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Ministry fails to account for Eurobond cash

Tuesday October 27 2015

Finance Cabinet Secretary Henry Rotich appearing before the National Assembly Committee on Finance at Parliament in Nairobi on October 27, 2015.

Finance Cabinet Secretary Henry Rotich appearing before the National Assembly Committee on Finance at Parliament in Nairobi on October 27, 2015. PHOTO | EVANS HABIL | NATION MEDIA GROUP 

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Officials at the Ministry Devolution and Planning Tuesday said they could not point to any specific project on which they spent nearly Sh45 billion from the Eurobond.

The department of planning was allocated the second largest share of money after infrastructure.

Tuesday, a top official at the Devolution Ministry, who asked not to be named because he has no authority to comment, said that it was impossible to identify any project on which the money was used.

“The ministry gets a lump-sum amount from the Exchequer at the beginning of every financial year to support its recurrent and development expenditure. It is not possible to pinpoint which projects were funded by the various sources of government revenue, whether from the locally generated revenue or from the Direct Foreign Investment,” the official said.

At the time the bond was floated, the Government said the money was to pay off an expensive commercial loan and finance big infrastructure projects in railways and energy.

The Devolution Ministry, headed by Ms Anne Waiguru, has become the poster child of corruption and waste after it was discovered that Sh791 million meant for the National Youth Service had been stolen.


On Sunday, National Treasury Cabinet Secretary Henry Rotich circulated a statement to the media giving a breakdown of how the Sh250 billion Eurobond money was distributed among ministries to fund various projects.

He dismissed claims by Cord leader Raila Odinga that the money had been used by individuals close to State House to trade.

Mr Rotich explained that out of the Sh250 billion, 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 ongoing,” he said.

Ministries and state departments which benefited from the cash include the State Department of Infrastructure (Sh64 billion), Ministry of Energy and Petroleum (Sh21 billion), State department of Water and Irrigation (Sh15 billion), State Department of Planning (Sh44 billion) and State Department of Agriculture (Sh14 billion).

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

The Controller of Budget last week told Parliament that the proceeds of the bond were kept in an offshore account to which she had no access.

Mr Rotich said: “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.”

Mr Rotich could not, however, be drawn into giving a breakdown of the projects which benefited from the funds and how much was spent on each project, raising fears that the government could have channelled the funds to other uses.