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British Journal of Arts and Social Sciences
ISSN: 2046-9578, Vol
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2013
http://www
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co
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aspx

Recapitalising the Mass Media Industry in Nigeria:
The Implication for National Development

Toyosi Olugbenga Samson Owolabi
University Of Strathclyde, Glasgow
United Kingdom
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Owolabi@Strath
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Uk
Phone: +447721410367
Dr
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O-Neill@Strath
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Uk
Phone: +44 1225 388216

Abstract
The media in Nigeria operate in a very unfriendly economic clime that heightens the cost of
production yet reducing the people‟s purchasing power
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These usually leave many publications
struggling for survival and in chronic situation premature death becomes inevitable
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This paper therefore theoretically identified the causes of
high mortality rate; examined the challenges underfunding pose to media growth and ways of
safeguarding the future of Nigerian media
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KEY WORDS: Recapitalisation, Mass Media, National Development

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Introduction
Mass media, according to Igben (20006:46) are believed to be central to the over-all
development of the society
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Without the media which, according to Okunna (2000:32),maintain
constant flow of vital information for economic progress, national development is bound to be
stagnated or at best be retarded
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To policy makers and entrepreneurs, information and knowledge are the basic ingredients
they need to respond to opportunities and challenges in their economic domain
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A classic example was the Action Group led
government in the old Western Region
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The Western Nigeria Broadcasting Corporation which he established in 1958
became the arrowhead of the media techniques used not only to propagate these programs but
also to mobilise support for them
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Evolution and Development of the Mass Media in Nigeria
The Nigerian mass media have been described as a product of nationalist struggle
(Oso, et al 2011:2)
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Tador (1996:40) however classifies the
development of the Nigerian media into three phases as follows: The early press (18001920); Nationalist press (1929-1960); and contemporary press (1960-till date)
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These
are the era of Missionary journalism (1846-1863), the era of alien-dominated press (18631914), the emergence of indigenous press (1914-1960) and the new era (1960-till date
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A deeper look at what happened towards the latter part of the 19th century reveals that the
missionaries actually played significant roles in the evolution of the media, particularly in
Nigeria
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Henry Townsend who established the first newspaper, Iwe Irohinin 1859 at
Abeokuta
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Other factors that later contributed to the evolution and growth of the
press in Nigeria include the increased literacy level and the later consciousness of some
African intellectuals whose awakened interests in social, political and economic matters
fuelled a renewed zeal to contribute to national discourse through the mass media
(Sobowale,1985:30)
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Apart from the greater popularisation of newspaper industry, as
well as the take-off of stronger and more vibrant media with increased nationalists‟
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consciousness, the period also signified the advent of broadcast media in Nigeria
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However, its monopoly was broken in
1959 when the Western Nigeria Broadcasting Corporation commenced its commercial
television and radio broadcasts in Ibadan (Akinfeleye, 2011:56)
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With
the creation of 12 states out of the three post-independent regions, licences were issued to the
new states to establish radio and television stations
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Ibrahim Babangida
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The Nigerian press is 55years older than the amalgamated Nigeria (1914) and it is
101years older than the independent Nigeria (1960)
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Over the years, the media industry has witnessed tremendous progress in terms of
expansion, coverage, technology, personnel and managerial capability
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The print media are
also circulating at electronic speed through the satellite and computer-aided technologies thus
making the entire world a global village
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It is also
worthy of note the spread of media houses due to improved literacy level, political awareness
and perceived economic advantage of the media business which gave birth to more outfits
across the six geo-political zones of Nigeria
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Tracing back the history of printing and printing technology and especially, the
pioneer newspapers in various parts of the world, one can equivocally say that the mass media
have come of age
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The present economic state of the traditional
media industry in the world is appalling
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The State
of the News Media (2009) reports indicates the consistent drop in newspaper circulation as a
result of year 2008 economic meltdown that affected most developed economy of the world
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The
Detroit Free Press and New York Times, two foremost news media in the USA have been
badly affected by the harsh economic reality of the time to the point of limiting home delivery
service to thrice a week, and closing down some of their key subsidiaries respectively
(Lendon, 2008; Pena, 2009; Sanders-Ware, 2009)
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In France, the situation is so bad that the
government of Nicholas Sarkozy decided to channel financial aids to some affected
newspapers (Chrisafis, 2009)
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57 percent drop within one year (World press Trend, 2008)
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In Africa and in particular Nigeria, the harsh reality of economic meltdown
has changed the outlook of the media industry dramatically sign posting high debt profile,
downsizing, retrenchment, drop in circulation and extreme cases, closing operations
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In spite of
the unhealthy circumstance under which they operate, the modern media parade an array of
sophisticated information and telecommunication technologies that facilitate quick
information gathering, processing and dissemination
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According to Okoro, (2006:7) the latest equipment in newspaper technology include
colour print rotary machine for printing newspaper, colour print Heidelberg machine for
printing magazines, McCain automatic saddle stitchers for trimming, counting, binding and
wrapping of copies
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Nigeria is a place where you cannot run a business
by depending solely on public electricity supplies
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This is apart from office accommodations and delivery vehicles
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This is where recapitalisation comes in
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Would-be investor may
approach bank, turn to capital market, buying into existing press or seek joint venture with
other interested investors
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This is because banks are not always willing to advance
credit to a business such as the media that takes long period of sound management to
breakeven and most importantly, with risks attached
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The most feasible option as far as Nigeria is concerned is the capital market
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While answering this question, Robert Estabrook cited by
Hulteng, (1979:2) says “to get a chance to perform whatever functions they want to perform
in the society, mass media enterprises must first establish itself as viable ventures, able to stay
afloat economically
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”Omu (1976:16) also observed that for media industry to carry out its expected roles of
informing, educating, entertaining, surveillance and contributing to the general socioeconomic development of a nation, it must first build strong resistance to economic adversity
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Conceptual Clarifications
Recapitalisation: According to the Central Bank annual report (2006: 19),
recapitalisation is the changing of the capital structure of a company to make it financially
viable
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The CBN evolved this policy between 2004 when the then 89 banks operating in
Nigeria were plagued by low capital base and were becoming a threat to the economy
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When the exercise was concluded on
December 31, 2005 only 25banks emerged out of 89 that existed before the exercise
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For example, 20 of the 25 banks were in the top 100
banks in Africa while 17 0f the 25 were in the top 1000 in the world
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Recapitalisation of companies through the stock market has been internationally
recognised as very efficient and most viable instrument to shore-up an organisational capital
base
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Since January 2012, about a year after the exercise, the Greek Banks capital base has soared
by almost 35% while that of Coca Cola Bottling Company also rose by 12% (Reuter,
February 20)
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As at the close of transactions in December
2011, the outcome has been highly applauded by the nation‟s Central Bank Governor as the
affected banks almost quadrupled their capital base from GH445
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65billion within 3years
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In 1990 the company was placed
on receivership and in 1991, it was delisted
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The same
experience was replicated in the case of PBL Media, an Australia media group that owns
stakes in nine broadcast networks and ACP Magazines
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These media outfits have been able to source
sufficient cash flow to trade through the adverse economic situation and placed them in
vantage positions to withstand recession without compromising their social responsibilities to
the society
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Going by the outcome of the recapitalisation processes identified above,
recapitalisation can lead to the stabilisation of an organisation resulting from larger capital
base, increase in the number of shareholders, stimulating employment generation, job security
and staff commitment to duties, financial capacity to meet the demands of new business and
general contributions to the economic growth and social development of the affected nation
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This assumption has been
faulted on ground of simplicity (Habte1983; Hamelink 1983; Mabogunje 2006)
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Against this background, Onimode (2005:13) cited by Salawu
(2006:5) viewed development as:
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ISSN: 2046-9578

