Uhuru pressured me to sign off on Sh15bn payment, budget boss says
Controller of Budget Margaret Nyakang’o.
What you need to know:
- Ms Nyakang’o said former Treasury CS Ukur Yatani pressured her to authorise payments that included Sh6 billion to cater for the exit of UK-based private equity firm Helios from Telkom Kenya
- She also revealed that the defunct Nairobi Metropolitan Service (NMS) asked for Sh2.961 billion to settle pending bills without providing the requisite invoices.
Former President Uhuru Kenyatta’s name was dragged into an investigation into questionable payments after the Controller of Budget told MPs she was pressured to authorise the release of Sh15.2 billion five days to the August 9 General Election.
Dr Margaret Nyakang’o recounted before a parliamentary committee how then National Treasury Cabinet Secretary Ukur Yatani invoked the President’s name numerous times to press her to approve the payments.
These included Sh6 billion to cater for the exit of Helios Investment Partners in Telkom Kenya and another Sh9.2 billion from the annuity fund to finance some road projects she said did not qualify to benefit from the kitty.
She was testifying before the National Assembly Public Petitions Committee that is probing claims by Consumers Federation of Kenya (Cofek) Secretary-General Stephen Mutoro that Sh55 billion was spent without parliamentary approval between July and August last year.
Dr Nyakang’o told MPs she initially refused to authorise the withdrawal of Sh6.09 billion to buy Helios Investments Partners shares in Telkom Kenya in a deal that made the company fully owned by the government.
She said Mr Yatani put her under pressure in a series of text messages — tabled and read before the committee — warning her the President expected them to close the transaction. She then gave her approval.
The Treasury withdrew Sh6.09 billion on August 5 and paid Jamhuri Holdings Ltd, a Mauritius-based subsidiary of Helios. Dr Nyakang’o said she had declined the payments because she was not furnished with the minutes of the meeting that decided on the transaction.
“I sought to see the resolution that approved this but it was not available. What I was given was the contract between Helios and the Cabinet Secretary,” Dr Nyakang’o said.
What the law says
According to the Constitution, the Controller of Budget must approve withdrawal of cash from the government’s main accounts and has powers to block access to funds on suspicion of an illegality.
Article 223 of the Constitution, however, allows Treasury to spend on emergencies without approval of Parliament but it must seek such approval within two months after withdrawal of money from the Consolidated Fund. If Parliament is in recess, Treasury must get the approval two weeks after resumption of sitting.
In one of the SMS exchanges between Mr Yatani and Ms Nyakang’o, sent on August 4, 2022 at 3:33pm, Mr Yatani wrote: “Please help us expedite this.” He followed it with another one at 3:34pm: “HE [the President] might even call you if we don’t deal with this by 4pm.”
Dr Nyakang’o replied at 3:35pm: “Are you saying we have 26 minutes to complete the process?” To which Mr Yatani replied at 3:36: “HE just called and I assured him that I have spoken to you and you promised before the end of the day.”
Mr Yatani followed with another message at 3:37pm that read: “I know he’ll call again”
Yesterday, while defending her decision to approve the payments, Dr Nyakang’o said: “I was really under pressure and threats to sign it. As you can see from the conversation that I have given you.”
“I could not predict what would have happened if I didn’t sign because I was being told HE was going to call me, due to that pressure, I signed,” Dr Nyakang’o added.
She told MPs she had thought long and hard before deciding to go public with the revelations.
“I have nowhere to go, that is the sad bit. What I have done today [comes after] a lot of soul-searching. I’m all alone, I have nobody to tell my predicaments,” Dr Nyakang’o said. “I only report to Parliament. I have no other boss yet at that time, Parliament was already dissolved. Where I should have run to is where the duress was coming from,” she added. Kuria East MP Marwa Kitayama said the conversations reveal a clear threat to the Controller of Budget in order to approve misuse of public funds.
