Sh250bn Eurobond well-used, auditors say

Thursday March 14 2019

National Treasury Cabinet Secretary Henry Rotich. An audit report has indicated that his ministry made legal decisions regarding Eurobond money. PHOTO | FILE | NATION MEDIA GROUP


The National Treasury has said the Sh250 billion raised from Eurobond in 2014 was appropriately used.

An audit report by PKF Kenya presented to the National Assembly on Thursday cleared the air over the expenditure of the sovereign bond.

The report, which was commissioned by National Treasury ministry, says evidence shows that the money raised abroad was eventually directed into Consolidated Fund, contrary to claims by the Opposition, civil society and financial experts.

"There is sufficient evidence that all the proceeds of the sovereign bond were either eventually received into the Consolidated Fund or paid out for authorised purposes," the report says, adding that the ministry headed by Mr Henry Rotich sought legal opinion from the Office of the Attorney-General before the audit was carried out.

Auditor General Edward Ouko is yet to complete and present his findings on the matter.

The Public Accounts Committee (Pac) chaired by Ugunja MP Opiyo Wandayi is preparing to assess the PKF Kenya report and update the House.


The appropriation of the proceeds generated a lot of political heat in the years 2014 and 2015 after Opposition leader Raila Odinga claimed that part of the money ended up in the pockets of some individuals.

But the report says every action was done legally. "The National Treasury obtained the authority of the Controller of Budget in line with the provisions of the Constitution, and therefore met the requirements."

The reports adds that though Sh53.2 billion was paid directly from the offshore account towards settlement of a government loan, the Treasury had obtained the Controller of Budget's authority to do so. But Mr Ouko in 2015 said he was not able to establish the claim.

The auditors further said the loan repayment was done directly from a receiving account in JP Morgan Chase Bank in New York, USA, rather than from the Consolidated Fund as stipulated in the Public Finance Management Act.

But even as PKF Kenya approved the expenditure, Mr Ouko had said that there was insufficient evidence during the lapse of the 2015 financial year for him to give an opinion on the issue.

Mr Ouko had drawn the attention of the country to the fact that the Eurobond proceeds were deposited in a special Eurobond Bank account at the Central Bank of Kenya, and not directly into the Consolidated Fund as required by law.