× Business BUSINESS MOTORING SHIPPING & LOGISTICS DR PESA FINANCIAL STANDARD Digital News Videos Health & Science Lifestyle Opinion Education Columnists Moi Cabinets Arts & Culture Fact Check Podcasts E-Paper Lifestyle & Entertainment Nairobian Entertainment Eve Woman Travelog TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified Jobs Games Crosswords Sudoku The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS
×

State’s spending of Covid loans queried

NEWS
By Frankline Sunday | August 6th 2021

The government has overshot its borrowing target. [Courtesy]

The National Treasury has come under the spotlight over opaque budgeting and disbursement of money borrowed to fight Covid-19 effects on the economy.  

A new report from the International Budget Partnership (IBP) indicates the government spent tens of billions of shillings from loans borrowed in the 2019/2020 financial year without properly accounting for the same, raising questions on whether the funds were used for the intended purposes.

“With the haste in mobilising resources and adjusting budgets while concurrency spending/utilizing Covid-19-related resources, it is possible to have the lines of transparency and accountability blurred,” says IBP in the report.

The report analyses financial documents, including those from the National Treasury, Controller of Budget and Auditor General, and found that the government raised Sh215 billion in the first four months of the pandemic, the majority in the form of loans, to deal with Covid-19. 

In addition to this, 73 per cent of all the public debt that Kenya incurred in the 2019/2020 financial year was borrowed in the second half of the year, corresponding with the onset of the pandemic. However, IBP says this is not unique to the last financial year as more than 70 per cent of public debt in the previous three years was incurred in the second half of the year. 

“A closer look at the previous years shows that the government has overshot its borrowing target each year under review,” explains the report.

“This overshooting of borrowing against approved targets has been growing gradually across the year. Therefore, as Covid-19 forced the government to review its targets upwards, this had been a way of operating on matters debt even before the pandemic.”

The report also cites lack of comprehensive and accurate information in the financial statements provided by the government as a barrier to accountability, with the Treasury failing to publish the third supplementary programme-based budget as stipulated in the Public Management Finance Act, 2012. 

Share this story
Broke National Oil lost Sh500m in single year, risks auction
Auditor General Nancy Gathungu, in a report for the year ending June 30, declared the corporation technically insolvent.
Inside charged tender wars that edged out Kenya Power chief
Emails between board chair and a senior manager show clash of opinions over a multi-million-shilling insurance brokerage contract.
.
RECOMMENDED NEWS
Feedback