Treasury defends Sh54bn payment

National Treasury Principal Secretary Dr Kamau Thugge. PHOTO | DIANA NGILA   NATION MEDIA GROUP

In Summary

• However, she cites a big discrepancy, pointing out that actual expenditure on foreign debt for the period was Sh94 billion, representing a difference of Sh54 billion from what she approved.
• The Treasury PS Kamau Thugge, Friday moved quickly to downplay the Controller of Budget’s report, saying that the payment in question related to a loan of $600 million (Sh54 billion) which Kenya borrowed from a syndicate of international banks.

By NATION REPORTER
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The Controller of Budget, Ms Agnes Odhiambo, has questioned the circumstances under which Sh54 billion was withdrawn from the Central Bank without her approval.

The huge transaction mirrors deals made during the infamous Goldenberg scandal.

In a report released yesterday, Ms Odhiambo said the amount, which was repatriated out of the country as debt payment was made directly from the government’s overdraft facility at the Central Bank.

The total exchequer releases for foreign debt service in the period under review amounted to Sh36 billion consisting of Sh21.9 billion for principal payments and Sh18 billion for interest payments, she said.

SPECIAL AUDIT

However, she cites a big discrepancy, pointing out that actual expenditure on foreign debt for the period was Sh94 billion, representing a difference of Sh54 billion from what she approved.

“It is recommended that a special audit be undertaken by the Auditor-General to establish this transaction”, said Ms Odhiambo.

The Treasury PS Kamau Thugge, Friday moved quickly to downplay the Controller of Budget’s report, saying that the payment in question related to a loan of $600 million (Sh54 billion) which Kenya borrowed from a syndicate of international banks.

He said that the loan was paid from the proceeds of the $2 billion Euro Bond, which was at that time deposited in a government off shore account in New York.

According to Dr Thugge, the government had to make a choice between paying the syndicated loan directly from Central Bank’s account in New York and therefore save on foreign exchange losses and importing the money into the local exchequer account before being released by the Controller of Budget.

RECONCILIATION

We are well aware that no money can be spent without the authority of the Controller of Budget, said Dr Thugge, noting that the case is just a reconciliation problem.

He added that the matter has since been resolved between the Treasury and the Office of the Auditor-General.