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Typo saw 8.6 billion shillings allocation for non-existent government loan


Economy

Typo saw 8.6 billion shillings allocation for non-existent government loan


Ukur Yatani, Cabinet Secretary of the Ministry of National Treasury and Planning. PHOTO | FRANCIS NDERITU | NMG

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Summary

  • The first quarterly economic and budget review reported that the Treasury had paid 8.6 billion shillings in interest to the UK, bringing total bilateral debt service to 41 billion shillings.
  • The entry came despite Kenya clearing direct loans owed to its former colonial master, the UK, in June 2020 after transferring 35.3million shillings to London and incurring no new debt. of Great Britain.
  • In June last year, for the first time since independence, Kenya authorized direct loans owed to the UK, its former colonial master who recently changed the way it lends to developing countries.

A typo by the National Treasury inflated the amount of bilateral debt after 8.6 billion shillings was included in the repayment of a non-existent UK loan.

The first quarterly economic and budget review reported that the Treasury had paid 8.6 billion shillings in interest to the UK, bringing total bilateral debt service to 41 billion shillings.

The entry came despite Kenya clearing direct loans owed to its former colonial master, the UK, in June 2020 after transferring 35.3million shillings to London and incurring no new debt. of Great Britain.

Officials said this was a typo and the figure was believed to be under interest payments on Eurobonds for 10- and 30-year bonds borrowed in 2018, raising questions about the accuracy of treasury data.

This rekindled the infamous typo that could have added an additional 9.2 billion shillings to a supplementary budget presented to Parliament in 2009 by Uhuru Kenyatta when he was finance minister.

“It’s a misclassification of debt service on the table, it’s supposed to be a Eurobond payment, not UK debt,” said a source at the Treasury who declined to be named.

The Treasury has since removed the Quarterly Economic and Budget Review from its website after Daily business questioned the entry showing the country had paid 8.6 billion shillings to the UK.

In June last year, for the first time since independence, Kenya authorized direct loans owed to the UK, its former colonial master who recently changed the way it lends to developing countries.

Treasury data shows Kenya has no debt to Britain in June compared to a debt of 35 million shillings in May and 1.4 billion shillings in 2015.

The decline in UK direct lending came about when the country chose to offer funds to agencies such as the Department for International Development (DFID) and the World Bank for subsequent loans to developing countries like Kenya. .

The easing of the UK’s direct debt to Kenya comes as countries like China have increased their lending to African countries. Beijing has also used the debt to exert geopolitical influence.

DFID – renamed Foreign, Commonwealth and Development Office – and its investment institution CDC channeled loans directly to private sector companies such as Athi River Mining, Brookside Dairy, Equity Bank, Garden City and M-Kopa Solar.

The 8.6 billion shillings entry came at a time when the Auditor General launched a comprehensive assessment of Kenya’s public debt to determine the accuracy of the National Treasury’s records of loans of 7.7 trillion shillings.

Ms. Nancy Gathungu says her office finalized the June 2020 audit and began to conduct the next round of annual audits in October.

She told the Senate Finance Committee that her office was conducting a full performance audit specifically on public debt servicing activities.

This is to check whether transactions are recorded accurately and completely and whether debt repayment is made on time in order to avoid penalties.

The June 2020 investigation revealed a discrepancy of 30 billion shillings in treasury figures in government bonds, bills and bank statements.

In 2009, Mr. Kenyatta faced a storm after it emerged that a typo had added an additional 9.2 billion shillings to a supplementary budget.

Mr Kenyatta, as finance minister, said there was no intention on the part of the treasury to defraud taxpayers, calling the mistake that affected 200 posts of oblivion.

Next, Speaker of Parliament Kenneth Marende asked the House finance committee to investigate the matter.

Anti-corruption activists have said many Kenyan officials are corrupt and sometimes inflate numbers buried in unfathomable lists of numbers. The state denied the accusation.

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