The Auditor General has raised concerns over a total of Ksh170 billion that Kenya owes Germany, Japan and the United States which was omitted from the statement of obligations guaranteed by the Government of Kenya.
The anomaly was captured in the Auditor General's report auditing the National Government Ministries, Departments and Agencies (MDAs) during the Financial Year 2022/2023.
It was reported by the Office of the Auditor General (OAG) that the summary of public debt for the year ending June 30, 2023, reflected guaranteed debts totalling Ksh170 billion that were omitted from the statement of obligations.
The debt was channeled to three entities including; Kenya Airways, Kenya Ports Authority and Kenya Electricity Generating Company PLC.
For Kenya Airways the lender is Exim Bank of USA with a guaranteed debt of Ksh88 billion by the Kenyan Government.
Similarly, the Government of Kenya guaranteed a debt of Ksh79 billion for the Kenya Ports Authority which was advanced by the Government of Japan.
The last entity with an undisclosed balance was the Kenya Electricity Generating Company PLC which was lent by the German government to the tune of Ksh2 billion.
“In the circumstances, the completeness, accuracy and the status of the outstanding obligations guaranteed by the Government of Kenya as of June 30, 2023, could not be ascertained,” the OAG report indicated.
Additionally, the OAG flagged an unsupported balance of Ksh152 million guaranteed by the Government of Kenya being capital and interest owed by the Cereals and Sugar Finance Corporation.
"The balance has not been supported by any verifiable records or documents and this constitutes a limitation of scope,” it was revealed.
In defence, the government indicated to OAG that the activities of the State Corporation would be closed once the winding-up process was finalised.
“It is not clear how the guaranteed debt will be cleared without supporting documentation on the same,” the Auditor General wondered.
