Why Western Kenya's Largest Shopping Mall Isn't Making Money

By Ogova Ondego
Published January 26, 2024

It is January 6, the first Saturday in 2024, when I decide to visit Lake Basin Mall that is touted as being the largest mixed retail shopping mall in the western Kenya region.

Since I have plenty of time before my meeting with a friend at the mall that is located at Lower Kanyakwar area at the junction of the Kakamega-Kisumu Highway, Mamboleo Estate and Northern Bypass at 1:00 PM, I choose to walk to the mall at 11:00 AM to tour the place that I have heard so much about but haven’t yet visited.

I reach the place, only 3.5 kilometres away from Kisumu City Centre, 90 minutes ahead of the planned meeting and embark on my own self-guided journalistic tour of the mall that sits on expansive 8-acre parcel of land. The guards at the premises are not just friendly but also helpful. They aren’t inquisitive. They aren’t suspicious. They aren’t invasive. I walk though the cavernous 335-car parking area on the ground floor, climb the staircase and use the elevator, look for hotels and recreational areas and take photos on my phone. No one demands to know who I am or why I am taking photos.

Nothing excites me more than walking in the recreational park on the ground floor. Next to it are an amphitheatre for public address and performances, a children’s play section, a bio-digester for recycling water, a solar energy station to power the mall, a car tyre service centre, a trade show/exhibition room, a secure perimeter wall and CCTV cameras for security around the clock.

Despite its boasting almost fantastic amenities, I wonder why the five-floor Lake Basin Mall that was conceived by Lake Basin Development Authority (LBDA) in the 1980s, took off in 2013, was completed in 2016 and opened for business in 2019 seems, six years later, vacant. I don’t see many open shops and offices save for 43-room, 3-star Best Western Hotel, Kenya Revenue Authority and a handful salon and barber shops that are operating on this first Saturday of the year.

I learn that Lake Basin Mall, that was projected to create 500 direct jobs and raise Sh220 Million annually from rent, is yet to recover from the blow it received when Tusky’s Supermarket that was to have been the Anchor Tenant who could have attracted interest and driven traffic to the mall, withdrew its intention amid financial difficulties that eventually snuffed life out of it. Lake Basin Mall was left with zero business in its 60,000 square feet of Anchor Tenant’s space.

Though tenancy for retailers at Lake Basin Mall goes for a modest Sh40-Sh80 per square foot depending on the size and location compared to the Sh80-Sh150 per square foot charged by most malls in Kisumu, that doesn’t seem a good enough reason to attract tenants; some of the current occupiers of western Kenya’s biggest shopping mall are mainly public agencies like KRA, Kenya Roads Board and Communications Authority of Kenya.

But there could be much more to why businesses avoid Lake Basin Mall that was to have been constructed under the so-called Public Private Partnership laws where the bidder was required to finance the mall and then recoup their investment through proceeds from the business but Erdemann Properties, the Chinese contractors, were charged in court with not providing any financing but entering a financial arrangement with Cooperative Bank from whom they borrowedSh2.5 Billion and irregularly charged the mall. The prosecution accused the contractor of conspiring with the board of directors and management of LBDA to inflate the cost of construction by Sh1.6 Million to Sh4.2 Billion (Sh4,138,895,104.89 to be precise). According to LBDA, the delay in paying the contractor and the lender increased the final cost of construction.