Ruto’s Govt Hit With a Huge Scandal Over 19B Loan

The government-backed loans in Kenya, supported by the Kenya Kwanza administration, have recently come under scrutiny due to their undisclosed specifics.

The Public Debt and Privatization Committee has expressed serious concerns about the potential consequences these loans may pose to the nation.

A report submitted to the National Assembly highlights that during Ruto’s presidency, Kenya secured 19 externally financed loans with a total value of Ksh. 213.24 billion.

These loans were acquired from international creditors over the period spanning from May of the previous year to April of the current year. Shockingly, less than 11 percent of these funds have been disbursed.

The committee’s findings indicate that six loans, amounting to Ksh. 105.06 billion, were secured between May and August of the preceding year.

Furthermore, eight loans, totaling Ksh. 43.38 billion, were obtained between September and December of the same year.

The trend continued into the current year, with an additional five loans worth Ksh. 64.8 billion secured between January and April.

The concern primarily centers around the potential risk of incurring significant fines as a consequence of these undisclosed loans. The Public Debt and Privatization Committee’s warnings reflect the need for transparency and accountability in the management of the nation’s finances.

It remains to be seen how these concerns will be addressed by the government and what steps will be taken to mitigate any potential financial risks.

The committee also cautioned of a liability exposure because there was no information on loans taken on behalf of government organizations for social impact programs.

The Controller of Budget identified non-performing loans of Ksh. 218.8 billion as of June last year; it is anticipated that this sum has increased.

The Controller of Budget, who appeared before the committee, expressed concerns about certain loans that were obtained in different currencies from the one used for repayment. This led to increased loan costs, primarily due to exchange rate fluctuations.

To facilitate an audit of Kenya’s debt to ensure value for money, the committee suggested that the National Treasury should modernize the loan approval and monitoring system to enhance transparency and accountability.

Additionally, the committee recommended that the Treasury should provide the National Assembly with comprehensive information about the projects funded by the loans, the creditors, and the loan terms.

Furthermore, they proposed that loans should be directed toward projects with high financial returns to alleviate the repayment burden.

This recommendation is particularly important as most of the loans flagged by the committee are set to mature in 2027, coinciding with an election year and the repayment of older loans. This situation could lead to increased pressure on the government and a higher risk of loan defaults.