Book firms face hard times as war on cartels proceeds

More than 2,000 booksellers and suppliers in Kenya are struggling to stay afloat as top publishers shed marketing and editorial staff to survive the effects of the government’s war on textbook cartels.

The Sunday Nation has established that since January last year when the government started buying directly from publishers, bookshops and other retail outlets across the country have laid off staff, scaled down operations, switched to other businesses or closed down altogether after they were effectively locked out of the lucrative free education textbooks business.

“It has been tough. For 15 years, we had grown exponentially as an industry, thanks to the free schooling cash. Now, we are only selling to parents and private schools. And what we are getting is a drop in the ocean compared to the billions we collected from schools,” said a bookseller in Meru who asked not to be named.

Just over a month ago, one of the leading publishers in the country, Oxford University Press (OUP), sent home half its marketing staff and a third of its editorial staff, citing shrinking business.

REFORMS

The marketers, most of whom were involved in promoting textbooks in public schools, were rendered redundant as they no longer had market influence after the government’s decision to stop sending textbook cash to schools.

“They could no longer be retained as the government now decides which books to buy. The editors were also released as there isn’t much editorial work going on. Even new books for the new competence-based curriculum are only being produced for only one class each year,” said a manager at the multinational publishing firm.

Analysts say OUP’s move signals a bleak future for the industry, considering that smaller publishers, who did not have even a single book bought under the government’s central procurement programme, were definitely hit harder.

Trouble for the publishing industry started in November 2017 when then-Education Cabinet Secretary Fred Matiang’i announced that the government would do away with its book-buying system, started in 2003 during the Kibaki administration, in which public schools received money from the government to buy textbooks from publishers.

CORRUPTION

Back then, schools were not allowed to buy directly from publishers.

The arrangement was that publishers would concentrate on producing and marketing books as booksellers stocked and serviced orders made by schools.

The publishers would set the selling price and the booksellers would sell the copies and get a trade discount of up to 35 percent of the selling price of each copy sold and paid for.

This created a multibillion-shilling value chain that, according to Dr Matiang’i, was sabotaged by cartels comprising booksellers and rogue head teachers. Billions of shillings were stolen through book purchase deals that never were.

The radical decision was informed by a study carried out in 2016 by the Kenya Publishers Association indicating that more than Sh10 billion shillings was lost to teachers and unscrupulous booksellers every year.

FEW BOOKS

The racket, said Kenya Publishers Association chairman Lawrence Njagi, saw booksellers claiming payment for books that were never delivered.

“The government, for instance, released Sh14 billion to schools in 2016, but publishers could account for only Sh4 billion. The rest was stolen by booksellers and school managers,” Mr Njagi said in an interview this week.

Attempts on Friday to get a comment from the chairperson of the Kenya Booksellers and Stationers Association (KBSA) were unfruitful as our calls and text messages went unanswered.

Publishers say the cartels had for years sabotaged the government’s vision of attaining the universally desirable book-to-pupils ratio of 1:1.

The ministry back then kept on complaining that more than 12 pupils were sharing one textbook in public schools, yet the government pumped billions of shillings into the textbooks scheme every year.

“I don’t think my conscience will allow me to continue seeing the kind of theft going on in the textbook racketeering in the public school system. We will fight it with everything we have,” Dr Matiang’i vowed back then.

COST

And he cracked the whip in January last year, decreeing that no money was to be sent to public schools for buying books.

Instead, the Ministry of Education, through the Kenya Institute of Curriculum Development, would buy books directly from publishers.

Under the new system, launched by President Uhuru Kenyatta early last year, the publishers were first invited to submit books for the ministry to evaluate, buy the ones it would deem suitable for schools and supply them to all public schools across the country.

The selection of books for Standard Seven and Eight as well as for secondary schools last year, which formed the first batch, was done based more on the prices quoted by the publishers. This saw publishers who had quoted high prices locked out.

Those whose titles were selected received payment from the Kenya Institute of Curriculum Development (KICD) alongside lists of schools and quantities to be supplied. Many booksellers at first thought the government was bluffing.

RESOLUTE

When they were actually bypassed in the first procurement, some were still optimistic the government would soften its stance, especially after Dr Matiang’i was moved to the Interior docket.

