MPs have pressed the National Treasury to account for Sh161 billion in debt repayment over three financial years starting 2020.
The development follows a report by Auditor-General Nancy Gathungu that the Treasury did not provide adequate supporting documentation on debt servicing for the 2021, 2022 and 2023 financial years.
Findings of the special audit by Ms Gathungu have prompted the Senate Finance and Budget committee to open an inquiry.
The Mandera Senator Ali Roba-led committee has now been tasked to inquire and provide a detailed explanation for the Sh161 billion payment for external debt over the three years.
The committee should state why the National Treasury failed to provide adequate supporting documentation to the Auditor-General for the payments.
Widening the net in the investigations, the committee is expected to provide a comprehensive account of Kenya's debt, how much money the country has borrowed in the last 10 years, and, if possible, have a distinction between the money borrowed locally and externally, indicating the projected repayment timelines as well as the measures put in place to mitigate any risks of default.
Raising the alarm, Kisii Senator Richard Onyonka said Ms Gathungu’s report raises pertinent concerns over budgeted corruption and waste of public resources, which poses a significant threat to the nation's economic integrity, development, and growth.
He said the committee should evaluate the prudence of government borrowing and sustainability of Kenya’s public debt in light of the reported accountability gaps, as well as the government plans to borrow an additional Sh413 billion in the year 2024 and 2025 financial years.
“We expect the committee to outline the legal and policy reforms being implemented to ensure transparency, and accountability in borrowing and debt repayment to restore public trust and safeguard our country's fiscal sustainability and fiscal growth,” said Mr Onyonka.
The latest development comes just days after the High Court gave the government 45 days to provide information on how billions raised through sovereign bonds in the past nine years to 2022 were spent.
Judge Lawrence Mugambi said the information should contain all sovereign bond agreements or contracts signed by the government and any bond that contains the terms and conditions in case of default, as set out in the agreement.
This comes after Kenya Human Rights Commission (KHRC) and Wanjiru Gikonyo moved to court stating that they wrote to the Treasury on February 7, 2022, seeking the information but the same was declined.
The lobby group maintained that the citizenry has to be informed about the affairs and conduct of the government so as to be capable of making informed decisions owing to the information obtained.
The judge said the Treasury did not give a proper justification when it refused to provide the information as sought by KHRC.
Nonetheless, the Treasury has insisted that the information was available in the budget policy statements.
But the judge said what is contained in the budget policy statements are proposals for borrowing and not records of what has actually been borrowed.
For its part, the Treasury maintained that the annual budget policy statement provides information for all the monies borrowed in each year and the same is subject to public participation.
Recent disclosures by the Treasury shows that Kenya plans to return to the international capital markets with a fresh Eurobond in 2026.
Kenya has floated multiple Eurobonds, among them a 10-year $2 billion (Sh258.5 billion at current exchange rates) sovereign bond in June 2012 and trades on the Irish stock market, which was settled in June this year.
The country’s stock of outstanding Eurobonds currently stands at Sh854.8 billion with further maturities expected in February 2031, May 2032, June 2034 and February 2048.
Kenya is expected to retire its next Eurobond in May 2027, clearing a liability of Sh116.3 million.
