The Nairobi County government is in a race to avoid an impending auction. The town hall has since launched plans to conduct a liquidation sale of its idle assets, including land and office furniture, on an overdue Ksh 4.4 billion loan from a financial institution.
Apart from auctioning off its assets, the town hall is also considering introducing a new tax on some of the services offered to Nairobi residents to raise funds to offset the debt, a move that is likely to cause an outcry.
This latest decision follows a High Court ruling allowing a leading local bank to seize and auction its property on a delinquent loan valued at Ksh 4.4 billion.
An image of buildings in Nairobi’s Central Business District (CBD).
File
Land targeted includes unused land in various areas of the city as well as older apartments. The plan also aims to root out the land grabbers and cartels that run the show in the nation’s capital.
According to Nairobi Finance and Economic Planning CEC Allan Igambi, the town hall is also considering creating a special type of levy for the specific purpose of clearing debt.
This strategy is contained in the Nairobi County Medium Term Debt Management Strategy Paper for the financial year ending June 30, 2023. The Action Plan to Prevent Auction was also adopted in the purpose of reducing the county’s bloated debts.
“This document recommends that we hold an auction for all obsolete and unused assets and furniture and that the proceeds realized be used to reduce the outstanding amount of the loan,” the document states.
It further states, “Also recommends that a source of our revenue, tax collection, be earmarked for the repayment of this loan. The County Treasury will come up with terms on how best to implement this.”
According to the county, the sale of land and furniture are the only fruits at hand for the decentralized unit to raise funds to pay off its debt, in a short period of time.
However, this is not the first time that the town hall has been forced to sell some of its main assets due to debt. In 2013, the county transferred its estate of Mariakani to the local authority pension fund to clear a Ksh 2 billion debt.
The old estate at South B has 30 blocks of eight apartments and sits on 10.1 acres.
The county led by Governor Anne Kananu is now seeking a similar deal to avoid losing its assets.
The financial institution is seeking to seize Nairobi County assets following High Court Judge Chacah Mwita’s January verdict on continued non-payment of the loan.
The lender went to court in 2020 to seek repayment of the loan and the judge said there was no dispute that the parties agreed to arbitration, chose the arbitrator unique and had proceeded before him.
Nairobi County Governor Anne Kananu in her office (undated)
Courtesy
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