Audit flags Sh466.5m valuation loss on Central Bank of Kenya property
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Kenya's Auditor-General has found that buildings and land bought by the Central Bank of Kenya were valued below their acquisition and construction cost, pointing to a Sh466.5 million loss on the bank's investment properties.
The Central Bank of Kenya (CBK) risks a loss of Sh466.5 million on its investment properties after an audit valued the assets lower than what the monetary authority paid for them. Revelations made by the Auditor-General's office show buildings and two parcels of land purchased by the bank last year were valued lower than their construction cost and purchase price by an independent consultant.
Buildings constructed at a cost of Sh2.25 billion in January 2025 were valued at Sh1.84 billion by external valuers barely 18 months after completion, meaning the project's value depreciated by Sh410.9 million between January 23, 2025 and the end of June 2026.
Two parcels of land acquired by the bank in January 2025 at a cost of Sh145 million were valued at Sh104.3 million, indicating a valuation loss of Sh40.6 million. Two perimeter walls constructed at a cost of Sh45.3 million and handed over in July 2025 and May 2026 were valued at Sh30.2 million, a decline of Sh15 million, with one of the perimeter walls losing millions in value less than a month after completion.
"The decline in value for the recently acquired assets raises doubt regarding the reasonableness of the original acquisition cost of these assets," said the Auditor-General. "In the circumstances, the Bank may not have obtained value for money in the acquisition of these assets."
In Kenya, land and property has in the past 20 years proved to be one of the most valuable asset classes, with value continuing to appreciate across all cities and major towns, making the valuer's decision to reduce the value of CBK's assets notable. The apex bank did not address the reasons for the decline in the assets' value when contacted by Business Daily, only stating that it followed due process when investing in the properties.
CBK said all assets acquired through purchase or construction strictly followed the requirements of the Public Procurement and Assets Disposal Act (PPADA), 2015, including engaging the Ministry of Lands, Public Works, Housing and Urban Development. Dr Thugge did not disclose the buildings whose value was reviewed downwards nor the location of the two parcels cited by the Auditor-General and where the perimeter walls were constructed. The apex bank, however, highlighted the acquisition of land in Meru for the construction of a planned CBK Centre premises and the fencing of the proposed CBK Nakuru Branch as some of its recent achievements.