We are restructuring after FG’s delayed digitisation policy affected our investment

Raymond Dokpesi Jr is the chairman of DAAR Communications Plc. In this interview, he talks about the ongoing restructuring in the company and how the business environment has impacted the only listed media firm in the country. 

It’s been more than a year since the passing of the founder of DAAR Communications; has this affected the organisation’s performance in any way?
The founder was a juggernaut. We cannot dismiss or eliminate the presence of our founder in our operations. Just having access to his guidance, advice, wisdom, experiences, and network of relationships has been a game changer. His exit has affected us. But we are also confident that he has given us the right value, knowledge, and expertise required to deal with the issues concerning the industry and the organisation itself.

 
 His exit was a very painful loss and we cannot underscore it. But we have to move on and take cognisance that we have to make the best of what is left and no longer hold on to things that we once had.

Can you provide an overview of the developments and changes that have occurred since his death?
There have not been any developments or changes since he passed away. Before he passed away, we were very eager, enthusiastic, and keen about the diversification of the Africa Independent Television (AIT) brand into a distinct news brand and general entity brand, which is what we have as our national network broadcast licence.
  
So, we had a lot of plans for what we had hoped to achieve. Of course, the transition sends a lot of these things back and definitely in terms of going forward, we have to recognise a new order or how to move things forward. Everything that was there from the day he passed away is still there today. The stories of AIT, Raypower, and DAAR Communications and their contributions to the broadcasting landscape both in Nigeria and Africa are well-documented. We are the pioneer private broadcast organisation in Nigeria.
  
We are the first 24-hour network operation. We have exceeded and been through many critical stages and phases of our national development as a nation, playing the role of the media organisation at the forefront of the fourth estate of the realm. Our contribution to the media industry, policy, and social-political growth and development in Nigeria cannot be contested. Since my father passed away, the questions for us as an organisation have been about: Where does our vision take us? Where are we going?  What are we doing? and how do we get there?
  
The vision, drive, motivation, and energy that came behind DAAR Communications at the very onset were to provide an alternative worldview to what was being provided and positioned by global Western media organisations like BBC, CNN, and subsequently, Al Jazeera. Ours was to be the African voice and the pride of Africa on the continent.
   
It is important to recognise that first and foremost, when we were trying to push, grow, and promote pan-African versions and realities of media at that time, the contemporary media was very in tune with importing foreign music and culture and that might have been a result of the closed nature of our media industry due to the military regime at that time. Since then, we have seen Nigeria and Africa embrace African culture and entertainment as the primary source.

 So, we are open to embracing new approaches, positioning ourselves, and taking our rightful place in the Nigerian media industry and entertainment landscape.

DAAR Communications, which is the only listed media company on the Nigerian Exchange Limited (NGX), has been reporting losses for several years. What led to this and what steps are you taking to reverse this trend?
We haven’t declared profit since listing; the subsequent losses have eroded shareholders’ capital. And turning this around is a multifaceted story and approach. There is no doubt that when we were listed on the NGX, there was a very clear digitisation policy by the government. This policy has not taken effect even up till today. So, a lot of the investments that went into equipment to position us to be at the very forefront of that digitisation frontier in essence has been wasted because we have not been able to capitalise returns on those investments. So, we have been seeing subsequent losses as a reflection of the depreciation value of the equipment that has been invested over the years as well as our failure to capture the market of digitisation, which up till today is still hanging.

However, I believe the regulation of broadcasting needs to be looked at by the regulators, and I’m very much in touch with the Director-General of the National Broadcasting Commission and engaging on how we think broadcast should develop more. Beyond that, as far as technology is concerned, there is a unification of technology today.
   
We are competing in spaces that go and transcend beyond Nigerian boundaries and across technologies. So, we need to be able to adapt, position and come out of this phase as “the African voice” as far as content coming out of Africa is concerned. How do we position and shape for that are the things that we hope to put in place within the next few months to a year. But certainly, we cannot be doing the same things that we have been doing since we were listed and hope to have better financial results.

How has the country’s tough business environment affected the broadcasting industry?
Broadcast is 24 hours. And in 24 hours, we don’t have power; so, we have to find alternative power solutions. We all know what has happened to energy prices in Nigeria. Our exposure to the fundamental cost of just broadcasting, excluding programming being on the airwaves, has quadrupled at the very least in the past couple of months to years. We also have issues around the cost of capital.
  
Unfortunately, Nigeria does not produce sophisticated broadcasting equipment. So, everything that we need for our operations is imported. What has been the policy of the government towards industries dependent on imports for inputs towards the products or services that are produced and sold locally? We don’t get government interventions or subsidies. The reality of the matter is that you have entities like NTA that are enjoying this and competing with private media broadcasters in the private market for advertising revenues. So, it’s unfair competition on the one hand but, on the other hand, who are you to complain because NTA was here before you?
   
So, there are challenges that we need to respond to; we will not be able to do that based on the existing structural systems. We are going to be able to overcome them with innovation, creativity, thinking outside the box, commitment, and the energy of people to be able to drive and overcome the challenges because, at the end of the day, innovation always comes out of repression and new opportunities arise.

Your company recently retired 10 top executives; can you shed more light on this?
We are the only publicly listed media company on the stock exchange, and that means we are also bound by the Securities and Exchange Commission (SEC) rules and the code of corporate governance, which is mandatory for all publicly listed companies. So, that means that our responsibilities to our shareholders transcend personal choices or opinions. It is true that when you look at the existing tenures of management, many of them had started from the very inception of the organisation.

But the code of corporate governance and our internal documents state that we should only do a maximum of two terms of five years. So, their retirement is long overdue.

  
The time is right at this point for us to review where we want to go going forward. For me, and most of the members of our board, the decision comes down to whether we want to continue with our existing strategy or do something differently. And doing something differently means that we have to subject ourselves to abide by the terms and conditions of existing laws and regulations to give the investing public confidence in our organisation and administration and also to be able to attract the kinds of funds and investments that we need to grow and expand beyond our existing programmes.

What can the government do to address the challenges in the industry?
The umbrella body of broadcasters recently had a meeting with the minister of information and national orientation. I believe there has been some level of engagement as to the kind of support the government can give the sector to insulate it against different economic downturns due to the pressures of the naira.

Accessible Bank of Industry loans at single-digit interest rates would be key to stabilising the industry. But beyond what the government can or should do, the focus should be on what we as an organsation can do within the private sector to be able to position ourselves.

Certainly, the financials of the organisation show that shareholder capital has been eroded for many years now. We have serious liquidity issues which have also been flagged and raised in past numbers of annual reports. So, we cannot sweep these issues under the carpet. We have to be able to proactively address them. We may have to look at what kind of solutions are available to us as an entity listed on NGX.

We have to find the right kinds of opportunities that exist for raising capital either through equity or debt. But these are considerations that really gear us forward after we have done the basic restructuring of the organisation and by that, I mean compliance with the best practices of corporate governance and identifying talent with a track record of success to give us the confidence that they can come in and fit in with our new strategy and give us the best shot at success.