The Office of Auditor General has shocked Kenyans by saying no records on public debt
The AG Ms Nancy Gathungu’s report says it’s impossible to tell the current value of Kenya’s public debt
Observes that the cost of domestic borrowing has surpassed foreign borrowing
Kenya Auditor General Nancy Gathungu has shocked the economists after saying there is no financial statement to show the debt position.
Her report says it’s impossible to tell the current value of Kenya’s public debt.
“The status of the country’s public debt is only included as an annexure in the Consolidated Fund Statement of expenditure,” the auditor said. “It is not possible to ascertain the amount redeemed and current value, and therefore the validity of the public debt expenditure” Says Nancy
The Auditor, in the shocking revelations, further noted that no one knows how much loans and overdrafts are held by other national and county governments.
Report further reveals the heavy borrowing by President William Ruto’s administration, being Sh. 488.1 billion from the end of December 2022.
Mrs. Gathungu cited obligations guaranteed by the national government such as the loans on Kenya Airways (Sh88.3 billion), KenGen (Sh24.5 billion), Kenya Power (Sh9.9 billion), Kenya Ports Authority (Sh33.5 billion) that were not reported in the year under review
Treasury reported that as of March 30, 2023, the Gross Public Debt was estimated at Sh9.634 trillion (66 percent of GDP). As of December 2022, the public debt was Sh9.146 billion.
Auditor Nancy also observed that the cost of domestic debt has become more expensive than the cost of external borrowing.
The Auditor, further, raised concerns, is still spending colossal amounts in commitment fees for loans procured before projects are ready.
It emerged that the government spent Sh680 million in the first half of the current financial year on commitment fees.
On many occasions, there has been a mismatch between the data by the National Treasury and its agencies including the Central Bank of Kenya [CBK].
This means that budget estimates contain unauthorized domestic debts and payments for undisbursed external debts.
This puts the CS Njuguna Ndung’u -led Treasury on the spot, add to the litany of questions about the actual figure of the country’s public debt.