Nairobi News


City Hall to surrender prime property to settle massive debt

City Hall is considering relinquishing some of its prime assets to offset some of its debts as the county government continues grappling with ballooning arrears.

According to the county’s official documents, negotiations have already commenced with Local Authorities Pension Trust (Laptrust), one of the statutory creditors owed by the county government, to transfer one of its prime estate to settle the outstanding debts. City Hall owes Laptrust more than Sh10.9 billion.

The county’s debt as at December, 2018 stood at Sh70.2 billion having risen by a whopping Sh13.7 billion since Governor Mike Sonko came into office in August, 2017.


“To settle this amount owed to Laptrust the County in the past has negotiated with the statutory creditor for a property swop to transfer to the scheme one of our prime asset/estate in respect to accrued debts,” reads the County’s Medium Term Debt Management Strategy for 2019/2020 financial year.

In 2013, the county transferred Mariakani Estate, valued at Sh1.45 billion at the time, to retirement benefits scheme Local Authorities Provident Fund (LAPFUND) in a swap deal to offset a non-remittance of deductions from workers’ salaries which had accumulated to the tune of Sh2.1 billion.

The county has also negotiated a debt swap with the National Social Security Fund (NSSF) to offset outstanding debt against property rates owed by the social services fund.

The county owns several property in Nairobi, including Jeevanjee Bachelors quarters, Old Ngara estate, New Ngara estate, Kariokor and Buruburu estate, among others.


City Hall’s overall debt consists of statutory debt, money owed to suppliers of goods and services, legal creditors, personnel emoluments, loans and contingent liabilities.

Unpaid statutory deductions stands at Sh30.13 billion, unpaid suppliers and contractors and litigations is Sh10.63 billion, utilities of Sh0.64 billion owed to Kenya Power, benefits owed to retired and deceased staff at Sh0.13 billion and a KCB loan of Sh3.02 billion.

The latest developments are part of measures to be adopted by City Hall to manage its ever-growing debt burden.