The Treasury is seeking more than Sh180 million in new budget to lease new office space starting July, its budgetary proposal documents show, despite rising concerns over the growing cost of hiring government accommodation.
The funding request for the financial year 2025-26 comprises Sh79 million for new offices to decongest the National Treasury Building and Sh100 million for additional spaces acquired by the Financial Reporting Centre (FRC) to accommodate increased workers.
The Treasury further says the Institute of Certified Investment and Financial Analysts also has a Sh3 million hole in its annual budget for rent for the financial year 2025-26.
Treasury officials told lawmakers the additional funding requests are part of priority expenditures under President William Ruto’s Bottom-Up Economic Transformation Agenda and government policies.
“The National Treasury has acquired an additional office space to relieve congestion at the National Treasury Building. Process of signing a lease agreement is ongoing,” wrote Principal Secretary Chris Kiptoo in a report to the National Assembly.
The FRC says it faces a shortfall of Sh100 million annual rental costs because “new spaces have been added to the previously leased premises”.
The anti-money laundering agency has until the end of the current year in June to update Kenya’s anti-money laundering and countering financing of terrorism to help remove the country from the grey list.
The burden of the additional cost of leasing offices for the government continues to pile on taxpayers even after the Treasury pledged to prioritise construction or purchase of new offices over rent in the future.
The commitment was in response to growing concerns amongst taxpayers over the climbing cost of accommodating government offices in high-end commercial locations.
State ministries, departments, and agencies are largely housed in prime locations such as Nairobi’s central business district, Westlands, Community/Upper Hill, Hurlingham, Kilimani, and Milimani — areas which the Housing ministry has listed as ideal for government offices.
“(The government will) consider a one-stop shop for all government agencies. The Public Administration and International Relations sector has prioritised the construction of offices as opposed to hiring, including foreign missions,” the Treasury wrote in the draft 2025 Budget Policy Statement.
The government spends nearly Sh6 billion on hiring offices every year. Past data, for example, showed the cost of rent for buildings leased by the State rose to Sh5.9 billion for the year ended June 2018 from Sh5.4 billion a year earlier.
The Foreign Affairs ministry accounts for the largest share of the expenditure on rent for leasing offices and homes for Kenya’s envoys abroad.
The ministry has in recent years been leaning towards the construction and purchase of spaces for the missions abroad as opposed to leasing.
For instance, Kenya is completing the purchase of a chancery in London for Sh2.67 billion to ease the cost of the lease which was upwards of 350,000 pounds (about Sh56 million) a year.
Other countries where Kenya is either building or buying property for its envoys include New Delhi at Sh2 billion, Stockholm (Sh1.6 billion), Geneva (Sh1.3 billion) and Juba (Sh1.5 billion), Berlin (Sh1 billion), Kigali (Sh750 million), Bujumbura (Sh500 million), Mogadishu (Sh350 million) and Pretoria (Sh50 million).