“Human Development Index as popularised by the UNDP, its Sustainable
Human Development (SHI); people-centred development through people’s
empowerment; popular participation and putting the people first, bottomup development from the grassroots and environmental accounting”
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Theoretical Framework
This paper will be housed under the normative press theories enunciated by Sierbert et
al (1963) and McQuail (1987)
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Basically, these theories assume
that a free media must be socially responsible by participating actively in development
activities of the state
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They include:
1
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Media Right Agenda
3
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International Press Centre
Findings
A total of 51 newspapers were established between 1880 and 1937, a period of
57years
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Except
15provincial weeklies, all these newspapers were established in Lagos
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Also, between 1937 and 1960, a period of 23years, 39 newspapers were established,
only Tribune (1
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Others were defunct
Between 1960 and 2008, a period of 38 years, 168newspapers and 48magazines were
established
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5%) and 15magazines (31%) are still operating
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6%)
respectively could be regarded as having national outlook
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Out of the 13 newspapers and four magazines with national outlook,
only 6 (46%) and 2 (20%) are self-sustaining, others are struggling to stay afloat
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Discussion
Findings revealed that the life span of most newspapers is between two and nine years,
indicating there is high mortality rate in the industry
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The reasons advanced for this
include underfunding, ownership pattern and control, unfavourable economic condition,
government interference, high cost of production materials (Azegbeni (2006:10)
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Apart from loss of investment on the part of the owners,
there are always human casualties resulting from any failed media
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Concord Group of
Newspapers alone accounted for about 2000(Media Right Monitor 2004:4)
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The
sacred watchdog role, for which the media is highly respected, can easily be compromised
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The media can raise fund from the bank or turn
to the capital market to raise fund from prospective investors
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As such, the second
option is most feasible
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It ceded out 40% of its shareholding in the conglomerate to the public through the
stock market and injected the fund realised into it
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The success story of ANL perhaps, was all that
Daar Communication, the owner of African Independent Television and Radio needs to
shore-up the company‟s capital base through stock market
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Other means have also been identified whereby beleaguered industry like the media
could be funded
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A medium-sized
press can also acquire smaller ones while foreign technical partners can also be sought
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 The government must provide an enabling environment for businesses including
media to thrive
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 The government must relax it policies on multiple taxation for the media industry
while it also exempts them from paying import duties on production equipment,
spare parts and raw materials
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The reason for this can be explained within the context of job
insecurity and unattractive welfare package due to economic problem
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This is not a good credential for an institution expected to contribute to national
development
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Essentials of Modern African Journalism, Lagos: Malthouse
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Central Bank of Nigeria (2006) Banking Supervision Annual Report
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Mabogunje, A
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Enduring News Values and the New Media Landscape” New Media Society12 (6)
911-928: Sagepublication

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