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Africa Business News of Wednesday, 12 May 2021

Source: businessdailyafrica.com

Kenya splashes Sh1bn on London envoy office

Kenya is set to spend Sh1 billion on its new London embassy in the year starting July as the country races to stop paying rent in Western capitals, underlining the taxpayers’ burden of running the foreign missions.

Budget estimates tabled in Parliament show that the Treasury has allocated Sh1 billion to purchase the property that will replace the dilapidated embassy that has seen taxpayers lease space to accommodate the diplomatic missions.

The London embassy and those in New York (UN), Canada, Washington, Russia, Australia, Geneva, Japan, China, South Korea and the Los Angeles consulate have been cited as being in deplorable state and in need of an uplift.

Foreign Affairs Principal Secretary Macharia Kamau last year told Parliament that most of the government-owned properties in missions abroad are old having been acquired in the early years of Kenya’s Independence.

Analysts, however, said while economic diplomacy, spearheaded through such property acquisitions, is key to entrenching Kenya’s global presence, the planned purchase cannot be termed a priority.

The concerns were, however, downplayed by Ministry officials, who have insisted that Kenya has an image to keep in global circles and this comes at a cost.

The ministry recently announced a shift from renting to purchase of property in a bid to cut the rental costs that average Sh3 billion a year.

Diplomats in London and New York have been forced to rent homes and offices as residences built by taxpayers fall apart due to neglect.

Auditor-General reports paint the sorry state of affairs in the country’s foreign missions and singled out the Kenyan Embassy in Washington DC, New York and London — which are the most prestigious diplomatic missions.

This has forced diplomats to rent homes in some of the world’s pricey cities, upping the missions’ leasing costs.

The cost of renting space for Kenya’s embassy in London remains un-disclosed but the city’s leasing costs are some of the most expensive in the world.

Knight Frank’s Global Cities report showed that London had the most expensive office space per square feet after Tokyo, New York and Hong Kong.

Plans to purchase the space have in the past been shot down in Parliament through rejection of proposals to allocate funds.

Parliament last year denied the ministry Sh250 million meant for renovation of the ageing chancery in New York and the High Commission in London, forcing the ministry to keep renting space.

Purchase of the chancery building in London will be the second in two years after the acquisition of office block and residence for the Kenyan ambassador in Switzerland in a multi-billion shilling deal.

The cost of renting offices and residences for diplomats in the three months to September last year rose by Sh409.6 million compared to similar period last year, revealing the burden on taxpayers to lease space in some of the world’s most expensive cities.

The Controller of Budget (CoB) report for the period to September shows that taxpayers paid Sh662.82 million rent for consulates and diplomats compared to Sh253.2 million in the three months to September 2019.

The rise underlines the increasing burden of renting space for Kenya’s diplomats amid perennial cuts in funding meant to construct the offices and residences.

The report did not disclose the reasons that drove the rise in rental costs for the country’s diplomats and consulates in cities like Geneva, Washington DC and New York.

The increase comes at a time the ministry of Foreign Affairs has requested Parliament an annual allocation of Sh5 billion to buy the offices and residences.

In September, PS Kamau told Parliament that the ministry plans to purchase properties over a 15-year period, saying it will cut the rental expenditure that stands at Sh3 billion annually.

Inadequate and uncertain funding due to budget cuts has made it hard to plan for acquisition, replacement and maintenance of properties with the ministry pushing for ring-fencing of the funds to avoid the hitches.