspaper unmatched in quality has many similarities to Rupert Murdoch’s The Australian, in that it is a prestige project that does not make very much money. It even eats into Daily Nation newspaper sales on Mondays, when daily newspapers are usually thin on hard news.

The Tanzanian fiasco that saw 6 senior members of staff being deported from that country under mysterious circumstances was swiftly followed by the refusal of the Tanzanian immigration department to renew the work permit of the Country manager Mr Waweru over what insiders say was a careless (though factual) comment at a social function about the working habits of Tanzanians.

The situation now is that Tanzanian managers are busy trying to prove themselves under strict supervision from Nairobi, as a rival joint venture between the East African Standard and Tanzanian media magnate Reginald Mengi continues to take off like a rocket. The venture has two newspapers, namely This Day and Kuli Koni, a Swahili title. It is clear that the Standard newspapers approach was the right direction to take in this strange East African member state.

The main cash cow sustaining the group in that country is the Mwananchi newspaper which has gained tremendously from the Nation’s understanding and strength in the distribution of newspapers.

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