“Clearly, this shows the Controller of Budget was threatened to sign this Sh6 billion. This needs to go out there for the public [to also know about],” Mr Kitayama said.
Unqualified projects
Dr Nyakang’o also revealed that she was threatened to authorise the release of Sh9.2 billion of the annuity fund to finance projects that do not qualify to benefit from the fund.
Among the projects were the Lamu-Ijara-Garissa road and the dualing of the Nairobi Eastern Bypass.
“This fund was [established] to cater for select infrastructure projects, which were not among those provided by the Treasury cabinet secretary,” Dr Nyakang’o told MPs.
She said when she asked for records of a resolution by the committee that selects such projects to see why they settled on them, the minutes were not provided.
Asked why it did not raise eyebrows that the withdrawal was being sought just days before the polls, Dr Nyakang’o responded that her office does not stop working during the electioneering period.
She also revealed that the defunct Nairobi Metropolitan Service (NMS) requisitioned for Sh2.961 billion to settle pending bills arising from the previous financial year but, upon scrutiny of the invoices provided, only pending bills worth Sh411.9 million were paid.
“I asked for invoices for the Sh2 billion and only invoices worth Sh411 million were provided. I’m still waiting for the invoices of the balance. The financial year is not over, maybe they will bring them,” Dr Nyakang’o said. The NMS request came from the State House Comptroller, who was the accounting officer at NMS, through the National Treasury.
Dr Nyakang’o also cast doubt on the spending of Sh27 billion on fuel subsidy on September 16, saying, it should be audited.
“This article is really being abused. There are people who have seen the loopholes in it and they are really utilising it,” Dr Nyakang’o said.
Vihiga MP Ernest Kagesi asked why the Controller of Budget didn’t find it strange that the approval was sought just days before the elections.
“These were two crucial days and anyone could have raised eyebrows because 60 per cent of these billions we are talking about happened in two days,” Mr Kagesi said.
'No control'
Dr Nyakang’o also queried Sh2.2 billion collected by the Defence ministry that was going towards the construction of the Memorial Defence Forces Hospital in August.
According to Dr Nyakang’o, the money was earned by the ministry after offering consultancy services on software. Details of the work was, however, not provided for scrutiny by her office, she said, neither was the money deposited in the Consolidated Fund as required by law.
“After asking why the money had not been surrendered in the Consolidated Fund, because I only approve money deposited there, they deposited it and brought a statement for approval,” Dr Nyakang’o said.
MPs, however, queried why the ministry would collect revenue and then demand to use the money. What was even more worrying was that, two days after the money was deposited in the Consolidated Fund, approval was sought and authority given by the Controller of Budget.
“Here, the Ministry of Defence collects revenue then follows it up in order for the money to come back to them but after the Controller of Budget refuses to approve, they go ahead to put it in the Consolidated Fund then within one or two days, the money is approved and goes back to them. Is this regular and within the law?” Mr Mbai asked.
“That was very irregular,” Dr Nyakang’o replied. She said Article 223 that allows withdrawal pending approval is being abused by the executive and needs to be reviewed by parliament. She lamented that her office does not have any control over how the money she is spent.
“Despite our approval, we don’t know how this money is spent and we only rely on the reports of the Auditor-General to see how the money was spent,” Dr Nyakang’o said.
“My responsibility of approval is not full cycled, because I’m not told how the money has been used,” she added. She told MPs that there is need for legislation in order to protect her office against threats from the executive.
At the weekend, Deputy President Rigathi Gachagua vowed to name top officials in former President Kenyatta’s government who allegedly withdrew at least Sh24 billion from Treasury in the final days of his administration.
The DP alleged the withdrawals happened between the time the electoral commission announced Dr William Ruto as president-elect on August 15 and the day he was sworn in on September 13.
Two days earlier, the Deputy President had alleged that top officials in the previous administration had taken away Sh16 billion before President Ruto was sworn in — Sh10 billion during hearing of the presidential election petition and Sh6 billion two days before the August 9 polls.
