Rotich: How we used bond money

A huge chunk of the proceeds from a Sh250 billion Eurobond was used to fund infrastructure in government departments, National Treasury Henry Rotich has said.

Mr Rotich dismissed claims by Cord leader Raila Odinga that the money was traded by individuals close to State House.

Out of the Sh250 billion, Mr Rotich said, Sh196.92 billion was used to finance infrastructure projects in various government ministries, departments and agencies.

Another Sh53.2 billion deposited in an offshore account was used to pay a syndicated loan.

“In regard to the funding of infrastructure, the total exchequer releases to ministries/departments/agencies was Sh196.2 billion, the available resources from the sovereign bond. Some of the projects are complete while others are on-going,” he said.

In what has not been clear to many, the government floated a bond of Sh66 billion ($750 million) following the success of the first bond, which amounted to Sh250 billion in total.

“The international financial markets responded very positively, reflecting stronger investor confidence in how the Kenyan economy is being managed. Based on this strong response and the low interest rates on the sovereign bond, we subsequently returned to the international market and tapped an additional US$750 million (Sh66 billion at the exchange rate of Sh88 to the dollar),” Mr Rotich said in a statement on the Eurobond issued in June last year.

WELL UTILISED

Mr Rotich said the money had been put to good use, arguing even the Auditor-General had not raised any questions on accountability after balancing the books.

“The balance of actual net proceeds from the sovereign bond is correctly reflected in the off-shore account and in the Central Bank of Kenya Special Account,” he said.

Mr Rotich spoke just a day after Mr Odinga claimed the money had been used by well-connected individuals to trade in foreign stocks from which they made a whopping Sh34 billion in profits.

Mr Odinga said TNA and URP, which form the Jubilee coalition, are on a looting spree.

“The URP wing is on scandals such as land and kickbacks for contracts. TNA is more sophisticated. It goes for things such as the Eurobonds, with which they traded in international stocks to make Sh34 billion,” he said.

Controller of Budget Agnes Odhiambo has also questioned how the proceeds were used.

She said Sh53.2 billion deposited in an offshore account had been used to pay a loan without her approval.

However, Mr Rotich said Ms Odhiambo was aware of government plans to pay the loan from its own resources until it became clear that the Eurobond would succeed.

By paying from the offshore account, said Mr Rotich, Kenya saved Sh1.2 billion, which would have been lost through conversion from dollars to shillings and then back to dollars.