Treasury happy with approval from Ouko on Eurobond

Wednesday March 18 2020

Treasury Principal Secretary Kamau Thugge addresses a ministerial event at KICC on September 13, 2018. The ministry has been vindicated by the office of the Auditor-General concerning Eurobond appropriation. PHOTO | FILE | NATION MEDIA GROUP


The Treasury has responded to the special report on the Eurobond, which saw Auditor-General Edward Ouko clear the loan but raised a fresh scandal.

Treasury Principal Secretary Kamau Thugge told the Nation that he was happy that Mr Ouko had vindicated their position on the Eurobond billions.

But on the revelation that Kenya spent a whopping Sh725 billion outside the government’s expenditure platform — the Integrated Financial Management System (IFMIS) — the Treasury said the expenditure had already been audited and cleared by the same auditor in the past so it is a “non-issue”.

“Are you suggesting that because some ministries were not on IFMIS so the auditor-general could not audit them? That is plainly incorrect. He audits all those institutions every year, so the Ifmis issue is a non-issue,” Mr Thugge said.

He added that the bigger story for the country was that “no Eurobond money went missing as had been alleged”.



The Nation broke the story this week on the findings of the special audit on the loan whose expenditure puzzle has remained a battle ground between the government and its auditor.

The report revealed just why Kenyans may never know what exactly the 2014 loan did after six ministries that received part of the billions spent the money outside the IFMIS system.

The system is a government expenditure platform that was expected to bring transparency and stop leakages in expenditure.

In his report, Mr Ouko confirmed that indeed all the Sh280 billion borrowed was received after paying off a syndicated loan of Sh53.2billion and other transaction fees.

But the money “came into one pot” and was mixed with the rest of government money, which was sent to various ministries as approved in the budget.


However, the audit noted that utilisation of the proceeds of the Eurobond could not be traced to specific development projects.

According to Mr Ouko, the Treasury explained that the funds were fungible, went into one pot — the National Exchequer Accounts at the Central Bank of Kenya and therefore not identifiable to any particular infrastructure project.

This is where his audit went cold. His 13-page report has now been dispatched to Parliament. The report said that by mixing the money with other funds and sending it in bulk to ministries, which expended it outside IFMIS, made it impossible for his team to track every coin to its final usage. The report is dated April 2019.