Why Nyoro is accusing Ruto of gambling country's future in finance deals

Kiharu MP Ndindi Nyoro speaking during the launch of the institute's annual national shadow budget for 2025-26 financial year. [Wilberforce Okwiri, Standard] Kiharu MP Ndindi Nyoro has hit out at President William Ruto for gambling with the country's future through his administration's opaque financing approach, which has generated over Sh469 billion in one year, pegged on future taxes and levies without parliamentary approval. The former chairperson of the Budget and Appropriations Committee listed ongoing Sh44.7 billion bonds issued by Linzi Finco to fund the construction of the Talanta Sports Stadium, the borrowing of Sh175 billion through the securitisation of the fuel levy, Sh50 billion meant for intelligence, and Sh200 billion for internal security, which he stressed has not been put to good use. On Wednesday, the President admitted that the funding of the Talanta Stadium was similar to the fuel supply innovation. "This feat joins our G-G fuel supply innovation that many countries are learning from us. The first-ever asset-backed infrastructure securitisation programme has raised Sh175 billion off balance sheets, and our currency diversification strategy is gradually reducing our borrowing costs," he said. According to the President, the proceeds from the listing will directly support the stadium's construction, describing the move as a compelling example of how financial markets can accelerate national transformation. According to the Linzi Finco prospectus, bondholders will not be paid from collections from Talanta Centre but from the accounts of the Sports Fund at the Treasury. The financiers are aware of the risks in this deal because the Sports Fund, established in 2018, has a 10-year lifespan, expiring in 2028. This means it may not exist in 2040 when the bond is due to mature. The Sports, Arts and Social Development Fund ("the Fund") is a public fund established pursuant to the Public Finance Management Act (Cap. 412A) of the Laws of Kenya. As per the Public Finance Management (National Government) Regulations (Legal Notice 34 of 2015), the Fund has an initial tenor of ten years, which may be extended by the Cabinet Secretary for the National Treasury and Economic Planning, subject to parliamentary approval. Unless extended, the Fund may be wound up in 2028 while the notes remain outstanding. Payment of these notes from the National Exchequer, should the Fund's tenor not be extended, would require parliamentary approval. The prospectus expresses hope that the Fund will be extended to ensure project financing continuity. Investors in the bond are guaranteed an annual return of 15%. According to the Sports Fund's annual financial report, revenue stood at Sh13.7 billion as of June 2022, mostly from betting. However, after expenses, the fund was in a deficit of Sh245 million, raising concerns about its ability to repay debts. Nyoro, who has positioned himself as a critic of the Ruto administration over alleged fiscal mismanagement, claimed that the Sh44.7 billion construction of the controversial 60,000-seater stadium is being financed through the securitisation model. He warned the debt would rise to Sh100 billion in 15 years. Future generations "The future generation will be forced to shoulder the burden. Every child born in the next 15 years will have a loan tag for money they have no idea how it was used." He said the overstretched debt levels had forced the government to resort to "secret books of debt" to obscure the true extent of borrowing. "One secret book was the fuel levy; the second is now Talanta, under the Sports Fund. The government has borrowed Sh44.8 billion-money to be spent today but paid by Kenyans through taxes, especially from betting and gambling, over the next 15 years," he said. He added: "We are spending revenue to be raised in the next 15 years today for political gain, but Kenyans will bear the repayment burden until 2040. The interest rate is 15.04 per cent." According to Nyoro, with semi-annual payments, the government will pay Sh3.4 billion every six months, a move he described as mortgaging all government revenue streams. "Kenya will still need a sports fund for the next 15 years. Why rush to burden the country with a Sh44 billion loan that will double in cost just from interest alone? This is a reckless way to manage national finances." He claimed that officials at the National Treasury have also expressed concerns. "I urge the leadership to prioritise our country beyond the political expedience of development projects. Kenya will outlive the next election. We must avoid overheating the economy just for optics," he said. Nyoro advised the Kenya Kwanza administration to revive the economy to generate sufficient revenue for services and infrastructure, emphasising the need to distinguish between political convenience and what is right for the country. As Nyoro accused the government of fiscal recklessness in funding the stadium that is expected to host the 2027 Africa Cup of Nations, the Auditor General in May flagged financial irregularities in the stadium's construction, which broke ground in March 2023 and is set for completion by December. The audit cast doubt on the project's transparency and financial management, revealing that Sh11.5 billion of the Sh14.2 billion transferred from the Sports Fund went to various sports federations. Of the Sh1.2 billion spent on Talanta Stadium, Sh300 million was unaccounted for. Auditor General Nancy Gathungu questioned the expenditure, noting: "In the circumstances, the value for money realised from the expenditure of Sh1.22 billion could not be confirmed." The report also noted that the Sports Fund received Sh14.6 billion instead of the allocated Sh16.2 billion, creating a Sh1.4 billion shortfall. Additionally, Sh260 million was left unspent, further affecting key projects. "The underfunding and underperformance affected the planned activities and may have impacted public service delivery," the report stated. The ownership of the stadium land is also in dispute in court between Telkom Kenya, recognised as the rightful owner, and Postal Housing Cooperative Society Limited, which claims it purchased the land from Telkom's predecessor. Despite Nyoro's criticisms, President Ruto defended the funding model, saying the bond issuance was part of public finance innovation. "The proceeds from this listing will support the construction of a world-class stadium that will redefine our global reputation as a sporting powerhouse," Ruto said at the Nairobi Securities Exchange. He added that the listing reflects the deepening of Kenya's capital markets and the growing innovation in financial solutions that serve both public and private sector needs. Stadium project Beyond the stadium project, Nyoro also criticised the government-to-government fuel supply programme and asset-backed infrastructure securitisation, which he said has already raised Sh175 billion outside the traditional budget. He accused the government of illegally borrowing from the National Social Security Fund (NSSF). "We can play politics with many things, but not with workers' money. Forcing NSSF to build roads is outside its mandate. NSSF's role is to ensure optimal investment of workers' savings," Nyoro said. He claimed the government had coerced NSSF into entering public-private partnerships after private investors deemed the ventures unviable. "The government is now forcing NSSF to invest in large-scale projects so that certain individuals can profit, leaving workers with nothing. Even the IMF is concerned about our fiscal mismanagement. We are heading down the path of Zambia," Nyoro warned. He added: "We are borrowing money without recording it in government documents or seeking parliamentary approval. I warn government officials: the law will catch up with you. We are heading towards collapse." Nyoro, who once supported the administration, also criticised the National Intelligence Service for failing to prevent violent protests. "Taxpayers allocate over Sh50 billion to intelligence. If they can't prevent disruption of peaceful protests, why are we spending such amounts? Shall the government cry with its citizens when property is destroyed, while the Interior docket spends Sh200 billion? The government must take responsibility," he concluded.

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