The Namibia Press Agency (Nampa) made a comprehensive loss of N$7.7 million during the 2018/19 financial year, auditor general Junias Kandjeke has found.
The information is contained in the agency’s recent audit report for the 2018/19 financial year that was submitted to the National Assembly by information minister Peya Mushelenga a fortnight ago.
Kandjeke in the report said that the agency incurred a net loss of N$7 685 387 during the year ended 31 March 2019.
He goes on, “A material uncertainty exists that may cast a significant doubt on the entity’s ability to continue as a going concern.”
A going concern in the accounting diction refers to a company’s ability to make enough money to avoid bankruptcy.
“The agency is highly depended on government funding, therefore, any significant reduction in the government funding to the agency will significantly affect the agency’s operations, its investments [and] financial obligations,” he said.
During the period in question, Nampa’s subsidy from government was slashed from N$22 million to N$15 million, the report shows.
Furthermore, the report shows that Nampa’s total assets value stood at N$94.3 million in 2018 while in 2019, the value was N$81.6 million.
On the revenue generation front, the report shows that the agency made N$3.7 million in subscription news in 2018. The same amount was generated in 2019.
From information technology (IT) income, Nampa made N$91 855 and N$80 336 in 2019 and 2018 respectively.
As far as audio-visual andpublication income, the state-owned agency generated N$188 795 [in 2019] and N$93 457 [in 2018], the report shows.
Responding to questions, Nampa CEO Linus Chata said the N$7.7 million loss did not come as a surprise because Nampa received a reduced government subsidy of about the same amount in the year in question.
Chata further lamented Nampa’s classification as a non-commercial entity as a major stumbling block on its revenue generation prospects.
“For example, our clientele base is strictly limited to a few newspapers and radio stations in the country who are in turn not obligated to subscribe to our offerings,” he said.
More so, the advent of the Covid-19, which has brought the global economy on its knees, did not spare Nampa and the agency had to revise its strategic focus by streamlining and redefining its offerings, he added.
From property rentals, Nampa made N$2.3 million in 2019 and N$2.3 million in 2018.
The entity has also deployed an array of cost-cutting measures by scaling down its expenses and freezing some positions.
“But these measures can only be stretched up to some point. Beyond a certain point the scaling down strategy ceases to be effective. It actually becomes counterproductive,” Chata said.
He added that the agency is unable to capitalise on some new projects.
Meanwhile, Nampa paid N$9.3 million in subscription fees and editorial pay costs in 2018 and N$9.4 million the following year.
IT trading – maintenance cost the entity N$307 479 in 2018 and N$73 592 in 2019.
During the period under review, in 2018, Nampa spent N$504 184 in board fees. The following year, 2019, it spent N$432 683.
On other board-related fees, the entity spent N$63 902 in 2018.