Kenyatta International Convention Centre has been the leading regional hub for MICE events, amidst increasing competition from other East African States like Rwanda and Tanzania.
However, the iconic building and conference facility has been listed among 10 other state-run entities that will be handed over to private operators, in the planned state privatisation programme.
This is despite the auditor general flagging issues over ownership of a part of the property.
While President William Ruto has maintained that privatisation will increase the amount of revenue generated, previous history of privatisation in the country has left Kenyans wary.
Between 2003 and 2008, only six companies went under privatisation, that is KenGen, Telkom Kenya, Kenya Railways Corporation, Mumias Sugar Company, Safaricom and Kenya Re-Insurance Corporation.
Some of these have further sunk into liabilities and have been returned to state control or are yet to get their operations running.
Only Safaricom and KenGen have stood out to be successful, paying dividends to the government.
The President in a recent interview valued KICC at Sh30 billion, even as 2022 records from the Auditor General place the asset at Sh6.25 billion.
The facility recorded a turnover of Sh1 billion and made Sh37.39 million in net profit in the 2022 fiscal year.
In 2023, the revenue raised by the state corporation for the last financial year included Sh516.3 million realised between January and June 2023 and the Sh440.9 million collected between July and December 2022.
The President has however pointed out that this is below the facility’s potential and maintains that it should be generating at least Sh3 billion annually.
“The financials disclose a property, plant, and equipment balance of Sh5.04 billion. Within this balance, there is land valued at Sh2,296,000,000, excluding the land commonly known as the COMESA parking area and Courtyard, which houses the monument dedicated to the first Kenya president,” reads a report by the Auditor General.
Nancy Gathungu in the report says that the balance includes work in progress of Sh1.1 billion during the review period, which has been inactive and out of which Sh365.6 million was recurrent expenditures misclassified under assets.
The auditor however raises an issue with the parastatal's financials as the accuracy and ownership of the property, plant and equipment balance of Sh2.3 billion could not be confirmed.
She has also flagged numerous financial irregularities that saw firms undertake state tenders without being issued with an award letter.
Minutes of the tender committee, contract documents, local purchase orders/local service orders, supervision reports and completion certificates for tender awards for goods and services rendered were not provided for audit verification.
“Currently, claims amounting to Sh701 million for different works have not been paid due to lack of or inadequate documentation,” added Gathungu.
From its inception, KICC was not only meant to be a conference centre, but also designed to be a symbol of unity, progress, and global connectivity.
Kenya's economy has been a great beneficiary of the Meetings, Incentives, Conferences and Exhibitions (MICE) industry.
The country’s Gross Domestic Product benefited 8.8 per cent in 2019 from the tourist industry, which includes MICE, according to data from the Kenya National Bureau of Statistics.
In addition, the MICE industry expanded by 5.5 per cent in 2019, bringing in Sh115 billion (or almost $1.05 billion).
The market for travel for business purposes, or MICE, was estimated to be worth $876.42 billion (Sh137 trillion) globally in 2022.
From 2023 to 2030, it is projected to increase at a compound annual growth rate of 7.5 percent.
The State is pushing to make the facility more viable for modern-day conferencing needs.
Pollmans Tours & Safaris Group Director of Operations Mohammed Hersi, who is also a seasoned hotelier, says KICC hasn't been able to sort itself out for the longest period.
He noted that should a credible partner come on board, there is no reason why it should not be privatised.
"We support the plan because a vibrant MICE destination within the CBD is good for business. All governments around the world are privatising their conference facilities and Kenya should do the same provided it is done openly and transparently," Hersi told the Star.
KICC recently hosted the Africa Climate Summit, which drew in over 12,000 regional and international delegates, several heads of state, and other dignitaries.
It has also in the past hosted several other high-profile conventions, personalities, signature events and even signed treaties and made declarations.
According to the tourism ministry, Kenya can compete in the global MICE marketplace, with KICC among the venues that can drive global conventions.
The destination has a range of multi-purpose flexible meeting facilities (venues)up to international standards and accommodation catering to different standards and price brackets.
Its proposed sale comes amid renovations in anticipation of an increase in the number of meetings.
“Kenya aims to leverage its distinctive attributes to maintain a substantial portion of the market share in the industry. Improved destination management, with the assistance of KICC, which has been entrusted with the responsibility, can facilitate the achievement of this goal,” the Tourism Ministry said in a statement.
In the half-year to June, business and MICE were the second primary purposes of visiting Kenya by international tourists after holiday, which acounted for 338,509 visitors.
During the period under review, 226,908 visitors were in the country for meetings, conferences, and business deals, data by the Tourism Research Institute indicates.