Kenya Uses Tourism Tax to Offset Bomas Investors' Debt

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Kenya’s Tourism Levy to Support BICC Development

Kenya has allocated a portion of the over Sh5 billion collected annually from the tourism levy to support private investors in the development of the Bomas International Convention Complex (BICC). This initiative aims to reposition Nairobi as a competitive regional conference hub by partially repaying investors involved in the hospitality and commercial components of the project.

The Tourism Fund has committed at least 4 percent of the annual collections to service long-term repayments for these investors. The tourism levy is set at 2 percent of the gross receipts derived from the monthly sale of food, drinks, accommodation, and other services in regulated hotels, restaurants, and tourism activities.

In June 2025, Bomas of Kenya invited private investors to bid for the construction of two five- and four-star hotels and a shopping mall within the expansive 79-acre complex located on the edge of the Lang’ata area in Nairobi. These projects are part of a public-private partnership programme designed to enhance the region's infrastructure.

Each of the hotels will occupy three acres of land, while the shopping mall will occupy a nine-acre plot. The facilities will be integrated into the BICC, which is expected to cost more than Sh30 billion. The projects are structured on a "plan, design, finance, construct, operate and transfer" basis, with investors required to mobilise capital and operate the facilities.

The Tourism Fund states that the ring-fenced levy revenues will form part of the repayment pool for these investors, improving bankability and attracting financing from pension funds and lenders. Samson Some, chairperson of the Tourism Fund Board of Trustees, explained that this structure allows the sector to quickly mobilise private capital while avoiding delays associated with traditional public funding.

“It’s a market transaction,” he said. “Private investors put in money, and the sector commits a percentage of levy collections annually to repay that investment.”

Tourism levy collections have increased significantly over the years, reaching Sh5.1 billion in the year ended June 2025, up from Sh4.9 billion in the previous year and Sh3.9 billion in the year ended June 2023. This means commitments to investors in BICC will be in the upwards of Sh200 million annually.

Mr. Some highlighted that committing levy collections annually spreads repayment costs over time while delivering infrastructure faster than conventional public financing, which would have delayed the BICC project by up to 15 years due to fiscal constraints and public debt pressures.

Enhancing Kenya’s Conference Infrastructure

Although Kenya remains competitive in wildlife and coastal tourism, the absence of large, purpose-built conference facilities has led to the loss of high-value business travellers, allowing regional competitors like Rwanda to dominate the African conference circuit.

“Kigali has done very well in MICE [meetings, incentives, conferences and exhibitions] and they beat us to it,” Mr. Some noted. “This is not the time for Kenya to compete at a Division Two level. We want to compete at the Premier League level in this region.”

The BICC project aims to close this gap by combining conference infrastructure with supporting hospitality and commercial developments at the Bomas of Kenya site in Nairobi. The project is being implemented in phases, starting with the construction of an 11,000-seater convention centre, which includes an auditorium and a ballroom.

The first phase is being funded by the government through a proposed off-budget loan from the African Export-Import Bank (Afreximbank), estimated at Sh31.5 billion. The government has already paid 10 percent of the project cost to the main contractor, China Road and Bridge Corporation, with the balance to be disbursed in phases.

Construction of the first phase is more than 60 percent complete, with the main convention facility expected to be ready for use by June next year. The second phase focuses on hospitality and commercial developments, including hotels and a shopping mall.

Large international conferences typically drive demand for hotels, transport, restaurants, entertainment, and other services, with the potential to revive Nairobi’s central business district and stimulate activity in surrounding towns.

“If you get MICE right, you revive an entire ecosystem,” Mr. Some said. “Nightlife in Nairobi used to be big. Conferences can bring back that economy, not just in Nairobi, but beyond Nairobi as well.”