By BRIAN NGUGI, Business Daily

The African Export-Import Bank (Afreximbank) is expected to inform the government of its decision to move its planned regional headquarters from Nairobi after the Ministry of Foreign Affairs rejected some key demands by the bank, including diplomatic immunity for its top executives.

The ministry on Friday said it had reviewed a draft agreement with the bank to have the Sh3 billion headquarters set up in Nairobi.

“We expect to sign a deal soon and there is no stalemate. We have sent them the documents and we expect them to sign soon,” said Foreign Affairs Principal Secretary Monicah Juma in an interview.

But sources at the bank said the ministry had rejected some of the critical demands by the bank.

“The Kenyan Ministry of Foreign Affairs (MOFA) has responded but deleted a number of key requirements such as diplomatic immunity for the president of Afreximbank. As of now the MOFA has not given the bank what the bank asked for. The gap between MOFA and the Bank is so wide. From the response of MOFA it is clear they do not want Kenya to host Branch of Afreximbank,” said a senior person at the bank.

“A letter will soon follow communicating our decision to relocate the branch to another eastern African country barring a change in the ministry’s position,” the source, who sought anonymity, said in an email interview.

Afreximbank has in the past indicated it would move to Addis Ababa, Ethiopia if Kenya did not act on its demands by the end of September.

Ethiopia is said to have agreed to grant the bank’s top executives diplomatic immunity.

The bank said in September it had waited for two years for communication from Kenya’s Foreign Affairs ministry but had yet to receive any response.

Besides diplomatic immunity, the multilateral lender wanted its employees exempted from paying tax in line with the privileges accorded other multilateral institutions.

Afreximbank had argued that the privileges were not unique to Kenya as they had been granted by host governments in Abuja (Nigeria), Harare (Zimbabwe), Abidjan (Cote d’Ivoire), Tunis (Tunisia) and Egypt (Cairo).

The bank’s demand for special privileges was supported by the fact that similar multilateral institutions and diplomatic missions in Nairobi enjoy the same.

The Foreign Affairs ministry was said to be particularly uncomfortable with several clauses in a draft agreement touching on taxation.

Treasury secretary Henry Rotich had said in a letter to Afreximbank that he had completed a review of the agreement and the same had been forwarded to the Foreign Affairs ministry for finalization.

Read more: Foreign Affairs set to scuttle Afreximbank Kenya head office bid

Source: Business daily Africa