In a striking revelation to the National Assembly Departmental Committee on Regional Development, Lake Victoria Development Authority’s (LBDA) Managing Director, CPA Wycliffe Ochiaga, unveiled the daunting fiscal challenge the authority faces. The LBDA is grappling with a staggering Sh. 2.5 billion loan taken from Cooperative Bank to construct the monumental Lake Basin Mall in Kisumu City—a financial burden that has ballooned to a hefty Sh. 4.5 billion due to accruing interest and penalties.
Initiated on August 7, 2013, the construction of the mall, a landmark project and one of the largest of its kind in Western Kenya, reached completion and was inaugurated on April 19, 2016. Despite its potential, the occupancy rate hovers at a mere 30%, severely impeding the LBDA’s ability to service the loan, which was disbursed in stages between 2013 and 2015.
Ochiaga detailed the efforts to mitigate this financial strain, noting that negotiations with the bank had successfully paused the accrual of further interest and penalties on the loan. Yet, a critical barrier remains—the incomplete section of the Kisumu-Kakamega Road leading to the mall’s main entrance, which has significantly deterred potential tenants.
The sprawling complex, originally projected to rake in over Sh. 100 million annually and provide substantial employment opportunities, is now urgently seeking a major tenant to anchor its commercial promise. At present, only a handful of government entities, including the Kenya Revenue Authority (KRA) and Communication Authority of Kenya (CAK), occupy about 30% of the available space.
During a recent visit, the Vice Chair of the parliamentary committee, Mary Wamaua, pressed the LBDA management to ramp up marketing efforts for the mall. She advocated for innovative strategies to boost its appeal, such as reducing rental rates to attract more tenants, thereby maximizing its revenue potential and serving the community more effectively.
Wamaua further proposed targeting essential government services like the Huduma Center to establish branches within the mall, enhancing foot traffic and making the mall a bustling hub for both shopping and essential services. This strategy aims not only to elevate the mall’s profile but also to transform it into a pivotal community resource, benefitting the populace at large with its extensive offerings.
Kisumu City News
