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Economy

Pan-African lender dumps Nairobi for Kampala HQ

Afrexim Bank
The Afrexim Bank has reached a deal with Uganda to locate its regional headquarters in Kampala. FILE PHOTO | NMG 

Ugandan President Yoweri Museveni has reached a deal with the African Export Import Bank (Afreximbank) to locate its Sh3 billion regional headquarters in Kampala, formally ending a three-year long bid to establish its headquarters in Nairobi.

The agreement, to be signed next week, paves the way for the setting up of the multi-billion trade bank office and deals a blow to Kenya as it denies Nairobi the benefits that come with hosting such top international organisations.

“The African Export-Import Bank (Afreximbank) and the Government of Uganda will on Thursday, September 19, 2019, in Kampala, sign the hosting agreement for the Afreximbank East Africa Branch Office, to be located in Kampala,” the agency announced on Wednesday in a statement.

Observers had earlier questioned Kenya’s decision to delay approvals warning that relocating to Kampala or another country meant all potential benefits of hosting such an office, including investment in buildings, rents and employment, would be lost.

Observers also saw the loss of hosting rights to Kampala as a blow to President Uhuru Kenyatta’s efforts to create a regional financial hub in Nairobi.

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The regional trade bank had earlier said Kenya’s reluctance to grant it diplomatic status had forced the agency to woo Kampala for the setting up of the headquarters.

Benedict Oramah, the chairman and president of African Export-Import Bank, had earlier said Nairobi kept it waiting for more than three years for the necessary approvals.

“It took too long to obtain the necessary approvals from Kenya, that is the reason we made the decision to go to Uganda at their invitation,” Dr Oramah had said.

Afrexim, which finances and promotes African trade, has in the past decade become a significant player in Kenya’s economy, having financed big-ticket deals, including national carrier Kenya Airways.

The Treasury had in 2016 indicated that Kenya would finally sign the deal, paving the way for establishment of the regional headquarters in Nairobi. The plans had been in the works for over three years.

But a decision by the Ministry of Foreign Affairs bureaucrats led by then Cabinet Secretary Amina Mohamed to dig in appeared to have scuttled the process.

Foreign Affairs CS Monica Juma was the Principal Secretary in the ministry before rising to the helm of the docket. Ms Mohamed now heads the Sports ministry.

Earlier, suspended Treasury Cabinet Secretary Henry Rotich had said in a letter to Afreximbank that his office had completed a review of the agreement to set up the office and the same had been forwarded to the Foreign Affairs ministry for “finalisation.”

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