Parliament has rejected National Treasury’s withdrawal of Sh6.142 billion to fund the acquisition of Telkom from private dealer Helios Investors.

While appearing before the Budget and Appropriations Committee, the Finance and National Planning Committee argued that the transaction done last year calls for a forensic audit by the Office of the Auditor General.

The transaction was not regularised by Parliament within two months as required by article 223 of the constitution for any supplementary withdrawals requested outside the approved budget, they said.

The out-of-budget withdrawals, usually from the Consolidated Fund, are often spent on emergencies but this must later be regularised through a mini-budget.

Within 30 days

“As a result, the committee recommends that within 30 days of the House’s approval of the supplementary estimates No.1 for FY 2022/23, the Auditor General conduct a special audit on this transaction and report back to the committee,” said Molo MP Kuria Kimani chairing the finance and national planning committee.

Should the request succeed, the finance committee says the officers who oversaw this transaction could be forced to compensate the taxpayers’ money from their own pockets.

The transaction occurred under the then Treasury cabinet Secreasury Ukur Yattani and the current Controller of Budget Margaret Nyakango.

The transaction led to the payment of Sh6.142 billion to acquire a 60 per cent stake in Telkom Kenya.

The Sh6.142 billion Telkom deal was part of Sh69.45 billion supplementary funding requests made by the MDAs cumulatively between mid-August and December 2022, leaving Sh25.45 billion as unfunded requisitions as the exchequer battled cash constraints.

Telkom Kenya, the country’s third-biggest mobile operator, accounts for only a five percent share of the telco industry, with its connections falling in recent times.

The state acquisition of Telkom has seemingly rattled the current administration which has been pushing to privatize some of the State-Owned enterprises (SOEs) that are running into losses.

The parliamentary budget office estimates that Kenya could earn between Sh60 billion and Sh110 billion by selling stakes in public firms to help in debt retirement or development funding.

The operator’s mobile phone subscribers dropped from 4.23 million users in 2019 to 3.42 million in June, representing a 19.1 percent fall, in a period when its rivals, Airtel and Safaricom, gained customers.

CoB has warned that the overreliance on article 223 undermines the provision for the public participation process that is part of the budget-making process, noting that accounting officers should stick to the approved estimates..