1. HON. DOMINIQUE AZIMBE AZUMAH
THE JOINT COMMITTEE ON LOCAL GOVERNMENT AND RURAL DEVELOPMENT AND
COMMUNICATION
OFFICE OF PARLIAMENT
PARLIAMENT HOUSE
ACCRA
Hon. Chairman to the Committee,
RE: AMA RESPONSE TO AAG AND AGI PETITION AGAINST INCREMENT IN
ADVERTISING RATES BY ACCRA METROPOLITAN ASSEMBLY
The Accra Metropolitan Assembly (AMA) engaged in a modernisation campaign of its services to
citizens and city planning. The initiative coined “A better Accra for a better Ghana” are in line with
the objectives of the national development plans and are enhanced by the selection of Accra by the
Millennium City Initiative.
As part of this modernisation campaign, the concession for advertising space in the city had to be
reviewed under two (2) major development area:
a- The modernisation of revenue generation from the city
Modern cities generate a large part of their revenues from the “sale” of their visual space. Indeed,
over the years, competition between industrial and telecom companies has increased the value
corporations are willing to pay to be noticed by their potential customers. Cities offer prime visual
space and all large cities have a concession rights and concession rates in place to reflect the value
of their visual space. The revenues from these concessions enable cities to provide more and higher
qualities services to its citizens, whether individuals or corporate.
Accra's advertising rate until 2009 did not come to reflect accurately the value advertisers are
willing to pay for being seen in the city. We note the Advertising Association of Ghana (AAG)
claim that AMA new advertising rates are in line with those of cities such as Lagos, Johannesburg,
Nairobi or Cairo. We are doubting this claim as our information from official sources is very
different. We expect that onus to be on them to provide us with official documentation to back their
claim.
b- The modernisation of the city's landscape and planning
A recent survey conducted by the World Bank raised our awareness on the high level of
dissatisfaction amongst Accra citizens for the quality of life in the city. City planning and city
maintenance came high on the list of the items they would like to see improving over the next
planning years. This prompts us to take measures that, in priority, serves the citizen of Accra and
improve their level of satisfaction.
Over and beyond the collection of revenues, cities have used Private Public Partnership (PPP) co-
operations to provide better services to its citizens. This is even more relevant in our environment
where the revenues of the authorities are limited and the needs of the people are great.
Besides, a city landscape needs to be managed to provide a visibly attractive and save environment
for the citizen.

2. At the moment, there are no form of PPP which enhance the value of the advertising space for the
citizen of our city. In fact, the visual pollution created by the outrageous overuse of the visual space
of the city is appalling. The current unchecked advertising space means that our visual landscape is
slowly redefined by the colours of competing brands rather than by city's natural and architectural
beauties. Some of the traffic junctions boosts up to 12 billboards; on some of the streets, the central
island hosts advertising on lamppost and light-boxes while the sideways host billboards and the
trees are branded with flags and other form of advertising spaces.
The safety of the citizens is also at risk. A large number of the outdoor advertising infrastructure
does not match internationally acceptable standards for safety with regards to wind conditions and
other weather and crash risks. It is also unclear for us which structures are insured in case of
problem. Earlier this year, during a heavy rainfall, 2 of the giant billboards crashed on the street.
This event prompted us to consider very carefully the security aspect of those structures and to
develop rules and regulations to protect our citizens.
2- Citizen-centred Private Public Partnerships
Currently, the advertising spaces provided do not offer needed and planned public infrastructures.
It is our goal to engage with interested parties in PPP agreements similar to those signed in other
cities in Africa concerning city furniture such as bus shelters, bins, maps and information boards,
streetlights, etc.
We are especially looking forward to establish this kind of partnerships with the Ghanaian
companies currently in the advertising sector. We are however rather disappointed to see that their
reaction, through the actions of the AAG leads them to fight the battle against progress instead of
embracing the changes as an opportunity to structure their business model for better operational
profits and services for their own clients.
It is time for the advertising space to be better managed, either by the advertising companies
themselves or, by obligation, by the AMA. The overwhelming amount of space exploited in the city
means that the price of advertising rendered cheaper by the simple offer and demand economic rule.
By self regulating the availability of the space, the advertising companies could increase their prices
to advertisers per spot. This would also enable them to decrease their maintenance costs and to
invest in better and safer infrastructure.
For the advertisers too, the advantages are numerous. None the least to actually increase the value
of their brand by being profiled in a more exclusive fashion. Indeed, there is little value for an
advertiser of its advertising space is surrounded by an overwhelming amount of other advertising
spaces for other brands (often competitors).
What we suggest here is not for the advertisers to spend more money on advertising but to buy less
spaces, rented at a premium, which provide more value. There will be no impact on the cost of
marketing, thereby no impact on the cost of the products to the citizen of our country. The impact
will be positive on the value created by marketing spending. Besides, we would like to point out
here that the advertising industry in Ghana is a very profitable one featuring growth rates of around
300% over the past 4 years according to OMD, a leading media and advertising firm.
Instead of thinking along those progressive lines, the AAG's approach has been to antagonise their
relations with the AMA. Indeed, they accuse our team lead by our budget officer to have

