Nation Media Group CEO Stephen Gitagama To Resign, As Well As 80 Percent Of Board

The Nation Media Group (NMG) is set for a significant leadership shakeup after Stephen Gitagama, the Chief Executive Officer (CEO) of East Africa’s largest media house, is set to leave the helm at the end of July 2024.

As first reported by TechCabal, NMG’s chief financial officer, Richard Tobiko, will become the interim CEO until a substantive replacement is found for Gitagama.

The unexpected announcement also comes with revelations, as learnt by Viral Tea, that 80 percent of the board is also set to leave.

In a message to employees, Gitagama, who served as CEO for seven years, revealed on Friday, July 19 that “My tenure as CEO at NMG will come to an end by August 1. I’m leaving behind a very strong team, and with the dedication you have, I believe you will go far.”

Outgoing Nation Media Group CEO, Stephen Gitagama (left) and chief financial officer Richard Tobiko (right). /NATION MEDIA GROUP

NMG board chair Wilfred Kiboro revealed at the same meeting that the 80 percent are also set to leave at the end of 2024.

Thiss leaves questions regarding the future directions of the company, which has been embarking on a restructuring between May and June, including a layoff process that affected more than 16 employees, the fifth time this has happened following Gitagama's assumption of the role from CEO Joe Muganda.

Nation Media Group did not immediately respond to requests for comments regarding these developments. While Gitagama did not disclose the reason for his exit, insiders revealed that the board was not pleased with the pace of the media house's digital transformation, with the company turning to its digital publications amidst declining newspaper circulation and ad revenue.

“The print business is a dying product. With a change of mindset to think digital first is very important,” Kiboro said.

“We are going to form a new company which is wholly digital. We have to think differently from what we have been doing before.”

In October 2023, NMG issued a profit warning, anticipating a more than 25 per cent decline in full-year profits for the year ending December 2023.

A notice issued by Company Secretary Angela Namwakira on Wednesday, October 25 revealed that a tough business environment has impacted the company, thus its warning to its shareholders, investors, and the general public that it would record depressed earnings, the second such warning in 10 years.

Namwakira attributed this to a struggling media business in Kenya adversely impacted by headwinds mainly attributable to the relentless increases in prices of basic commodities, a drastic rise in fuel prices, runaway depreciation of the Kenya Shilling, rising interest rates and higher taxes.

On August 18 of that year, NMG recorded a 98.8 per cent decline in net profit from Ksh247.8 million in the 2021/2022 financial year to Ksh2.9 million in 2022/2023, with the regional media house blaming this on the drastic rise in the cost of imported raw materials, particularly newsprint, and the depreciation of the Kenya Shilling against the US Dollar.

This, coupled with a mass resignation of board members as well as an unstable workforce including mass layoffs has sparked a wave of uncertainty within the company. 

However, it is the large-scale exodus at the top echelon of the company, a rare event, which is likely to expose potential underlying issues within the organisation’s governance.

This upheaval has sent shockwaves through the media industry, with many speculating on the future direction of NMG.