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Nairobi chaos chokes top businesses

FINANCIAL STANDARD
By Graham Kajilwa | May 10th 2022 | 4 min read
By Graham Kajilwa | May 10th 2022
FINANCIAL STANDARD
Hilton Hotel in Nairobi's CBD. [Boniface Kendo, Standard]

The impending closure of the Hilton Hotel in Nairobi’s central business district after 53 years had been a long time coming.

As the city grew, the high-end hotel found itself encircled by the chaos that characterises downtown Nairobi.

On one side is the busy Kencom Bus Station, a cacophony of hooting buses, swearing conductors and passersby.  

Across the road next to Kenya National Archives is another bus terminus for matatus plying the Nairobi-Juja route.

And directly opposite the hotel’s main entrance is a public seating area, popularly known as the “jobless corner” where job seekers go to drown their sorrows after a long day of “tarmacking”.

It is also a convenient spot to while away the time as one waits for an appointment.

Hilton Hotel represents many high-end businesses that have fallen victim to the city’s chaotic expansion, which is either forcing them to close shop or move out of the CBD.

One such enterprise is I&M Bank, which recently moved its headquarters from Banda Street in the city centre to the upmarket Parklands area.

The bank’s Chief Executive Maina Kihara said location has a big impact on the success of any business. 

“You want your clients to reach you without a lot of difficulties, hence some of these relocations that you have been seeing,” said Mr Maina.

He said besides the need to escape the city’s chaos, especially traffic and the problem of parking spaces for clients, other businesses might have outgrown their current premises.

“You have quite several corporations setting up new headquarters outside the city. That has also been driven by other considerations,” said Mr Maina. Another high-end hotel, The Intercontinental, recently permanently shut its doors in the wake of the Covid-19 pandemic.

The hotel’s fortunes had, however, been waning over the years due to rising competition from newer establishments, mostly on the outskirts of the city.

The Norfolk Hotel, which reopened a few weeks ago, had been forced to close for 21 months at the height of the Covid-19 pandemic.

But while the Covid-19 pandemic and the challenges of operating from the city have had a hand in the spate of closures or relocation of businesses from the city centre, Mr Mohamed Hersi, a seasoned hotelier and former chairman of Kenya Tourism Federation, said the operating environment has changed for the worse.

These include government red tape, especially where it has a shareholding.

“The hotel business is capital intensive and generating a healthy bottom line is not easy when the cost of doing business is high,” said Mr Hersi on the possible reasons for the closures.

He said if the government could better market the Kenyatta International Conference Centre and improve traffic flow into and out of the central business district, the high-end hotels could have a lifeline.  

But Mr Maina said the changing business environment in the city centre is part of any country’s growth trajectory, although he agrees it could be managed better. 

“This happens in pretty much every city. Eventually, the purpose for which it was built tends to be outgrown, and we then have to solve problems to do with access, size and scale,” he said.

Mr Maina added that the solution is to repurpose the available space.

“We need to make investments to deal with things like access. How do you get a mass transit system to operate through the city?” he posed.

“It is an interesting pattern to watch. I think it also needs to be fuelled by investments, and as banks, we are ready to offer support.”

There has been a raging debate over the last few years if it is time to relocate the capital from Nairobi amid worsening traffic gridlocks and overcrowding in residential areas.

Several countries have relocated their capital cities, among them Tanzania, which in 2019 moved the capital from Dar-es-Salaam to Dodoma and Nigeria, which moved its capital from Lagos to Abuja in 1991. South Africa has three capitals - Pretoria, Bloemfontein and Cape Town. According to the official government website, Cape Town, in the City of Cape Town metropolitan municipality, Western Cape, is the legislative capital and is home to the country’s Parliament.

Bloemfontein, in Mangaung metropolitan municipality, Free State, on the other hand, is the judicial capital and home to the Supreme Court of Appeal. Pretoria, in the City of Tshwane metropolitan municipality, Gauteng, is the administrative capital, and the ultimate capital of the country. It is home to the Union Buildings and a large proportion of the Public Service. 

Nairobi faces population-related problems and cannot provide basic necessities like water and affordable housing to the population as detailed in the Kenya Country Report on Progress in the Implementation of the New Urban Agenda (NUA).

Covid 19 Time Series

 

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