3. antagonised them during our last meeting but their false claims and unfunded reports do not
contribute to a win-win negotiation ground and is, indeed, antagonising:
a- The advertising rates in other cities:
In its letter, the AAG compares the rate of large cities in Africa to the new rates of Ghana, which is
not the case. We thereby invite them to provide us with supporting official documents to justify this
claim
b- The cost analysis of billboards
The table provided in their letter includes incorrect information:
− The cost indicators are heavily overstated
− The number of billboard faces is not indicated nor reflected in the analysis conducted, e.g. 2, 3
or even 6 faces in some cases, and hence giving false cost allocations.
− The depreciation amount includes operational costs while only the infrastructure cost should be
included in the depreciation value.
− After the cost break down, the depreciation is then added to the total costs, incurring double
counting.
− Rental charges to advertisers are highly understated in this table
c- The percentage based comparison of past and present situation
The advertising rates in Accra have been left unchanged and not indexed to the value of advertising
space for several years, creating a backlog in rate increases. A similar situation was found by our
government concerning that tariff of road tolls. In the case of the road tolls, the final increase was of
1000% while it does not mean that increase was not representative of the service provided to the
road users.
In such cases, a percentage based comparison of past and present situation is not relevant because
the past price was so much out of line compared to the reality.
d- Analysis of rate increment
The 2010 rates indicated in this table 2 are not correct according to our latest rates published in the
Local Government Bulletin published 23 April 2010. For instance, an Unipole of 108m2 in in Zone
A1 is rated at 14,040 GHS per annum and not 42120 GHS as published in the table 2. All other
prices are also overstated.
Further, the AMA has implemented a zoning system for the tariffication of the advertising space. In
its table 2 the AAG takes only the price for the highest priced zone to compare them to the past rate,
thereby trying to make their point more dramatic than it actually is.
As a conclusion, we have tried to engage with the AAG but national progress and the well-being of
the citizens at large cannot be stalled by the interest of a few parties who have taken advantage of
information asymmetries so far and are unwilling to embrace change and negotiate on realistic
terms.
3- Rational behind the Local Government Bulletin published 23 April 2010
Fairness was AMA’s guiding principle for fixing the 2010 fees. While seeking to achieve the

4. regulatory and revenue objectives, any fees charged must have an objective and justifiable basis
rather than being arbitrary. In addition, the fee structure should capture all objects that are within the
scope of regulation and leave little room for discretionary charges.
a- Fees per Square Meter
Previous years fee fixing has been based on consultation and advice from Advertising Association
of Ghana (AAG). Recent consultations on this identified anomalies with the previous year’s fee
structure and the new 2010 fees aim to correct these anomalies. One example of these anomalies is:
Structure Type (Billboard) 16 Sheet 40 Sheet 96 Sheet Unipole
Size of Advertisement Area
6 16 36 110
(Sq Meters per Face)
2009 Fee – Cat A-1 (GHc) 1000 1000 1500 5200
Fee Per Square Meter 166.67 62.50 41.67 47.27
This shows that small structures have been charged a higher fee per square meter than larger
structures. The effect of this is that AMA has been encouraging larger structures in contradiction to
AMA preference for smaller structures that are less of a nuisance. On the other hand structure
owners get a higher value from their customers for larger structures while paying AMA a lower
amount than they do for smaller structures i.e. the higher the value to the structure owner, the lower
the value to AMA.
As experts in their field, Advertising Association of Ghana (AAG) should have recognised this
anomaly and highlighted it to AMA. While assuming that AAG has been acting in good faith and
may not have noted this anomaly, it is rather unfortunate that its members have been the
beneficiaries at AMA’s expense. Nevertheless AAG should be aware of the risk that it may be seen
as putting its members interest ahead of AMA’s interest in a situation where there is a conflict of
interest.
As a result AMA needed to correct the anomaly in the fees by standardising on a square meter based
fee that contributes to regulating the size of structures through paying more for bigger sizes. This is
in line with internationally accepted business practice in the industry.
16 sheet billboard structure owners, including AAG members, have in the past years accepted and
paid the fees for these structures. As a result AMA considered this as a fair fee for determining the
minimum per square meter fee for advertisement area. In the interest of fairness, AMA applied a
further 22% reduction to the 16 sheet fee to GHc 130 per square meter for 2010 while bringing the
other structures in line with this minimum fee. By so doing, AMA will be aligning its fee structure
with its preference for having smaller structures. The control of these smaller structures is also
achieved through specific differential fees based on type of structure.
b- Fees per Location
An option of identifying location categories and charging fees per location regardless of size was

5. considered and rejected because this option would not help to regulate the sizes. However the
exposure values of different locations was recognised in previous fee fixing through defining
different location categories. The proposed 2010 fees has expanded this zoning to apply to all
structure types with differential fees for different structure types and sizes by location.
4- The future of the advertising concessions in Accra
In the coming year and under the guidance and advice of the Millennium Cities Initiative we expect
to build sustainable and winning PPP for all involved, and most of all for our citizen and the
advancement of the nation.
This project includes the regulation of the use of the visual space in the city as advertising space and
the setting of standards and planning for outdoor advertising infrastructures and city furniture.
With that, we hope that those changes will host more co-operative interaction of the AAG and even
that the players in the outdoors industry will show a willingness to self regulated before AMA finds
itself compelled to regulated their activities.