However, even after Ms Amina Mohamed took over as Education CS, the directive stayed.

When it happened again at the beginning of this year, many gave up all hope of ever going back to the good days when they pocketed up to 35 percent of every sale.

“I closed my bookshop two months ago when I realised the government was not going back on its word.

"I had hoped to make something by selling secondary school set books to parents and students, but the ministry issued a circular ordering public schools not to ask parents to buy set books,” said Samuel, a supplier in Ruai on the south-eastern outskirts of Nairobi.

The Sunday Nation established that the ministry's directive indicating that the government would buy set books for schools may have led to the emergence of piracy.

PIRACY

In most schools, there were claims that some of the copies the students or teachers bought for use pending supplies from the government either had missing pages or looked as if they were poor photocopies of the original texts.

“I asked a student to read a page of one of the set books and we discovered that the page was missing, yet the book was new,” said Mr John Okello, who teaches English and literature at a public school in Nairobi.

Kenya Publishers Association chief executive James Odhiambo, while maintaining that the central procurement of books successfully eliminated copyright theft, admits — albeit hesitantly — that pirates could be creeping back to cash in on the confusion created by the government’s delay in buying set books.

“The government promised to buy set books for public secondary schools, but it is yet to do so. That is perhaps why the piracy networks are coming back to cash in on the high demand,” Mr Odhiambo said.

PRINT RUN

He said set book publishers could be hesitant to print in bulk as they do not know when or whether the government will honour its word and buy directly from publishers.

“We do not even know how many copies the government will buy, so we have to wait in order to make a print run that caters for the numbers the government wishes to buy and an extra number that we are sure we can sell to private schools and in the open market,” said a publisher who requested not to be named, saying the matter is too sensitive to be discussed openly.

Mr Edward Sigei, the executive director of the Kenya Copyright Board, however, rules out the possibility that piracy is creeping back.

“All the books that the government buys have a logo that no one can fake. Besides, towards the end of 2017, the piracy networks, which used to take away 30 percent of the publishers’ business, lost so massively that no one would dare come back.

"Some had printed so many pirated books not knowing a special code would be introduced that one could send to a number displayed on each book to ascertain whether it is genuine. Unless there are residual copies from that time, I doubt anyone is pirating school books anymore,” said Mr Sigei in a phone interview.

QUALITYOF BOOKS

But while Matiang’i’s antidote has been praised widely for cutting the cost of books for public schools and saving the government more than Sh10 billion every year, money that was previously gobbled up by cartels, teachers have been complaining that quality has been the biggest casualty.

“The old system was better as far as quality is concerned. Marketers from various publishing companies would come to the staffroom and display their books. Then the subject teachers would evaluate the books and, since they know what is good for their learners, they would advise the head teacher to buy what was helpful to the learners based on their needs,” said Consolata Wawira, an English teacher in Embu county.

Ms Wawira added that, while there is a need to ward off cartels and lower the costs, teachers should have more say in the procurement of books for the sake of quality.

“On the positive side, we have no shortage of books. Actually, in some cases we have got more books than we need, but some are of poor quality. They may be cheaper, but many seem to have been published in a hurry,” she added.

NEW CURRICULUM

A source at KICD, who did not want to be named as she was not authorised to speak to the media, conceded that there may have been quality issues in the first direct procurement.

“The problem was that we focused too much on bringing down the cost and forgot all about quality. However, this problem will now be solved as we rollout the new competence-based curriculum.

"We have already bought books for Early Childhood Development (ECD) from Grade One to Three and they are of a high quality. We also noticed some publishers were quoting ridiculously low prices to hoodwink the government into buying their books,” she said.

The fact that the government buys only a few titles every year — between 15 and 35 — each of the books are printed in bulk and distributed to schools, meaning that more than 150 registered publishers in the country have been left chasing a massively whittled-down amount of business.

Compared with the days when money was sent to schools and the publishers competed in the open market, industry sources say the publishers’ business has shrunk by hundreds of millions.

This has seen some diversify their operations by looking for business in Tanzania, Uganda, Rwanda, Malawi and Zambia.

As for whether the layoffs at Oxford University Press are the shape of things to come in the industry, or whether new Education Cabinet Secretary George Magoha will come up with measures to reverse the downward trend in the industry, the jury is still out.